Keep More Money in Your Business with Shannon Simmons
TCE Podcast ep225

Keep More Money in Your Business with Shannon Simmons

Every business owner deserves to make a living wage and to have a profitable business. What’s more, we need to let go of the idea that business ownership is a slog and that we have to work long hours to see a positive cash flow.

Yes, being a business owner is a challenge. But we left our day jobs so we could have more control over our time and our income. It’s time to take control of our money.

This week on the podcast, I’m talking with Shannon Simmons, a Profit First Professional, about developing systems for your business, why so many of us struggle with our finances, and taking a profit in your business.

Profit First has been a game-changer for me in my business, and Shannon shares how it could be for you, too.

Mentioned in This Episode Podcast

About Shannon Simmons

Shannon has been consulting with small businesses for more than 10 years. Years ago, despite working in accounting and bookkeeping, she found herself in the uncomfortable position of not being able to pay her tax bill. (She was telling clients to save for taxes and not doing the same for herself. Oops!) Shannon discovered Profit First and it changed her life and her business. Since then, She’s become a Profit First Certified Professional and over the last decade has helped hundreds of clients create profitable businesses using this time-tested system. When she’s not meeting with entrepreneurs or assessing their businesses she enjoys time with her husband and 2 children serving in their community, playing and watching sports, marveling at nature or reading a good book.

After 2 years in public accounting she saw a need to work for small business owners to teach them how to grow financially healthy businesses. She has built on her Master of Accountancy degree from Manchester University by becoming a Certified Profit First Professional and a Certified QuickBooks ProAdvisor.


Abby Herman 0:08
Hey there, and welcome to episode 225 of The Content Experiment Podcast, a podcast for service driven business owners who know that content is important, but that there’s so much more to marketing and business growth. Here we talk about showing up for your audience in a way that they want to hear and in a way that sustainable for you. This might mean publishing a weekly podcast or blog. But it also means paying attention to your email list, leveraging other people’s audiences, building relationships, and getting over the limiting mindsets that often hit when we’re reaching for the next level in our business. I’m Abby Herman, content strategist and podcast manager for business owners who want to make their marketing feel easier and more streamlined, so they can get back to serving their clients and making those sales, I will show you how, or I’ll do it for you while you do business in a way that works for you. I can help by supporting you through building a content and marketing strategy, taking care of the podcast management for you, or giving you the tools and resources to take this on yourself.

Abby Herman 1:13
Something that we haven’t really talked about yet on this podcast in the 224 episodes before, this is probably the one thing that we all think about every single day. And if we’re not thinking about it, it still matters every single day. But I’ll bet that you’re thinking about it every day. And that thing is money. It matters. It’s important. And you’re here because you want it, you’re running a business and you need money to run a business, you need to make money and you need to spend money. But it’s hard to talk about. There’s this taboo around money, whether you have a lot of money, or you’re in debt and don’t have any money at all, we’ve been taught that money is not something that we should be talking about. So we’re going to starting this week, I’m really excited to welcome this week’s guest as she shares why systems can help you reduce stress around money, and stick around because next week, I’m going to share some of my own money story to hopefully inspire some of you to create your own systems. And because everything I think that everyone needs to know, just because someone looks like they have their stuff together doesn’t mean they actually do that in two weeks, we’re going to talk about money insecurity, and how to move past that.

Abby Herman 2:37
But before we get all of this money talk started, let me share with you more about this week’s guest Shannon Simmons of for profit. Shannon has been consulting with small businesses for more than a decade and years ago. Despite working in accounting and bookkeeping, she found herself in the uncomfortable position of not being able to pay her tax bill. She was telling clients to save for taxes, and not doing the same for herself. She discovered Profit First and it completely changed her life and her business. Since then, Shannon has become a Profit First Certified Professional and over the last decade has helped hundreds of clients create profitable businesses using this time tested system. When she’s not meeting with entrepreneurs or assessing their businesses, she enjoys time with her husband and two children serving in their community playing and watching sports marveling at nature or reading a good book. So let’s dig into this conversation.

