The Mosaic Life

Building a Solid Financial Foundation for Success

• Laura Wagenknecht • Season 3 • Episode 32

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Curious about how to transform your business's financial operations from chaos to clarity? Join us as Teresa Wilcox of Mountain Laurel Accounting Solutions shares her inspiring journey from her early days at her father's John Deere dealership to becoming a successful business owner. Teresa reveals how the world of numbers tells unique stories for each business, offering insights that empower owners to make informed decisions. She emphasizes the importance of financial clarity, especially in tourist-driven areas, to help entrepreneurs thrive throughout the year.

Struggling with the financial side of your business despite being an expert in your field? Teresa offers her perspective on overcoming common challenges faced by business owners, from understanding profit margins to managing overhead costs. She provides guidance on establishing a solid financial structure and effectively using accounting software to track progress. With her tailored support and educational approach, Teresa helps entrepreneurs confidently navigate their financial landscape, ensuring they understand the crucial elements of costs, break-even points, and taxes. Tune in for valuable strategies to enhance your business's financial health and strategic planning.

A Mosaic is a bunch of pieces, put together, to make up the whole in a beautiful way. Here at Mosaic Business Consulting we discuss the various pieces of a business throughout the course of its life, and throughout all industries, and how these pieces, when put together, can help develop a better, more efficient, and effective running of YOUR business.
Find our more or register for a course today: Mosaic Business Consulting

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Speaker 1:

Good morning. I'm your host, laura Boggenknecht, owner of Mosaic Business Consulting, and you're listening to the Mosaic Life. Mosaic is a bunch of pieces that, when put together, make up that whole in a really beautiful way, and this show plans to discuss the various pieces of a business throughout different industries and how these pieces, when put together, can help develop a better, more efficient and effective running of your business. So to reach me, contact bizradious. Today, my guest is none other than Teresa Wilcox, and maybe the name doesn't sound too familiar, but you'll get to know her. She's fantastic.

Speaker 1:

In addition to being the owner of Mountain Laurel Accounting Solutions, based in Mars Hill, north Carolina, teresa also provides coaching to Mountain BizWorks clients, and Teresa has more than 25 years of experience as an accounting manager and controller, and this means that she is well aware of the bookkeeping and financial analysis required to help the businesses she works with. She has been helping businesses to start effectively and worked with established businesses to develop systems and approaches to their bookkeeping to ensure a seamless and smooth process. I really want to welcome you to the show, teresa. It is so good to have you on the show right now. I'm so grateful for your time. Thank you so much Thank you for having me, laura. Oh, it's great, and you know I am kind of curious because accounting sounds so boring and my father was, so I get it, but I'm curious why go into accounting?

Speaker 2:

What promoted you to or what made you decide to go into accounting in the first place? Well, growing up, my father had a John Deere dealership, and so during the summer we worked in the office with him and did filing and inventory and build customers, and so learning business techniques and running a business from my father. You know, then, as I got graduated school and and got involved, I took some accounting classes and decided that bookkeeping was what I wanted to do. So so that's how I started, yeah, getting into the bookkeeping. And then it just went from there and, and what's attractive to you about this bookkeeping?

Speaker 1:

And then it just went from there. And and what's attractive to you about this bookkeeping? I'm curious, like the ledgers. Are those the excitement for you making sure that there's not one penny off? Or what's the deal? You know it will drive me crazy. Oh, I totally get it, totally.

Speaker 2:

Yeah, yeah, but no, it's just rewarding to see all the numbers reconcile and when you, you know, run numbers and sometimes people have very complex financials and to get everything to reconcile and that's it's the art of accounting.

Speaker 1:

Yeah, oh, it's an art right? Yeah, so I am, and and so you went into it because of your dad. But now you've been doing it for 25 years. Did you ever get bored with that? I mean, what? What kept you motivated doing financial analysis? Yeah, I mean, it's like a torture.

Speaker 2:

But do tell. Well, every business is different and unique and unique. And so when I worked, I worked for a business for 20 years and they grew and expanded, and to see that and be a part of that, and then also, you know, in past jobs since then, you know every business is different and so that's unique to me and it gets me excited, you know. So you know, maybe a retail or maybe service or you know, just a different business and it has a whole different structure. So, yeah, it's, everything is unique and different and it's not the same even though we're looking at the same numbers and the same reports. It's all different. And as long as it's all put together correctly and efficiently, then, yeah, the numbers work and I can tell you how to effectively run your business and make business decisions based on those numbers.

