3.16 | Basic B*sh Business Finance

Isha Vela:
Welcome to Devotional Anarchy, a podcast about intimate embodied leadership that is radically human, honest AF and thereby inherently disruptive to systems of disempowerment and disconnection. I am Isha Vela trauma psychologist certified somatic intimacy Alchemist, wealth wizard shadow doula love anarchist intuitive channel and sovereign business coach. You’re here because you know intimate self connection is the source of everything you want to create in life. And that building safety and trust in your own body is what allows you to fully own and steward your energy and your relationships. Get ready to explore attachments, sexuality, spirituality, self expression and sovereignty and other relational themes from a trauma responsive somatic energetic lens. The conversations and tools shared in this podcast are designed to offer permission to create the abundant life, love and business that lights your soul on fire.

Isha Vela:

Welcome, sovereign, welcome to another episode of The devotion to anarchy podcast. And I’m so excited to bring this particular episode to you. Because the inspiration from for this podcast came from you.

Unknown Speaker 1:23
I’ve been sitting down with a lot of folks who are budding entrepreneurs or have a job, have a regular nine to five or have some gig and are wanting to become entrepreneurs, I thinking about it. And I’ve been also having conversations with clients who are wanting to scale their businesses, or get out of the debt cycle or make better financial decisions. So this is really why I decided to just sit down and do one episode that just answers all or most of the questions and just guides a sort of best practices. And this is an episode that honestly, I feel a little bit edgy about doing because, you know, it’s a little more in the direction of concrete suggestions than any one of my other episodes.

Unknown Speaker 2:16
So keep in mind that these are suggestions and that, you know, even though I am a financial professional, some of these suggestions are going to apply to you. Some of them won’t, some of them won’t feel like the right time, some will. Right? So I I want you to really check in with yourself. First check in with your body chicken with the yeses and noes that you’re feeling inside of you. Because making any financial decision is highly nuanced and individualized. And it depends, obviously on

Unknown Speaker 2:51
you know, how much

Unknown Speaker 2:54
how much debt you’re in your living expenses, how much security and consistency you have in your cash flow. Sometimes it depends on the economy, right? There’s a lot of factors that go into making financial decisions. And the point of this, right the point of the way that I work, and the and what I want to invite you to do is to be financially educated enough so that you can weigh the pros and cons of any financial decision you make that you really take yourself through all the steps, all the thought process all the decision making processes.

Unknown Speaker 3:36
And not doing pros and cons based on what you’ve heard. But really informing yourself fully Right.

Unknown Speaker 3:47
And, you know, run things by a financial advisor, if you have one. If you want me to sit down with you, I’m happy to do that with you too. If you want me to refer you to someone, I can do that as well. I’m still offering my one on one wealth sessions, which are, you know, one part financial strategy, right, that’s individualized to you and one part money unblocking and capacitation work so that you can receive more and receive what you desired particular right.

Unknown Speaker 4:16
And there may be a group program coming down the pipeline, I’m thinking about it.

Unknown Speaker 4:21
So if you’re interested, let me know.

Unknown Speaker 4:25
And I if you’re interested in the work that I offer, visit my website, download my free five module mini course called Flex, which is all about nervous system capacitation and resilience. It’s the five pillars that I teach in everything and get on my email list so that you can find out when I do decide to drop the course. So let’s get started.

Unknown Speaker 4:49
The first thing that I you know, when you’re thinking about starting a business, when you’re even just thinking about it, the first thing that I suggest

Unknown Speaker 5:00
As people do, you know, other than obviously the business plan and just figuring out like how much income you want to make, and basically reverse engineer your way there, that’s another episode that I’ll be doing. But, you know, besides all of the concrete business planning and, and projections, right, you want to, you want to as soon as possible separate your personal and business expenses. So at the most that’s like, at the most basic level, you want to be doing that. And sometimes people ask me, Well, when When should I start doing this. And in my opinion, it can happen before you even have a single business expense.

Unknown Speaker 5:45
When I started my private practice, 12 years ago, I think it was over 12 years ago, one of the first things I did was to separate my business costs from my personal expenses.