Abby Herman 3:39
Hi, Shannon, thanks so much for being here today.

Shannon Simmons 3:42
I’m excited to be here, Abby,

Abby Herman 3:44
me too. And we’re talking about something that we don’t often talk about on this podcast, but it is definitely relevant to all listeners. And that’s money. But before we do before we start, could you share with listeners what you do and who you do it for?

Shannon Simmons 4:02
Yeah, so I own a company called fit for profit, we help other businesses. Definitely service based somewhat in the wellness industry to keep more of your money that you make in your business. And we help you implement systems around your money so that it’s really pretty easy to do. And then we also do bookkeeping. Alongside that. And that is so important.

Abby Herman 4:30
I love but can you share a little bit about how you work with clients, how your business works, and how that helps you to live the lifestyle that you want?

Shannon Simmons 4:40
Yeah, so we work with businesses. We do a pretty intensive process most of the time at the very beginning because people are looking for those systems and it can be a little bit of work to get those systems in place in your business. And then we kind of drop back and to meet with our clients mostly on a quarterly basis, sometimes monthly, depending on the need of their business, where they’re at and their business changes that are happening. But you know, everybody’s business needs money, and everybody’s business has money. And every decision you make in your business affects money. And so sometimes people just need to meet every three months. And we can kind of set them up with a really good plan for the next three months. And then we come back in three months and evaluate how that was working. And sometimes people are like, Nope, I’m making changes faster than that. And I need to meet monthly. So we do it either way. But we do it all online and remotely. So I get to work from wherever I want to work from. And that is the lifestyle that I wanted. I also wanted the lifestyle where I can be home with my kids. And so I get to set my hours and meet with clients, when I want to meet with clients. But it’s also convenient for them to

Abby Herman 5:56
I love that and being able to work remote is such a bonus, and being able to set hours the way that you need it to work for your life. So I love that. So in talking about money in general, because, yeah, everybody, we need money. If we’re not making money in our business, if we’re not earning revenue for not earning profits, we have an expensive hobby. But at the same time, I think that people in general and business owners are really uncomfortable talking about money they they struggle with maybe who to talk to or what questions to ask. And you know, I think that they’re embarrassed to Why do you think that that is why is there such a stigma around talking about money, whether you have money, or you’re struggling with money?

Shannon Simmons 6:45
Yeah, it’s really interesting to me, it really doesn’t matter whether you have a lot of money or you’re struggling with money, nobody likes to talk about money, and it’s passed down. I don’t know exactly where it started. But when your parents don’t want to talk to you about money, when you’re a child, it, it just sinks into your subconscious, that that’s a topic we’re not supposed to talk about. You know what the two topics, the most taboo topics, sex and money, right? We don’t talk about them. We don’t talk about them with our parents, our grandparents did not talk about them with our parents. So it’s a learned thing, that we just don’t talk about those things. And what’s it take to change that is talking about those things, and getting Safe, Being safe talking about that finding those safe spaces, finding those judgment free zones. And that’s really what I hope we provide for our clients. There’s, listen, there’s 100 ways to do money in business. And I don’t really care which way you choose to do money, as long as it’s working for you. I’m not gonna say that you have to do it this way. And that’s one of the things I love about the Profit First system that we help people implement is, it’s so customizable, it’s so we do a lot of personalisation as we’re going through the system and implementing it. So nobody’s looks exactly like anybody else’s. And like I said, it’s a judgment free area where we can say what’s going to work for you. And then hopefully, we encourage that environment of safety. I’m learning some really cool nervous system stuff around money right now that we just need to really feel safe in our bodies when we’re thinking about money. And then we it’s a lot easier to talk about it. So I think some changes coming around that. But it really does start with some people just being willing to say, money is made up anyways, let’s talk about it. No, no, money’s made up, right? Because we printed like $4 billion in 2020. We can just make money like that. Why can’t we just talk about money?