Speaker 1:

Yeah, so what you're telling me is that these numbers tell a story about the business performance Right and its management or administration Okay. Brand it's management or administration okay. And so you're telling me that if the business owner is making poor decisions in one arena, it doesn't mean that the business is failing. It might mean that this arena or this area needs to be fixed. And what does that look like? Correct? And I'm an example of that.

Speaker 2:

Yeah, yep.

Speaker 2:

So if the data is accurate and is, if we can gain financial clarity through the numbers, that is tremendous for a business owner, because then they can make decisions based on the numbers.

Speaker 2:

If they are working with you, for instance, on a business plan, and they want to grow their business by 20 percent over the next two years, well, if you know your business cycles and you know your numbers, then you can plan for the next two years and do projections and see where you want to be, as well as also compared to past history, also compared to past history, and so that you can see, ok, well, usually I'm busy March through September and then it drops off during the holidays, and so if I'm going to grow my business, I know, you know, march through September, I am going to have to do ABC in order to accomplish that.

Speaker 2:

So, yeah, and it helps business owners to know whether they need to hire more employees or know if they have different facets of the business where they need to focus on. Maybe this division of the business is not as profitable as the other, or maybe this division of the business is successful six months out of the year, but then you need to have another part of that, another facet of that business, to offset the other six months.

Speaker 1:

Yeah, and I like how you talked about the cycle, the business cycle, because there are so many businesses, especially in this tourist area, where the tourism allows for growth of a business during the tourist season, if you will, and that can pretty much run from, you know, April through the end of November, and at the same time you also then have the holidays, right. But then that means January, February, March and part of April. Usually they don't have any business or limited business, and so you're talking about a cycle where they would earn nothing but they have to take those earnings they've got from the other nine months and move that forward to sustain them Exactly.

Speaker 2:

Exactly, yeah, plan it, do some planning and projections. Yeah, yeah, and a lot of people too. They want to buy inventory and you know. But then you have to plan that you wouldn't want to buy a lot of inventory right before your tourist season is going out and now you've got three months, four months worth of inventory sitting there. That, yeah, is not producing sales.

Speaker 2:

So yeah, yeah, it's true, it's a tool and if, if people can see it as a tool, the financials, the cash flows, the projections are all tools for them to effectively run their business. And then, my apologies, keep going. That's all right, and so I want them. I want them to be able to see that and accurately knowing that the books are always up to date. You know, each month you can see your performance and and and and gain that clarity and and, like I said, be able to make financial decisions for your business based on those numbers.

Speaker 1:

I really like that. And so they get a dashboard of some kind that tells them information, and boy, that's helpful, because it's one thing to have your numbers. It's another to interpret those numbers and what they mean, and that's where I hear you saying you come in to do that. I'm also curious, and and so I'd like to talk about that, the interpretation of numbers, but that sort of piggybacks off. A question I have about what do you think it is that people are so afraid of? You know I'm sure you've seen this a lot of solopreneurs, a lot of newer entrepreneurs, are terrified, or feeling less than smart, if you will, about the numbers and how to use those numbers to build their business. So what would you, what do you do in that circumstance? To work with somebody who's afraid of the numbers or I'm never, I wasn't good at math, you know and use that and then show them how to interpret. How do you work with all that?

Speaker 2:

Exactly so. A lot of business owners. They want to run their business and if I'm a baker I can make all the cookies and the cakes and everything. But when it comes time to sit down and do the checkbook, they are stressed.

Speaker 1:

And they're just like. I don't you know I do it all in my head.

Speaker 2:

I know that I've got payroll next week and I, you know, as long as I have X amount of dollars, I'm okay, and but they don't. It just physically stresses them, and and so they just keep pushing it aside, pushing it aside.

Speaker 1:

And one day.

Speaker 2:

I'm going to do it. And then it that day comes and it has to be done, and then it's overwhelming because, you know, I think the big stressor for business owners is number one, the time that's involved, and number two just not understanding it. And so you know, just even setting up a report over the chart of accounts and setting up the correct income and expense accounts so that they can know if they're profitable, and understanding you know how assets and liabilities affect the profits, and you know just being making strategic planning for your business. But I work with them. Part of what I do with Mountain Biz as a financial coach is teaching them, and so I try to set everything up. I listen and learn their business, because I want to understand their business and how it operates so that then I can say, ok, this is the structure, the financial structure you need for your business, and then I can set them up in the accounting software, create their charter accounts and show them. Create their charter accounts and show them.