Unknown Speaker 5:57
And in most cases, it doesn’t cost money to open up a bank account for business checking, and business savings and all that kind of stuff. But you want to have like,

Unknown Speaker 6:07
debit cards, you want to have like, checks that you can write, you know, for, if you have a brick and mortar, you want to be able to pay the rent, or you know, even the trainings that you that you invest in, right, let’s say you have some education costs, before you are able to open, let’s say, a travel agency, you want to or some real estate, something based on real estate, you want to, you know, if you have some education costs, prior to getting licensed, you want to have business expenses, like a business expense account that you can use to, you know, write, write those expenses off, right, and maybe the first year of your business, you’ll be operating at a deficit, but at least you’ll have that allocated, that that was a business expense that didn’t come out of your money, you can write that off, and then it’ll sort of count when, when it’s time to pay your taxes.

Unknown Speaker 7:08
And for business savings,

Unknown Speaker 7:11
you know, when you think about the difference, different accounts you’ll have for for your business, it might be a good idea to have a high yield savings account that you don’t touch, or you set aside a third of your income for taxes, right? Anytime you get paid, you put in a third of that amount into that high yield savings account, just for taxes.

Unknown Speaker 7:35
And you can have that growing anywhere from four to 5% each year. And that way, the money that is sitting there, you know, waiting to get taxed, right that you have allocated for, you know, tax money, it’s still growing and working for you. And when you decide to pay your taxes, right, hopefully on time, there’s going to be some money there left over that you can play with, right? If you decide to do that, or you take the money that’s left over and you invest it into something else, or you can you leave it there and let it continue growing right for the next cycle.

Unknown Speaker 8:11
And that that’s something that I did.

Unknown Speaker 8:15
I was I was advised to do that by one of the tax advisors that I saw, and thank goodness for that, because it ended up being a huge lifesaver over the long term. It gave me primarily because it you know, I Yes, I was able to pay my taxes, you know, there was always money there. And that just knowing that there was always money there gave me the sense of stability and security, when other areas of my life didn’t feel stable. So there was always money to pay the bills in that sense, right. And even though I didn’t want to take it out of there, it did help with cash flow.

Unknown Speaker 8:53
And in my idea, in my opinion, it’s also a good idea to have another business savings account where you can begin building up an emergency fund for your business. So My Tax Account was my emergency fund. That’s not an ideal situation. So you want to be able to have the tax money separate from your emergency fund separate. So

Unknown Speaker 9:16
in an ideal scenario, you would have a three to six month emergency fund for your business and for your personal expenses. So you would have two different ones. And this ensures that in case you need to step back from your business, you know, be it because of a family emergency or you an illness or some other extenuating circumstances. It could just be burnout, right? Some of us get burnt out some of us just need breaks like we can’t launch all the time, right that is not a sustainable, a sustainable system.

Unknown Speaker 9:53
In case you just need to step back and rest. You can use that money that’s in a hurry.

Unknown Speaker 10:00
I yield savings account, right, the emergency fund, you can use that to fill in any gaps in revenue.

Unknown Speaker 10:08
Which brings me to knowing when it’s good to take out business loans that are going to support cash flow. And where you can find the lowest interest rates. I see a lot of folks taking out small business loans through things like PayPal or stripe,

Unknown Speaker 10:29
you know, which in my opinion, isn’t, is not always a wise choice, partly because of the enormously high interest rates of these loans. I mean, it’s like extraordinary, it’s, it’s,

Unknown Speaker 10:44
I would say it’s extractive and really, really horrible. We’re talking like 29%, right? When you think about, this is the thing about compound interest.