Abby Herman 8:51
Yes, I agree so much. I think that I think that the people who do talk about money are the ones on social media saying you can make $10 million online by doing XYZ. And that just feels super sleazy. So I appreciate being able to talk about it in a way that is not sleazy, and that’s customizable, that is relevant to me as a person and as a business owner. So let’s talk a little bit about the system. So you mentioned profit first. I’ve been using Profit First and in my business for gosh, maybe six years or so. It’s been quite a while and it has completely changed the way I look at the money in my business. And even more recently, in my personal finances two has completely changed everything in my life. Talk to us a little bit about that and like what it means to build systems around money in your business.

Shannon Simmons 9:49
Yeah, so this is so timely me because I just spent the last hour talking to my team about how to implement Profit First in your personal life. So that’s really fun as a business owner Learn to be able to share money mindset with your team, which you can do, you don’t have to be in accounting, like I am to share that with your team. I think it’s really important. Again, having those money conversations in all aspects. That’s what really we did. But it’s about setting up a system because as human beings, we are wired to spend everything that we have. I don’t care if you’re talking about money, or time, or maybe not spend, but consume all the food on your plate, any resource you have, we are wired to consume it or spend it all. And so Profit First is all about putting guardrails in place, so that you stay in the lane where you’re spending and headed towards the destination, the goal that you have for your money, whether that’s profit in your business, or retirement in your personal life, or saving money, so you can pay for your kids to go to college or go on vacation, it really doesn’t matter. We need those guardrails in every aspect of our lives, because we’re the same human beings, whether we’re a business owner or talking about our personal life. And so I want your business to be able to pay you consistently. And then you will have money in your personal life to pay for all of those other things. But we have to protect it both places, or the natural human tendency is to spend it all.

Shannon Simmons 11:27
Yes. And I have been guilty of that. 100% have been guilty of that in the past. How did you come to the point where you discover Profit First and started using it because you’re a light a trained accountant. And I remember when I first brought Profit First to my accountant and bookkeeper. She was like, oh, no, that’s not going to work. Okay, good. We can’t do that. Because Because and the reason why is because the numbers don’t add up. Exactly. It’s not a it’s not a perfect accounting system. But it’s not really an accounting system. So talk a little bit about your story and how that how this came about for you.

Shannon Simmons 12:05
Yeah, so it’s absolutely not accounting, an accounting system. It’s a cash flow management system. But heavy I learned about profit first from a client, so I was the accountant. But I said yes, instead of no in your situation. And because one thing is I’m a lifelong learner. And pretty much any book that somebody says you have to read this, I will read it. And probably first is one of the most easy business books I’ve ever read in my entire life. It’s, it is scary to some people, because it’s about money. But it was not written by an accountant. It was written by a business owner. And so business owners can relate to that. But I also so I found Profit First in 2014, which was the month after it was released, I found it or was given it, gifted it. And I started my business though in 2008. And so I had been in business for about six years. And I think it was my fourth or fifth year in business. I had a tax bill that I couldn’t pay. And that really sucks to say as an accountant, because my job is to make sure that my clients can pay their taxes. And when I couldn’t do it, I was like, something is wrong here. If I can’t do it, what makes me think I’m going to be able to help my clients do it. And so I have been telling my clients for the longest time, you need to be saving 20 to 25% of everything you bring in to pay your tax bill. But I wasn’t doing it, apparently, because I’ve had that tax bill I couldn’t pay. And then I so when that happened, I opened a tax account right away and started saving a percentage, I don’t remember how much it was. And then a couple years later, is when I was gifted profit first. And I was like, Oh, there’s more to there’s more to managing money in your business than just saving for taxes. You can also say for profit and your own owners compensation. It was just a no brainer at that point. And I loved the fact that there was more to it. And it was now I had like some reinforcement that I was onto something with My Tax Account. And so I took that to all my clients. And now everybody that I work with has some aspect of profit first implemented and their business.

Abby Herman 14:20
Yeah, and my favorite part is the end of every quarter when you get to take a portion of your profit account as a profit. And I’ll talk I’m talking more about I’m going to do a solo episode next week. It’ll be Episode 226, where I talk about my own experience with Profit First, I won’t bore everybody with that right now. But it has been completely game changing. Can you share a little bit about what it looks like in your personal life to implement Profit First there?

