Beginning Balance

It's not a fun part of the job, but sometimes you have to let employees go. Mark discusses a recent experience, and why, in retrospect, he should have acted much sooner. Jesse shares his thoughts on when, and why, you should let go of team members, when it's clear they aren't a good fit with the organization.   Mark Butler, Virtual CFO The Money School: https://moneyschool.works https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

Mark and Jesse consider the wave of AI technology that is rapidly being deployed in a number of industries. Whether it's the dreamlike collage-art of Midjourney or ChatGPT's pedantic essays based on conversational prompts, AI seems to be on everyone's lips these days. What remains to be seen is how quickly -- and broadly -- it will impact businesses. Mark and Jesse both agree, though, that now is the time to consider how it might impact your business and how you could make use of it.   Jesse offers a simple exercise to get started -- write down (without Googling!) every way you can think of that AI could replace or perform some aspect of your business. Write each idea down on a sticky note, and as you amass a lot of sticky notes start to organize them, arrange them into categories, and see what patterns appear. At the very least, this exercise can help you start to understand better what your business is, where and how AI can help or hurt your processes.   Mark Butler, Virtual CFO The Money School: https://moneyschool.works https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

Jesse and Mark return to their credit card debate from episode #69 (recorded last year in 2022) and discuss how business is going with using a credit card. Jesse went cold turkey and stopped all use of credit cards, while Mark kept a card for just a couple recurring transactions, but greatly reduced his usage.   The consensus? Even though YNAB attempts to treat credit card spending the same as cash, because you have to set aside cash to cover the credit balance, it's NOT the same as cash. Even if you diligently set aside cash to cover your credit card expenses, until you actually pay off the card... well, the card isn't paid off! There's mental overhead in having to set aside cash for purchases as they occur, while also remembering to pay off the card. And while it may seem small, Mark and Jesse were surprised at the impact it had on their thinking and emotions around money.   Mark Butler, Virtual CFO The Money School: https://moneyschool.works https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

Mark and Jesse share their New Year's resolutions for 2023, and why their goals and plans are getting simpler as time goes by. One common goal for 2023? Mark and Jesse are recommitting to YNAB, and ditching the credit card.   Mark Butler, Virtual CFO The Money School: https://moneyschool.works https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

Mark and Jesse have discussed the advantages of being cash focused since the beginning of the show -- such as episode #3: Your Cash Is Your Strategy -- and part of being cash focused is not being focused on debt, or using debt to fund business operations. Most followers of YNAB can agree with this outlook, however credit cards fall into a grey and sticky area.   Jesse contends that credit cards actually pose a number of problems, even for people who use them "responsibly," that is, pay them off regularly and never carry a balance or pay interest. His main problem is the fact that banks push them so hard -- there must be an incentive to have people transact with credit cards rather than with debit cards or cash. Of course, banks and payment processors make money with every swipe, about 3% of the transaction value in fact. As credit cards have become ubiquitous, this transaction cost has been baked into the price of goods, too.   Jesse also cites some research that revealed spending with credit essentially provides you with a dopamine hit similar to what you get just buying things. Credit is an appeal to the lizard brain, the idea that you are getting something without giving something. Of course you are giving something, just not yet. It's the "not yet" part that short circuits our brain. And this psychology often leads us to simply spend more than we would otherwise when we use credit cards.   So, can you stop using credit cards in your own business and personal life? Mark and Jesse are going to give it a try in 2023, and see what happens...     Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

The beginning of the year brings for every business owner a familiar feeling... worry and fear about taxes. Even for those putting in an honest, good faith effort, it's not always clear that you've done things 100% correct. There's also the lingering worry that somehow, the IRS is going to show up in dark sunglasses one day and start tearing through your records.   Jesse's strategy for managing this is simple. Do your best with your taxes, then stop worrying. The only absolutely wrong move is not to file your taxes (which tax lawyer Casey Murdock stated in episodes 16 and 17). In the instances in which Mark and Jesse have been involved in IRS situations, the agents have been helpful and open to finding a quick resolution -- they are human after all.   Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

There's a lot of doom and gloom in the media these days, more than usual, that is! Inflation, recession, war... there seem to be many reasons to be negative about business outlooks in the coming year. But what are you going to do about it? Is it even helpful to think about this stuff too much?   Jesse relates a recent experience talking to a reporter about business conditions, generational finance issues, and predicting the future, which kicks off a discussion with Mark about the futility of ruminating on the negative.   Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

Mark and Jesse discuss the idea of "moats" in business, that is, the things which both give your business a competitive edge and also make it difficult to replicate. Too many budding entrepreneurs become enamored with building apps and software tools for their business, thinking that the app is the thing that makes them unique.   Software is very rarely a moat, however, or even unique. It's usually just a tool for aiding the real business, and focusing too much on the tools without executing the business plan is a recipe for failure. Mark and Jesse discuss the moats in their own businesses, and analyze some of the mistakes they've seen other entrepreneurs and business owners make.   Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

Mark and Jesse answer a listener's questions about whether Jesse knew that he was onto an idea that would positively impact so many people when he started YNAB. They also discuss what new projects -- in business and in life -- they have on the horizon for the coming years.   Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com

Mark and Jesse ponder the question: what makes (and keeps) employees happy? While Jesse doesn't like the term "happy," there are definitely some strategies to keeping employee morale high and making jobs more fulfilling. Jesse references Dan Pink's book "Drive" and his concept of AMP -- autonomy, mastery, and purpose. If a job can offer these things to an employee, chances are they are going to find fulfillment and satisfaction in their work.   Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   YNAB https://www.youneedabudget.com