Unknown Speaker 10:56
When you think about, you know, 10% return on your investments, double digit returns are really, really nice. So anything 10% And above is decent, right? Most people get like, six to eight is average. But when you think about that working against you, right? 29% interest rate working against you through your debt, that is like that is unacceptable, right? 29% growth for the credit card company or the loan means that, you know, your balance is going to be growing by a third every year making it incredibly difficult to pay off, and then you’ll be stuck in the debt cycle. Right. So what I did, and what may be an option for you, what I suggest you look into is, if cash flow is a concern for you, is to go to your local bank and see what rates there are for small business loans. There are special programs for people of color, there are special programs for women, small business owners, right. And when I first started, I did also take out a small business loan, because you know, the way that I transitioned into private practice, right, I had private practice first, I did that for several years. And then in in 2020, I transitioned into coaching. But when I started as a therapist, I took out a small business loan, because the way that I transitioned into, you know, sole proprietorship and private practice was, was really

Unknown Speaker 12:38
it was really quick. And it was like, I got sick, right, I quit my job, I couldn’t sustain my nine to five anymore. And I and I jumped into it immediately because I was sick. And I didn’t, I didn’t create a smooth transition for myself, I didn’t have the time to and my partner at the time was not employed. So cash flow was definitely a concern, it was all on me. And I knew that was gonna take some time to build up to the, you know, the 20 to 25 clients that I wanted

Unknown Speaker 13:09
a week. So I don’t remember exactly what the interest rate was on that small business loan. But I believe it was between five and 7%, which is a hell of a lot better than 29. And I think it was about I think it was in the it was either 25 or $30,000. So it was really big. It was a nice, big amount. I didn’t end up using very much of it. But the loan did save our butts. And you know, in moments again, where I needed to buy some equipment because I started to get into I started to get into somatic psychotherapy, I never use it to pay really big things just kind of like little cashflow issues. And I made it a priority to pay off. Because I don’t I don’t like having debt. I don’t.

Unknown Speaker 13:58
I’m not ashamed of having debt, but I just don’t like the feeling of it in my body.

Unknown Speaker 14:03
I just feel like somebody’s like, you know, like somebody’s trying to control me and I just don’t like that. So I think I paid it off in about a year and a half after I took it out. So not very long. And it didn’t take me long to build up a practice to where it was sustainable income wise, like I built up to those 20 to 30 people

Unknown Speaker 14:23
within the year, right within a year and a half. So that was pretty good. So next I want to talk about creating recurring revenue so that you can have some predictability in your income. So as an entrepreneur, your income can sometimes be unpredictable or inconsistent from month to month, right? That is just sort of the nature of the game.

Unknown Speaker 14:47
And a method that you’ve probably heard many times from other business coaches is to create recurring revenue. So having people on payment plans is a really it’s really nice for the people

Unknown Speaker 15:00
Paul who are right for your customers for your, for the people who are participating in your programs, and allows you to stack your different offers so that there’s a steady stream of income coming in month to month, for example, you can begin selling, let’s say,

Unknown Speaker 15:17
you sell a one on one program in a one on one offer in January. So maybe it’s a three month offer, you offer people a painful three month and a six month payment plan, right, or maybe there’s even a year long payment plan, right. So it’s like, it’s really spread out. And then let’s say you launch that in January, you have people start, let’s say, February or March. And then in, you know, in February, or maybe end of February, beginning of March, you start promoting your group program, and then people jump in in April. And then those people are on a payment plan, right. So it’s like, you’re stacking those right, and you’re launching your programs your offers, maybe you’re launching three or four times a year. And as one program finishes, or as you get one program rolling, you’re able to then promote your next write your next signature offer.

Unknown Speaker 16:12
And in some industries, right, if you’re not a coach, in some industries, there are high and low seasons, right. And as the longer you’re in your business, you’re going to start to get a feel for those high and low seasons and prepare for them, right, you’ll notice these trends, and you’ll be able to plan ahead of time with your offers so that your those low seasons don’t feel financially thin, right?

Unknown Speaker 16:36
I remember in a lot of people that say, and I’m thinking about like, when I was a therapist more, because in the coaching industry, like there are seasons, but if there’s like it’s always a good time to sell. So I felt that more as a therapist, and in the summers.