Shannon Simmons 14:53
Yeah, it can look a whole lot of different ways. And like I said, I’m literally just coming off this conversation with my team and I think every person that we’re Free People on that call, I think every person is going to implement it a little bit differently. But the big, big kind of takeaway for me was you have to know how much income you generate in a time period. And you have to know what your basic necessity needs are. And whatever’s left over, it’s a little bit different than we do with Profit First in business, but you’re gonna, hopefully, you’re gonna have something leftover. And if you don’t, then maybe we need to look at your necessities and what are quote unquote, necessities? Because we can have a long conversation about food, necessities, especially or transportation necessities. And there’s usually ways that we can reduce those expenses. But so in personal life, I look at what is left over and then what was your What was your goal, what is the big goal for you, and how much of what’s left over do we put towards that goal? First, before we start going out to eat before we start doing vacations, and maybe vacation is your goal, and so that’s fine. But if retirement is your goal, or investing is your goal, how much of that leftover can we put towards that first, and then still have some for vacations and still have some for going out to eat and those nice to haves every day, but not spending everything on those nice to haves every day where we don’t have anything saved for retirement or the medical bill that’s going to come up that we know we need the car repair the house repair, all those things, we just want to make sure we’re covered on all of those bases before we spend everything on those nice to haves. Because it really sucks to have those things happen that you can’t pay for, because you had too many nice to have.

Abby Herman 16:43
You know, it’s so interesting. So I have mine set up so that I have a couple of different accounts that every pay day, every time I pay myself, which I have. It’s all consistent, it’s all the same day, same days every month, I automatically transfer a certain amount of money like a percentage into those different accounts once for a 50th birthday trip that I’m taking one is for my daughter’s college graduation. One is I used to transfer money to a car fund because I knew I needed a new car, I was able to buy a new car in December. And so then I’ve been able to reallocate but you know, what’s funny is that I never actually thought about my health savings account and my retirement because those are just automated to transfer without even thinking about it. Because I won’t do it if I have to think about it. But those are automatically transferred on the day after pay day, twice a month. So and I didn’t even think that those were Profit First did accounts but they are suddenly most important.

Shannon Simmons 17:51
And what I love is that you set it up automatically. You don’t have to think about it. And so you you didn’t think about it and yeah, just happening. And you probably don’t even know how much is are in those accounts. And when you go to open them, it’ll be a complete surprise. Yes, it’s surprising.

Shannon Simmons 18:10
Yeah, if I don’t automate things like retirement and the HSA, the more long term stuff, I don’t automate that. The story I tell myself is that it doesn’t matter that it’s going to take so long to accumulate the money anyway, I might as well not do it. And so I won’t do it. So I have to automate it.

Shannon Simmons 18:32
Very true. So instead, we get into a lot.

Shannon Simmons 18:35
Yeah. So what do you think? or what have you heard from clients that you work with? Are some of the biggest challenges that business owners have around money? And how can developing systems help them fix that repair their mindset, whatever needs to happen?

Shannon Simmons 18:53
Yeah, I think a lot of times, it’s the ups and downs of money in business. You know, as much as we Some businesses are built for monthly recurring revenue, and as much as any My business is, and I love that fact that it’s monthly recurring, but it still has ups and downs, we still have months, that we get a lot of clients and we’re like, oh my gosh, it’s the best month ever, and I have a great month. And then we have months where we lose clients and we’re like, dammit, I’m don’t have as much money. And so if you don’t have a system in place, as the business owner most of the time, the first expense that you change is your own pay. And so when you have a crappy month, you still have all your team pay that you need to pay and you still have all of your other expenses and you get down to the end and you’re like well, I guess I’m not taking as much this month as my pay. And I hate that for business owners because you are the I could go into 100 reasons why you should be the one to pay yours. Well, first every single time, but you’re the easiest one to stop. And so what I love about the Profit First system is the whole point is to smooth out that cash flow. So that when you have those really good months, you put money in, you put extra money into your owners compensation account. So that when you have those really crappy months, you can still pay yourself the exact same amount. And you can then do all the same things in your personal finances, even when you have a bad business month. And it just the peace of mind that that gives you the power that that gives you do make decisions in your business that you can make decisions. Right now based on the money you have in your bank account. And you know, the money is there. And it’s dedicated for whatever decision you’re making. And it doesn’t matter if you have four bad months between now and then that cash is still there, and you’ll still be able to pay all the bills that come to you in those time. And the rest of next four months is just super powerful.

