She Means Profit

How to Get Cash Confident in Business: Essential Steps for Entrepreneurs

• Melissa Houston • Season 2 • Episode 168

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What’s the biggest obstacle preventing my business from scaling?

For many entrepreneurs like me, it’s not a lack of sales—it’s poor financial management. In this episode, I dive into one of the most critical steps in my Profit Method framework: cash confidence. As I always say, “You need to know your numbers. Without that financial clarity, it’s impossible to grow your business.” 

I start by revisiting my Profit Method framework, which is designed to help entrepreneurs at every stage of their journey. Step four—finances—comes into play after sales are rolling in, but this is where many businesses stumble. Even successful companies can go bankrupt if cash flow isn’t managed well. My mission in this episode is to arm entrepreneurs with the knowledge and confidence to manage their finances effectively. 

The highlight of this episode is my Cash Confident Framework, a system that breaks financial management down into easy, actionable steps. I emphasize how mindset plays a vital role in achieving financial success, and I also walk you through the importance of understanding your financial statements and creating a solid business financial plan. I stress that financial decisions should always be data-driven, not emotional—because, as I often say, “Numbers don’t lie. Once you start listening to the numbers, you’ll make smarter, more profitable decisions.” 

Listen to learn:‌

  • Get Cash Confident: Understanding your finances is crucial for growth. Cash flow mismanagement is a major cause of business failure.
  • Know Your Numbers: Whether it’s your balance sheet or income statement, clarity in financials allows you to make data-driven decisions.
  • Mindset Matters: A positive money mindset will help you make better financial choices and optimize profitability.
  • Create a Financial Plan: Set clear targets, monitor your progress, and ensure your business is both sustainable and scalable.
  • Cash Flow is Queen: Sales may be coming in, but without proper cash management, you could still run into trouble.
  • Track Your Expenses: Regularly track your income and expenses to stay on top of your financial health.

Links:‌ ‌  

Courses:

Work with me:

Follow me on:

IG: @melissahoustoncpa
LinkedIn: @melissahoustoncpa

Note: We use AI transcription so there may be some inaccuracies

Melissa Houston: Welcome to episode 168. Today we're diving into one of the most critical steps in your entrepreneurial journey, and that is managing your finances. So if you've been with us for the last few weeks, we've been following the new profit method framework that we are now adapting at She Means Profit. And today we're on step four, which is a big one.

And we're talking about how to get cash confident with your finances. If you tuned in last week, we covered step three, which is the O in profit. And that means outreach and outreach is marketing and sales. And we learned that you absolutely need to focus on sales, especially at the beginning of your business, so that you can create a viable business because your sales turn into cash.

So now we're at step four, where now that you've got the cash coming in, Step four is F and profit, and that stands for finances. So we're going to be covering that today. But before we jump into step four, let me quickly remind you what the profit method framework is all about. So the profit method framework is the foundation I am now using to help you be successful.

And a profitable business owner. So regardless of where you are at in your entrepreneurial journey, there is a spot in the framework where you will fit right in and you can start working to improve your business and the profitability in your business. So the steps of the profit method are the first one P is perspective, which is all about mindset and how you think about success and wealth.

Step two is the R in profit and that means reinvention. And this is where you are leaving the office, the corporate world, and going from office to entrepreneur. So if you fit in this So if you're in a business area where you're just starting out and you're defining a business that fits your skills and meets a demand, then that is where you would start off.

Now, step three is O for outreach, and that is outreach through marketing and sales. And you may be starting off at this spot where you're like, I've been in business for a while, but I am struggling with sales or I'm struggling to get my marketing down pat so I can bring in the sales. Or. I think I have a money problem, but it's actually a sales problem.

So this takes you through crafting an irresistible offer that people will pay for. Step four is finances. And that's where we're talking about today. Making sure that your business is financially solid. Step five is influence. And this is building a thought leadership legacy with your business. And the reason why I added this to the profit method is because so many of you ask me, um, how you can build your thought leadership.

So it fits right into profit under I for influence and then thrive is This is the final step, um, it's step six and it's the T in profit and it is ensuring that your personal finances are managed so that you can build your personal net worth. So T is very fitting at the end to thrive. That's your personal finances because now that you're making all this money in your business, you want to ensure that you have a strategy in place to build your personal wealth.

Thank you. Okay, step four is finances and let me tell you why this step is a game changer. When it comes to finances, it's easy to think, Oh, I'll figure that out later. I mean, when I meet with clients, a lot of them are sweeping it under the rug and watching that dust pile build up. But the reality is nothing will stall your business faster than poor money management.

