Drum roll please. This is the moment of reckoning. Did I make money or lose money the first three months out on the road? I answer that question during this episode. Okay, spoiler, I made $8,149.17 over that three months and that is on top of what I paid myself as a driver. Not too bad considering a lot of businesses lose money during the first year.
What to Expect From Episode 17
In this episode Craig and I go over the Profit and Loss Statement, often called the P&L, for the first three full months I was out on the road. I have to say I was pleasantly surprised. If you have never seen a P&L, it might be kind of confusing. The best way to learn and digest the info is to look at the P&L below and follow along as we talk about it during this episode (If you have a slow internet connection, it might take a bit of time for the P&L to show up).
Understanding how your business is doing financially is absolutely critical and is one of the most neglected business skills by small business owners. Just looking at your checking account is not good enough.
There are two important things I REALLY, REALLY want people to get out of this episode, and they both come down to developing the type of habits you have to have to be as successful as you can be.
It Takes Time to Build a Business
During this episode I tell the story of the Chinese Bamboo Tree made so popular by Les Brown. Much like bamboo a business needs to be nourished before it can really take off and grow. That $8,149.17 I made in profit can’t all be spent. Some of it needs to be put aside to pay taxes and some of it needs to be put aside for future expenses. We’ll actually talk a lot about that during the next episode.
The point is, you have to understand that reaching your dreams is not going to happen overnight. The money you are making today is the fertilizer and water your business needs to be healthy and grow. If you go and blow it on a bunch of chrome or buying that big pickup truck you have always dreamed of, you are going to starve your business, and it will die.
Don’t be that guy. The day will come that you will have the money to do those kinds of things, but you have to be patient.
Have a Good Accounting System
You need to understand a little about accounting. As I mention in this episode, I use Quickbooks for my accounting system. You need to understand the basics or you need to pay someone to do this piece for you. One of my companies, Trackin Assets, does this if you don’t want to do it yourself.
The big thing is you need to know how to set up your chart of accounts. There are expense accounts and income accounts. You need to know how to account for your truck and trailer and how the payments are allocated (interest vs principle), etc. Often times community colleges will have inexpensive classes that will help you learn all of this. In my area the local high school has a class that is taught at night where they provide basic, intermediate, and advanced Quickbooks classes. They are even pretty inexpensive.
Once you have that all set up and you are familiar with running the system, you will be able to easily generate the reports your accountant will need to file your taxes or you’ll need to give to a bank to get a loan for your next truck. But most importantly, you will have an accurate picture of the health of your company.