Abby Herman 21:02
Yeah. So you mentioned that when you have really good months, you end up with more in your owners pay account to kind of act as a buffer for the non so Goodmans How do you know how much to put in your account? How do you know how much to save for owners pay and for all the other things?

Shannon Simmons 21:20
Yeah, that’s what we help our clients figure out at the very beginning of working with us. But we we base it off of a 12 month history. So how much have you earned generated in the last 12 months? And how much have you paid yourself and we figure that out as a percentage, not $1 amount. So that’s what I love about the software system. It’s all based on percentages. And that’s why when you have a really good month 20% of 10,000 is more than 20% of 8000. And so you put that 20% in there, and that gives you a little bit of a buffer. So it’s all based off percentages. And that’s like I said what we help people figure out at the very beginning, but it’s all based off of the historical experience of the business up to that date.

Abby Herman 22:05
Do you maybe have a tool that can help people to figure that out?

Shannon Simmons 22:09
Yeah. So is our overview. And on that overview, there is what we call an instant assessment. So it will walk you through figuring out those percentages, as well.

Abby Herman 22:25
Awesome. Yeah. And it’s super helpful, because I know that the book walks through it. But if you’re looking to implement something like Profit First right away, or you want to get a quick head start on it, that overview is a really good resource and tool. I might have looked at it once, once or twice myself. So it’s a really good tool to use to, to figure out those percentages initially. And then the book is really fun. I especially like Mike McCalla wits is the author and I really like just his tone and the book, it’s maybe a little bit snarky, which I like. Listen, yes. So I know that there’s people out there who are listening and thinking, well, but I’m really good with money already. And my business is in really good shape. Is this something that can work for them also?

Shannon Simmons 23:19
Yeah, I mean, unless you think you’ve already got everything nailed. And there’s no room for improvement in any area of your life, then probably no. But if you are ever looking to improve anything, I think, actually one of the very first clients I ever worked with was almost at what we call target allocation percentages when we first started working together. And I mean, I was new. And so I was kind of like, I don’t know what how I’m going to help him. But he needed to extra percentage points in his profit account to get to target allocation percentages. And that’s, that’s pretty easy to do. When you’re already at that point, it’s not easy for everybody. But he was able to turn around and sell a fitness business for seven figures, which very rarely happens in the fitness industry. And he will attribute all of that to having Profit First in his business. So he was all obviously already very good with money to have that situation coming into profit first. But he also knew he could be a little bit better and Profit First was the system he needed to get him to that point.

Shannon Simmons 24:22
Yeah. Oh, my gosh, that’s amazing. I love that. And into the percentages, because you mentioned that it is customizable. So the percentages that you called it target allocation percentages, that doesn’t mean that those are the percentages that everybody uses, right. I mean, maybe some businesses can set aside more profit or they’re setting aside for other things. Can you talk a little bit about that?

Shannon Simmons 24:48
Yeah, I mean, exactly that. So the basic system that in the book has five accounts, an income account, and then profit tax owner’s comp and operating expenses. Mo Most of our clients, we end up also adding like a sixth or seventh account for Team pay and opera or equipment purchases. But one of the very first things we talked about with our clients is like, what are your goals, if you are really struggling right now in your personal life to cover your personal bills, I want you to be profitable. So we’re always going to put 1% in your profit account. But we might say at 1% Your profit account for quite a while while we get your owners pay to a place where you are comfortable and making your personal payments every single month, because that’s your goal right now. And so we might get that over target, actually, and leave profit, because profit is that bonus, but you need to be able to live off of your owners compensation. So especially in a new and growing business, your owners comp might be a little bit high, while your profit is a little bit low until your revenue gets up, then we can maybe drop your owner’s pay a little bit and start to grow your profits. So all of that is conversations about where you are in your business, what your goals are, and how we can take the cumulative benefit to the owner of the percentages and divide it amongst the accounts where best works for you.

