Beginning Balance

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 ac...

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 th...

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...

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 usuall...

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 fi...

Mark and Jesse discuss the idea that all businesses really transact in information.  Whether the business sells goods or services, no matter the field or industry, ultimately there is information behind all products -- how to make the product, how to market and sell it, how to support it, etc. With that revelation, the concept of standardization becomes very important. Standardizing processes and...

Mark and Jesse discuss the importance of preserving institutional knowledge when employees inevitably leave and new ones join, and how that can (and should!) be baked into the normal functions of the business. As Jesse puts it, nothing in business is ever "one and done." Every process requires regular updating lest it fall prey to the law of entropy and important business knowledge gets lost.    M...

Mark and Jesse discuss a new term that is making the rounds on social media, and recently got the Wall Street Journal treatment as well. "Quiet quitting" is the so-called trend of dissatisfied and disillusioned workers exerting bare minimum effort and working as little as possible to keep their jobs, without actually quitting. The employer side to this has been dubbed "quiet firing," that is, keep...

Mark and Jesse set their sights on Rule Four as they contemplate the first principles, or the foundational ideas, behind YNAB's Four Rules. Rule Four has evolved over the years from pay today's bills with last month's money to, simply, "age your money." But the age of money, while a useful statistic, can be confusing.   When you spend money on things that you've budgeted and saved diligently for,...

Mark and Jesse ponder the philosophy behind Rule Three -- roll with the punches. At the end of the day, it's just flexibility! Jesse also takes issue with the concept of "overspending."   Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   You Need a Budget https://www.youneedabudget.com

Mark and Jesse continue their philosophical musings over the Four Rules by considering the essence or first principle of Rule Two -- Embrace Your True Expenses. Some people have taken YNAB's position to be "we don't forecast," but Rule Two is all about forecasting. The idea here is to forecast your expenses , while only allocating dollars you have right now to those expenses.   There's a great rea...

Mark and Jesse revisit YNAB's Four Rules to explore whether there's a deeper, more universal concept underlying them. It's often been said that Rule One -- give every dollar a job -- is about aligning your money with your priorities. While that is true, there's a deeper truth. Rule One is really all about  tradeoffs , or opportunity cost, in that when you give a dollar a job, it then ceases to do...

Thinking about taking the plunge and running your business on YNAB? Mark and Jesse covered the many benefits of doing so on the podcast in first episodes of Beginning Balance. Today, Mark goes deep into his onboarding process for new clients in his bookkeeping business, which uses YNAB for every client's financials.   As Mark details, if you get the onboarding process right, once you get to "maint...

Data from annual PWC-led surveys, as well as YNAB's own surveys, make it clear that employees carry their financial stress into the workplace with them. In some cases, it simply results in less-happy employees; in other cases, more requests for paycheck advances and payday loans. Either way, it's a drag on workplace morale and relationships between employees, their employer, and their family at ho...

Mark and Jesse ponder the question, "when should you retire?" While many sources float out the 4% Rule, or some variation of it, that states you can pull out four percent of the value of your retirement portfolio each year without running out of money. The debates about the validity of the rule in current market conditions, and the withdrawal rate, are endless, but as Mark and Jesse observe, the d...

Mark and Jesse field a question from listener Jose, who asked what he could do to improve the communication between his team during meetings.   Revising Prose by Robert Lanham https://www.amazon.com/Revising-Prose-5th-Richard-Lanham/dp/0321441699/ref=sr_1_1?qid=1656859182&refinements=p_27%3ARichard+Lanham&s=books&sr=1-1&text=Richard+Lanham   The Five Dysfunctions of a Team: https://www.amazon.com/...

Let's say you needed some money, and you wanted to start a business with minimal lead time and startup cost. What would you pick? Mark and Jesse discuss the scenario, and lay out a strong case for starting a service business.   Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   You Need a Budget https://www.youneedabudget.com

Businesses are concerned with profitability, and rightly so. If the business can't turn a profit, it can't stay in business very long! Calculating bottom line profitability is a fairly straightforward operation, but what about calculating the relative profitability of individual product lines or services? This is where things get complicated, and interesting!   Every product or service costs somet...

Mark and Jesse discuss the "curse of the superstar employee," that one person in your business that you can't imagine living without. The employee that does every task better than everyone else (probably faster too), with enthusiasm. While these are great people to have on your team, they can become bottlenecks for growth -- especially when they take on too many tasks, and too much minutiae in the...

Employee theft and fraud happens in the business world all the time, from theft of office supplies to slipping cash out of the register to massive multi-million dollar embezzlement schemes. Most of it happens, unfortunately, to small businesses, which often lack the sophsitication and manpower to prevent and detect fraud.   Jesse has a few easy to implement strategies for preventing most common fr...

Can you imagine it? Mark and Jesse discuss Cal Newport's book A World Without Email , which urges workers, especially knowledge workers, to rethink their work in terms of process and systems. Good processes make us more efficient, but more importantly they allow us to engage in deeper work and be more creative as a result.   Good processes and systems don't just happen, however. Typically they are...

Mark and Jesse answer a question submitted by a listener wanting to know if he could run his coffee shop books in YNAB? Jesse has recommended in the past that businesses with inventory run YNAB in parallel with their normal bookkeeping software, but he and Mark agree that a coffee shop, although it has inventory, is a great candidate for YNAB.   Question for Mark or Jesse? Email the show at askjes...

Mark shares his practice of taking quiet days, quiet weeks, and (eventually) quiet months to find clarity and focus on bigger questions and problems. Jesse explains why YNAB recently decided to implement a four day workweek, and how scarcity of time can actually drive productivity.   Mark Butler, Virtual CFO https://markbutler.com https://letsdothebooks.com   You Need a Budget https://www.youneeda...

Mark recounts a recent conversation with a client in which she wanted to create a profit sharing arrangement with an employee who had previously only worked for a standard hourly rate. The idea was that the profit sharing would incentivize this employee to do a good job, since the better the product sold the more money she would make, thereby "aligning" her compensation more closely with the compa...