I always say you need to know your numbers. And I know this is so boring and people feel a lot of resistance around this, but without knowing your numbers, you don't have that financial clarity and it's impossible to grow your business. You could be doing all the right things in your business. You could be attracting clients, selling a great product, but if your cashflow isn't managed properly, You'll find yourself stuck, stressed and unable to scale.

And there is nothing in business that does not affect your bottom line. And your bottom line is essentially, well, it's your profit and profit translates to sometimes, not always cash balance. So understanding how All these steps work together in your finances is crucial, which is why I created the Cash Confident Framework, which we're going to touch on in a minute.

So step four, which is finances, is about getting real with your business numbers. It's about understanding what money is coming in, what money is going out, and more importantly, what do we have for profit? So it's time to stop weighing it and start getting confident with your cash.

Now you may be thinking, well I've never been great with numbers, numbers aren't my thing, I've never been great with finances, but trust me, I have heard it all when it comes to the reasons why we don't want to manage our money. And that's why I created the Cash Confident Framework to make this easy for you.

I wanted to bring easy, actionable, and dare I say, empowering steps for every entrepreneur. woman entrepreneur, no matter what your background is. So what is the cash confident framework? So this is the step by step process. If you've read my book, Cash Confident, you will have seen that we covered the five step cash confident framework.

If you haven't ordered the book yet, there is a link in the show notes to order the book. I highly recommend it. It's going to give you a really solid understanding of what How your business numbers work and why it's important. And let me say that when you understand what's going on in your business in terms of numbers, you have a really solid understanding of your business.

You know how to make decisions that are going to affect profitability. You will understand each decision that you're making and make it so that you optimize the profit in your business and profit really what it means is more money in your pocket. So who doesn't want that, right? So the cash confident framework, it's a step by step process that takes you from financial overwhelm to being financially secure.

Empowered so that you can make data driven decisions, not emotional ones. And the thing is, a lot of us. And I say us because it used to be me as well. Actually, no, I lie. It wasn't really me. Scratch that out.

So it can help you make data driven decisions, not emotional ones. And the differences between data driven decisions and emotional ones is emotional is when you're going with your gut feeling, like say, for example, you've started a marketing campaign. You're like. I'm not getting enough sales, so you scrap the entire thing.

And that is an emotional decision because there's got to be steps in that campaign that are working and you just have to tweak the steps that aren't working. So when you make data driven decisions, you are looking at the data and you understand because each step in your marketing campaign breaks down, um, what you should be monitoring and that's where you get your data from.

And you'll see that there are You know, maybe your lead funnel or your, um, your lead page conversion is working, but maybe your sales page needs to tweak a bit, you know, whatever. But you'll have the data telling you where you need to make the adjustments. Numbers don't lie. So you have to start listening to the numbers to get really good at business.

And I mean that like it, it sounds, you know, very trivial, but it's absolutely true when you start looking at the data in your business, you are going to make smarter, more profitable decisions in your business and you will understand your business so much better. Okay, here's how the cash confident framework breaks down.

So the 1st step is mindset. Anything in business mindset always has to be positive. You have to be aligned with what your objective is. So ensuring that you've got a really good money mindset will help you make more money in your business because a negative mindset can actually break your business. I have seen so much damage done to businesses when the business owner is not in a good money mindset.

So focus on your money mindset. If you think that you're having issues with your money mindset, you have to start working through them. Step two is understanding your financial statements. So this step teaches you how to read your balance sheet, your income statement, and And your statement of cash flow and your income statement is likely the most used financial statement for your business.

And this is what tells you how profitable your business is. So it's really, um, it's a, it's a smart move to pay attention to what your financial statements are telling you, because. Usually the answers are in the financial statements. Any question that you have about your business, you will find that answer in the financial statement.

Step three is probably the biggest step because you are creating your business financial plan. So you are taking into consideration the pricing of your offers, um, how much you want to sell. Like you're, you're planning out the next 12 months of your business in a financial plan where you're breaking it down each month.

Okay. And you're, you're ensuring that your pricing is profitable. You're ensuring that you're meeting your breakeven points plus your net profit margin targets. You'll have a good understanding of what your sales targets are each month. You understand your expenses and if you need to cut them. And you have your net profit margin and you can decide if you want to reinvest that profit into your business or if you're at a place where you're happy.

In your business and you don't want to grow it anymore. That's when you start building your personal net worth. So. And you absolutely have to consider paying yourself first in that business financial plan. And we talk about that in the course. So your business financial plan is really the meat and potatoes of your business because it's giving you objectives that you want to work towards for the next 12 months.