Abby Herman 26:15
Yeah, and what do you say to someone who says that? Well, I just need to earn more money in my business, I just need to increase revenue, then I can pay myself more. If I increase my revenue, then I would have enough money to hire somebody else. What do you say to someone who thinks that?

Shannon Simmons 26:35
At some point in your business, you weren’t making as much money as you are now? Right? Like we all started a business with zero revenue. So at some point, you were making less and now you’re making more? And are you paying yourself more now than you were? Then? Chances Are? No, so that increase in revenue didn’t get you to your owners pay? What what are the chances that the next increase in revenue is gonna get you to the owners pay without making some other changes? In your business?

Abby Herman 27:01
Yeah. Yes, I love it. This has been really great. And like I said, like Profit First has completely changed my business. It’s completely changed my personal finances also in such a good way, if people want to implement Profit First, or if they’re listening, and they’re thinking, Okay, I need to do this. What do you think? What are two actionable things that they should do right now, to get started?

Shannon Simmons 27:26
Honestly, I would go download that tool that we talked about, it’s really going to walk you through all the steps of implementing Profit First in your business, and go open one new bank account at your bank, that’s usually pretty easy to do. And every time you get a deposit, take 1% and move that into this new account and call that your profit account. It starts to build the habit that’s included in the overview as well. But it starts to build the habit while you’re figuring out everything on the overview. You’re gaining momentum in your bank accounts. And that’s the game changer.

Shannon Simmons 28:06
Yeah. I’m glad that you mentioned banks, because I know that when I very first started Profit First, I was using one of the one of the big, big name banks that I won’t mention because it did not go well. And they try I actually bounced around I tried a different bank. And that didn’t work. And mostly because I was being charged for every account. Do you have any recommendations on banks that are like really good for profit first users?

Shannon Simmons 28:36
Yeah, I absolutely love really bank. It’s an online bank. So it is only US based. So if you’re not in the US, I don’t have a good suggestion for you. But if you are in the US, super easy to open up a business bank account with them super easy to have, like up to 20 accounts, which I have a lot of accounts, but I don’t have plenty. And it’s just really easy to do transfers and everything else. So I highly recommend really being

Abby Herman 29:03
do they do business and profession or business and personal or

Shannon Simmons 29:08
business. But they do make it really easy to transfer from them to your personal bank accounts as well.

Shannon Simmons 29:15
And that might actually be a benefit because then the but you know you don’t feel like you want to transfer money from your business to your personal and quote unquote borrow, right? There’s no borrowing. Yes, there it gets paid back. But Awesome. Well, this has been super helpful. And I’m excited to record my solo episode about profit first and myself and how I’ve used it. But in case people want to get in touch with you where can people find you online?

Shannon Simmons 29:46
Yep. So on all the social media channels, fit for profit and then is our website.

Abby Herman 29:52
Awesome. Thank you so much, Shannon.

Shannon Simmons 29:54
Thank you Abby. It was fun.

Abby Herman 29:57
In case it wasn’t obvious, I have been a pro first convert for years and it has truly changed the way that I look at my money in business and in my personal life. I honestly think my business would not be here today if I hadn’t started using Profit First when I did. Shannon is right that humans are wired to spend or consume what we have, at least in the US or North American culture. It’s true for me, and I’m wondering if it’s true for you. Also, the resources that Shannon mentioned are in the shownotes and I highly recommend grabbing that profit first overview to help you get started.

Abby Herman 30:37
If you found value in what you learned here today, be sure to share it on social media. Take a screenshot of the episode on your phone and share it over on Instagram stories. You can tag me add to the content experiment and tag Shannon at fit4profit, or head over to LinkedIn and connect with us both. But be sure to tell us that you found us here on the podcast when you send the connection invite. The more you share this podcast with others the more we can get into the earbuds of more business owners just like you who need to hear the message that they are not alone. Until next time, take care.

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