Unknown Speaker 16:54
You know, people were on vacation, the sun was out, people were less depressed, you know, so people weren’t coming in, or they took a breaks. And that is often why you see like people in the mental health field, they, you know, they take August off, let’s say, or they take some time in the summer off. So, so yeah, so you’ll notice the ebbs and flows, maybe not so much as a core coach. But in other industries, you might see this more. So the next point, that I is something that I wish I had done earlier, and now I know the value of and that is having investment buckets set up ahead of time, so you can pay yourself first. So what paying yourself first means is that when as your money comes in, right, you already have places where that money is going to get allocated, before it hits your bank account, right? before it hits your bank account for use towards your expenses. For example, like I said earlier, a portion of of what you get paid is going to go into your tax savings account. And maybe some of that goes into your emergency fund account. And then maybe you have a payment, like a recurring payment going towards cash value life insurance for your retirement, maybe a portion goes to your SEP IRA or your Roth IRA. The point is that you don’t touch that money, right, because that’s where you will be paying yourself first that is sort of your your long term financial goals, that is the money that is working for you. And that is not for spending. Right instead of having that money come and you pay your bills first and then there’s and then hope like there’s something left over. Because like this is where I really want to ground you in reality. Let’s be real.

Unknown Speaker 18:56
We live in a capitalist society. And from the moment we’re born, we are raised to be consumers, right? From all the little commercials you see on television like Oh, Barbie, and oh, this toy who that toy and bye bye bye, have have have. There’s always like when you leave your house, there’s always going to be opportunities for you to take out your credit or debit card. Maybe you’re buying something you actually need or maybe you think you need it or it’s just fun to have.

Unknown Speaker 19:29
And if the money’s there, you’re just gonna spend it right. It doesn’t mean that you don’t have self control. It doesn’t mean that you don’t have discipline. It just means like, it’s just the environment we live in and it takes extra awareness and consciousness to not engage in that behavior, right because it’s just so baked into, right the world we live in.

Unknown Speaker 19:53
So you want to set yourself up for success when it comes to spending and saving. You want to have

Unknown Speaker 20:00
those buckets set up ahead of time, so that it’s just going in there. And then the money that comes to you, for you to spend on stuff on bills on the every day on just living expenses, that is already like it’s reduced by, like, the amount of money that you have put away for yourself for the long term. And which brings me to that to the last point, right?

Unknown Speaker 20:27
Discerning when to splurge, and say yes, to yourself, versus when it’s important to say no to yourself and save. So maybe I believe this is the most important piece of what I’m going to be sharing on this episode, because it is about boundaries, setting boundaries with yourself, and setting boundaries,

Unknown Speaker 20:54
along with the financial education that’s required to make some of these decisions,

Unknown Speaker 21:01
you’re gonna need to be willing, you have to be willing to talk through the pros and cons of both big and small decisions, right, big and small financial decisions. For example, when I first started as a coach, I invested into all of these platforms I thought I needed. I, you know, I invested in active campaign platform for emails, I invested in course, platforms because I wanted to create a course, I was charged dropout, Dropbox fees,

Unknown Speaker 21:37
website on WordPress, I invested in branding photos.

Unknown Speaker 21:45
And I didn’t realize it at the time. But I did all those things. And I invested in all of those platforms, from a feeling of

Unknown Speaker 21:56
like wanting to be legitimate,

Unknown Speaker 21:59
feeling like I had to be legitimate, and that legitimacy looked a certain way looked at felt a certain way, in order for people to take me seriously as a coach, which, you know, which meant to look like other people that I admired and already followed, which is, you know, looking back a great disservice to my skills and to my training, and, frankly, to my unique and authentic vibe, right, which is not everybody’s cup of tea, but which is some people’s cup of tea. And this is really like your essence is really what it’s all about.

Unknown Speaker 22:35
So, it also drove my operating costs quite high in those first years where I was making less money, just less money than I was making as a therapist. Right. So it’s like that first year of business is like it takes time to build up

Unknown Speaker 22:51
the revenue the following the interest, right?

Unknown Speaker 22:58
So

Unknown Speaker 23:00
what else did I want to say about that?

Unknown Speaker 23:02
Yeah, so it’s like you want to be, you want to be asking yourself?

Unknown Speaker 23:08
From what place inside of me? am I investing? In a particular product? Or in coaching? Or in? Right, like, is it from a place of scarcity? Is it from a place of not feeling good enough? Is it from a place of wanting to improve myself?

