The next transcript features a breakdown with Clay Clark, US Small Business Administration Entrepreneur of the Year, Business Coach and Caleb Taylor on Thrive15.com, the most affordable Ohio business college that will define the need for a business ledger.
The next transcript features a breakdown with Clay Clark, US Small Business Administration Entrepreneur of the Year, Business Coach and Caleb Taylor on Thrive15.com, the most affordable Ohio business college that will define the need for a business ledger.Caleb: All right, Clay.
Clay: Hi from a business coach.
Caleb: Welcome.
Clay: Take it from a business coach, you keep your distance.
Caleb: Real quick question here. Before we start, what superpower suit are you wearing under your current suit?
Clay: David Robinson, #7, U.S. Olympic Dream Team, number 2. There was actually a number 3.
Caleb: So if you don’t know what we’re talking about, underneath all of his suits, Clay always wears some kind of athletic jersey. Today it’s David Robinson.
Clay: D Rob, admiral. What’s up!
Caleb: That provides a lot of his energy and his super power. Can you please channel that for us right now, as we define ledger?
Clay: Ledger?
Caleb: Yeah ledger? Let’s define that, because you need to know what this means as an entrepreneur for your business. A ledger is a physical collection of financial information, such as revenues, expenditures, accounts receivable, and accounts payable. Ledgers used to be kept in books preprinted with lined ledger paper, which explains why a business’ financial info is often referred to as the books. Hey Clay!
Clay: Yep.
Caleb: Channel that passion, that energy, that focus of superpower here. But now these are commonly kept on computer files that can be printed out. It’s done differently now. So Clay, I know you were really enraptured with my definition here. As you listening to it, what did that mean to you?
Clay: I’ll tell you. I’m being serious; I’ll be awfully focused. John D. Rockefeller, one of the worlds most successful people.
Caleb: Yeah. I’ve heard of him.
Clay: He recorded almost everything. People who know him claim that he recorded every expenditure he made his entire life in a book.
Caleb: Wow.
Clay: World’s wealthiest man, by today’s standards, he would be so wealthy today that he could be buying companies like Google twice.
Caleb: Wow.
Clay: This business coach thinks it’s unbelievable. Every expenditure, what he did is he wanted to make sure if he bought something, that he deducted it and knew how much was left. Now let’s talk for a second. If you’re watching this, you have probably a debit card.
Caleb: Yeah.
Clay: As a business coach I am assuming you have a credit card.
Caleb: Probably.
Clay: You probably have some sort of payment device.
Caleb: Yes.
Clay: And you probably routinely spend money, without thinking about how that affects your net worth. But everyday, John Rockefeller said, “I am going to be worth more today than yesterday.”
Caleb: And he documented all of that?
Clay: Every single expense. Here’s what’s crazy. I know personally probably 4 or 5 dozen millionaires. Most of them are just as fastidious, just as detailed, just as focused about knowing every dollar, where it goes. If you’re watching this, and you have a bank card, credit card and all these expenses going everywhere, you need to get it together. You need to know how much money is coming in your account out of your account on a daily basis.
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Caleb: That’s what a ledger is.
Clay: A ledger is that. There’s websites; there’s a wonderful website right now called mint.com.
Caleb: Mint.com
Clay: Mint.com offers you a powerful tool that you can use to keep a virtual ledger, or–and I’m not kidding I prefer–I personally keep a physical book.
Caleb: Yeah, I’ve seen it.
Clay: I just write it down. I do it, because I want to know where each account is at. It freaks me out not to know. I’m telling you, I see people all that time that say, “I’m going to do it digitally.” That’s great that you talk in that voice that you want to do it digitally. I’m not against digital. I’m not against doing it in paper, but you have to have a ledger, which is defined as, again, we’re keeping track of our revenues and our expenditures.
Caleb: Right.
Clay: Our accounts receivable and our accounts payable. We have to keep track of it somewhere. If you do that, you’ll be successful. Just last month, I knew that I about $8,500 owed to me from 1 person. I had about $202,000 owed to me from these things over here. I knew how much was in the bank. I knew exactly all my revenue. I knew all my expenditures. I knew how much money was coming in. I knew how much money I owed.
Caleb: Help me understand this. If this isn’t something I’m good at. If this isn’t my calling; this isn’t something I enjoy. Is there another option for me here?
Clay: This message is not brought to you by Bookkeepers of America, but it is super important that every thriver watching this … I say thriver, if you’re not content with just surviving, you need to hire a bookkeeper. You need to; that’s like expense number 1. When you start your business, you need to go out, get incorporated and hire a bookkeeper, from the very beginning.
Caleb: If nothing else, it keeps you accountable, by making sure have you written this down; do you know much is coming out of here and going into there.
Clay: For thrive, we have people who have invested $200, $100,000 dollars in this business. They want to know, where’s the money being spent. I can tell them: this is where it’s gone.
Caleb: Good.
Clay: What’s neat about it, is it tells a story. The thing about the bookkeeping and a ledger that’s exciting … In a good movie, there’s a character and there’s a plot and you get to see the development. In a good business, you can see the money come in, the money comes out. The ledger tells the story. It tells how you’re managing your money, what you value. It tells you. You can look at and go: “uh oh, I value a lot of alcoholic beverages.” You’ll realize that oh no, I’m spending a lot there, or “uh oh, I like lottery tickets” or “uh oh I keep buying ads that don’t work” or whatever. The thing is you have to have a ledger to keep track of this stuff.
A lot of entrepreneurs are using the bank card. If you’re watching this right now, and you have a bank card, I would challenge you to ask, how often do you look at that statement? A lot of people don’t. It’s sad to see a 45-year-old man pay me as a consultant and it overdrafts his card.
Caleb: Right.
Clay: To see her overdraft her card. It is sad to see it over and over and over again. Why do they do it? Because they’re not keeping a ledger.
Caleb: Keep the ledger. You can see the story, and see where that money’s going. You’ve got to keep track of it.
Clay: As a business coach I want you to know you need to keep the ledger, Heath Ledger.
Caleb: Umm. Thank you so much. You’re a great pale American.