You can do them for five years, 10 years, whatever, but you absolutely should plan things out for the next 12 months at the bare minimum. Now, step four. teaches you how to monitor your progress and results, because there's absolutely no point in building a business financial plan. If you're like, okay, I built it.

I'm going to fold it up. I'm going to put it in a drawer and I'm going to forget about it. No, you have to use that as a tool to monitor your progress each and every month. So. That is what step four is in the cash confident framework. And then the final step is cash management because cash is queen in a business.

You never want to run out of cash, your bank balance and your profit numbers are not going to match. And you need to ensure that you've got a cash management system that ensures that you're collecting the money when clients owe you money, that you're paying, Your bills on time that you've got a cash reserve so that if things go south, you've got, you know, about six months of business expenses that you can cover with your cash reserve.

And it talks about having lines of credits and loans and stuff set up. So you really want to be mindful of your cash confident framework for your business and ensure that you're following it. And really, it's broken down so simply that The overwhelm dissipates as you work through it because you're like, you know what?

This is actually really manageable now that I know exactly what I need to focus on And I have a system in place to do it to do it. Well, this is easy And then what happens is you? Start feeling more financially confident you feel in power and you know you you Being a business owner just becomes on a different level.

Like you're, you're so confident and you're so in charge, you'll find that you're functioning so much more efficiently and effectively as a business owner. You don't need to be a financial whiz to implement this strategy. You just need to know the tools and the mindset. So you may be wondering why is this framework so crucial for my long term success?

And the reason is, is because cash flow is the life, lifeblood of your business. So it comes, cash comes through sales and then you have to manage the outflow of your cash and ensure that you don't fall short on cash. So think about this. So think about this, without proper financial management, even a profitable business can struggle.

And the fact is, like, I have seen in my career, like, I have been a CPA for, oh my gosh, it's almost 25 years now. And I have seen seven figure businesses, Multiple seven figure businesses go bankrupt because their cash was not managed well. You can have all the sales in the world, but if you're not collecting the money on those sales, that's what kills the business.

And a whole bunch of other reasons too. But I just want to simplify the process for you and help you understand that you can make tons of sales and still go bankrupt. And 82 percent of businesses fail because of financial mismanagement.

Sorry. And 82 percent of businesses fail due to financial mismanagement. So you need to be aware of this. What the Cash Confident Framework does is it removes the guesswork for you. You will understand why you're struggling and you'll know how to fix it. And when you know your numbers, you can make strategic decisions, like when to invest in marketing, when you need to bring on another team member, or when you want to expand your business.

It also keeps you from making the same mistakes that cause most businesses to fail.

Did you know that one of the top reasons businesses don't survive is poor cash flow management? I think you did because I just told you. But with this framework, You'll have the clarity, the financial clarity to not only avoid failure, but to thrive financially. And this is really the whole mission of She Means Profit because we want to make more millionaire women in business.

So if, if that's your goal, if you want to have a seven figure income, Or multiple seven figure eight figure business. You have to understand your money. You have to understand how to manage it and look at your data. So many businesses don't talk about this because it's not the fun stuff. It's not the stuff that's, you know, people are clamoring to pay money to learn.

This is just, you know, this is for serious business owners. You want to be a serious business owner. You got to get to know your numbers. Now I know that we're just scratching the surface here, but I want you to walk away from this episode with a clear action plan. So first, start tracking your income and your expenses today.

Don't wait until you have more time or more money, because the sooner you start, The better your business will perform. The second step I want you to take away today is set up a simple cash flow plan. You don't need anything fancy, just a clear understanding of what money is coming in and what money is going out and what you have left.

And finally, don't forget to pay yourself. This is so important. You're an employee of your business and you need to Pay yourself a regular salary and you need to budget that into your business financial plan. You deserve to benefit financially from all your hard work that you're putting into the business and the cash confident framework ensures that you do so.

So if you want more detailed guidance on how to set up each of these steps, I've got you covered. You can check out the cash confident framework course where I walk you through every single step of this framework that we talked about. Okay, so there you have it. Step four of the profit method is all about mastering your finances and with the Cash Confident Framework, you can turn money from a source of stress into a tool for success.

No more fearing money. You're going to embrace your financial numbers and the data in your business so that you can grow your business profitably. Remember, when you're confident in your cash flow, you open up endless possibilities for business growth. If you loved this episode and want more resources on how to get financially empowered, be sure to subscribe to the podcast and check out my cash confident framework course.

I have left a link in the show notes. Let's get you thriving financially until next time you can get rich from nothing It just takes the right mindset the right strategy and of course being cash confident.