Unknown Speaker 23:26
From a place of insecurity? Or does it feel like, does it feel just really, really good to have the support? Right? I wouldn’t want somebody to invest in me because they don’t feel good enough. And they feel like, Oh, my God, I need this, this is gonna, this is gonna save me, this is gonna give me all the answers, right? That’s not how you want to be investing in anything, whether it’s an email service, or another coach.

Unknown Speaker 23:51
So it drove my operating costs high. And this past year, I’ve been reducing my costs, and I invested in all in one platform that streams line streamlines all of my processes, right? And yes, it’s like, it takes a while to get accustomed to the tech part, like, oh my god, there’s all these things this thing can do, this platform can do. But, you know, at least I know, it’s all in one. It’s all there.

Unknown Speaker 24:19
And, you know, you can invest in all on one platform at the beginning. But I don’t even suggest you need to do that. I’m thinking like, keep it as simple and stupid as possible. Like, just basic, just basic. Start within a free email platform. Get a Wix website, like don’t stress about that stuff, your work, right, the quality of your work, the quality of your content is much more important than that. The quality of your presence, like how people feel in your energy when you’re holding space for them, how people feel interacting with your content, you know, interacting with your

Unknown Speaker 25:00
Your business, right? That speaks for itself. And that’s what’s gonna build your following because people are going to tell people about the experience oh my god, this was so good. This was amazing. Or I got these results. And this changed my life. Right? That’s what you want to focus on is the results you get people. And then of course there are like there’s are there are sales processes that you want to take people through, you want people to feel like, like, intimate, and that you’re taking care of them every step of the way, in the sales process in all of it.

Unknown Speaker 25:34
But yeah, so that really focus on on the the important that the human parts of your business, right? So back to knowing when to splurge. So you want to be willing to have conversations with yourself and with your partner or even with your business partner about what you’re going to be spending on and the reasons why like justifications and not the not the justifications where you’re like, Well, I really liked this, and I really wanted because bla bla bla bla, but really like, does it make sense? Does it really make sense for the long term, not just for this immediate gratification moment? But what is it? How does it impact the long term as well? Can that money be used differently? Let’s say like, example wise,

Unknown Speaker 26:21
let’s say you make $40,000 on a launch.

Unknown Speaker 26:26
You want to be deciding how much of that is decided? How much of that is divided into retirement planning? How much is going to be allocated to savings? How much do you use to celebrate and have fun, right? How much is going to be fun money? How much is going towards, you know, paying someone else? Or, you know, investing in coaching again, right? Investing in support. So those are all like, each one of those questions is sort of its own. It’s its own discussion. It’s its own exploration. Right. Does it make sense? Because that, and I think that a lot of people, like one of the patterns that I see is like, as soon as that money comes in, it’s kind of like there’s a, there’s a desire to just spend it right away. There’s like, Okay, well, it goes here, here, here, here. You can sit on it for a while to sit on those $40,000 and feel how delicious that feels in your body might have just like, Oh, I could do this with it. Or I could do that with it, like play with the possibility. That’s part of calibrating your system to that level of earnings, right? of financial wealth, right?

Unknown Speaker 27:42
So on an even more micro level, in your everyday spending, let’s say even the small decisions of where you go on vacation, what kind of hotel you stay in? What kind of experience do you want to have on that vacation?

Unknown Speaker 28:01
You know, there have been times where I’ve splurged I’ve decided to splurge because I wanted to, I wanted a particular experience, and I knew that it was gonna fulfill me on a soul level, right long term.

Unknown Speaker 28:15
Versus other times where I was like, you know, staying at a budget hotel. That was enough for me, I didn’t, you know, I will I wanted to be more economically strategic about my vacation. So that was good enough that felt like the right aligned decision for me. So an example of this is when I went to Montreal this past year, like, I wanted to just have all the experiences, and I wanted to go out to eat, I wanted to

Unknown Speaker 28:46
I wanted to say yes to what my children wanted, as long as it was like, pretty practical, because I wanted an experience where I was really getting to myself, and really surrendering to the belief that there’s money that’s replacing the money that I’m spending, right. I wanted to I was very intentional about doing that on this vacation.

Unknown Speaker 29:06
Then, when I went to Costa Rica for my 50th birthday, I got no frills flights, because I wanted to spend the money on experiences when we arrived there. Like I was like, Yeah, who really cares about the flights. It’s what happens when we get there. Like, I don’t need to be so comfortable flying. As long as when we get there. Like we have these amazing experiences, right. And that decision felt like the right decision at the time that I made it. But when I was actually on the flight,

Unknown Speaker 29:40
I realized that I either needed to be on another airline or in more comfortable seats because I normally like I enjoy flying. But this experience was really unpleasant and uncomfortable. I can pretty much fall asleep anywhere. And not a wink of sleep was to be had you

Unknown Speaker 30:00
It took a big chunk out of my enjoyment out of my travel, which can you know, travel is sometimes a pain in the butt. But this experience was like We didn’t sleep at all the kids slept a little bit, but I didn’t sleep. And then I had to drive from San Jose to

Unknown Speaker 30:18
one of the town’s one of the nearby towns that the name I’m forgetting right now, but But yeah, like that was a little scary because I had to be alert, I was driving for the first time in a different, different country. And so I needed to be alert. So that would have been, it would have been wiser for me to purchase a flight where I could really like sleep, because it was sort of at a weird hour in the morning.

Unknown Speaker 30:45
To then have like a better experience when we actually arrived like the higher quality experience when we arrived not being tired, being able to just soak in every moment that we were there.

Unknown Speaker 30:56
So that’s definitely experienced, I can I’m gonna use for the future to discern whether or not I want to spend more on the actual flight or I want to pull back a little bit on something else, right.

Unknown Speaker 31:08
Yeah, and like I said, in the times that I’ve splurged, it’s been with the intention to stretch myself into more receiving. It hasn’t been mindless spending. And there’s been consciousness behind the spending, for example.

Unknown Speaker 31:25
Right, like, like I said earlier, trusting that that more money was coming

Unknown Speaker 31:30
to replace the money that I was spending. And so for me, that was an exercise in manifestation and money energetics, right, I was really behaving based on my beliefs, and really stretching my beliefs in that way. So all I’m saying with all of this is that you have to be willing to have these conversations with yourself with your partner, if it’s, you know, personal expense with your business partner, both on the macro level, like on the investment side of things, and on the micro like on the on the little daily spending, like even thinking about like, do I need this? I don’t know, I don’t know how much Starbucks coffee costs, because I don’t drink coffee. But do I need? Do I need to spend money on this five, six, or $7 coffee? Or can I be saving $7 a day to put towards, you know, again, cash value life insurance or something else, or invest in gold and silver, like whatever it happens to be, you want to be having those conversations with yourself and I have these conversations, you your parent, you want to be having these conversations with your kids, because kids can sometimes because they don’t understand.

Unknown Speaker 32:38
You know, they don’t understand living in a capitalist system. They don’t understand what you know, cash flow, expenses, income, all of that kind of stuff. They don’t have a concept of that. And sometimes it’s just really helpful to to bring their consciousness up around like, yeah, like if we spend money on this plastic toy, how much satisfaction is that going to give you versus saving it and then getting this thing? Or, you know, like, just having them be aware of like, how money can get moved around? So I’m, I’m feeling like this. This episode definitely has a part two.

Unknown Speaker 33:18
Yeah, so stay tuned for part two of basic bitch finance. There’s just so much to cover. And so many of your questions that I want to answer. I encourage you to DM me with questions if this episode was helpful to you. Share it with a friend or post about it in your stories. Tag me I always love hearing from you. And yes, like I said, Bring more questions. I’m always excited to hear from you. All right, I’ll see you next Time.

Unknown Speaker 35:21
Thank you for listening to today’s episode. Remember to hit the subscribe button to get notified of new episodes dropping on the new and full moons of each month. And if you haven’t already, leave us a five star review on iTunes to make sure that everyone who needs this transmission receives it. Until the next episode I’m sending you fierce, fierce love