Speaker 2:

Some business owners want to be involved. They're like teach me, I want to know. You know how this, you know how this works and what you're doing. And others are like just do it and send me the reports at the end of the month and, you know, just talk to me once every quarter and tell me if I'm doing good or not.

Speaker 2:

So, but the ones that do want to be involved and want to understand, genuinely want to understand and know that if they increase sales, or if they are able to buy that product from someone else and save 20 cents per item, you know what that reflects in profit when they sell it and so the return on investment. But, yeah, yeah, so that's, I try to educate them as well and and so that they can understand the numbers. But, yeah, using using those tools. If I'm a baker, I want them to understand their break-even points and their profit margins. And you know, know that if I, if it costs me five dollars to make this batch of cookies, what do I need to sell them for? And then you know, are they good for the next five days or do you know, is it something I got to make every day or so? Knowing that and what your costs are, so that you can do a return on investment and work the numbers.

Speaker 1:

And what you're talking about now, I think, is where some of the people get confused with the terminology, because when you're talking about the cost, you're talking about what the owner, business owner pays for those items that either assist them in making the item. Or is the cost of the good itself that they're going to resell right Correct? The cost of the good itself that they're going to resell right correct? So it's the cost versus price, versus charge, or yes, and so the price is what the person's going to pay, and then the expense is what you pay in fixed or variable costs.

Speaker 2:

well, yeah, there's well. There's two kinds yep, there's two kinds of costs fixed or variable, and it depends on your business yeah, it does depend on your business.

Speaker 1:

That's why I was just, I just caught myself, I was like oh no, no wait. And then the other part of that is the taxes too, and you have income taxes and you have sales taxes and you have, you know, futa and SUTA and workers' comp and you know Payroll taxes.

Speaker 2:

Right.

Speaker 1:

Yeah, items are. That might help our audience understand that kind of terminology. That helps us then determine that break-even point that you're talking about, which means basically, how many units do you need to sell of whatever it is you're selling before you break even and then can make a profit beyond that right? That's what we're talking about, frankie.

Speaker 2:

You're exactly right, yes. So yeah, I think it's very important for a business owner to know their overhead cost so that they know that I've got to at least. My overhead cost is 10% and I need to at least have 10% on anything I sell. So if I pay $5 for something, I need to have a 10% markup on it, just to cover overhead. And then also knowing some of the hidden costs, so taxes and some of the shelf life costs is that product gonna sit there for two months before I maybe sell it or is it something that's going to be a quick turnover? And and so also knowing your, your industry and your products. To know you know if I have these 10 products or these 10 services that I offer. Two of these are always steady. I'm always going to do these, but these other items aren't.

Speaker 2:

So knowing knowing your inventory products, your services, knowing your overhead cost and then working the numbers backwards so that you can then realize, ok, if I buy, if I want to make this and I have to buy, I don't know chocolate and I can get chocolate from these three suppliers. You're making me hungry. Yeah, I'm talking about cookies to buy. I don't know chocolate and I can get chocolate from these three suppliers you're making me hungry.

Speaker 2:

Yeah, I'm talking about cookies. I don't know. I'm talking I know you shouldn't be doing that but yeah, talking about the different places you can buy chocolate. And then do I buy it in bulk, versus, you know, going to the store and just buying five chocolate bars, you know, and just knowing, knowing your products and and and your cost. And then there's the variable cost and the fixed costs that are involved and the costs that you can control and the things that you can't control. So, yeah, yeah, that I don't know if that answers your question, but hopefully that helps them to kind of understand.

Speaker 1:

Yeah, well, in particular, you them to kind of understand. Yeah, in particular, you're talking about fixed and variable costs. I think that's where people get a little confused and feel like, oh, it's overwhelming all this terminology, but the truth is, is a fixed cost would be something like your rent, that is the same rent every month, that's a fixed cost and a variable cost might be.

Speaker 1:

if you have a food truck or you have a restaurant, perishable goods are variable in what you pay for them, because one month tomatoes cost this much, next month they might cost you this much because they're either a not in season and need to be transported farther. So you're paying for transportation costs in addition to that Not that you personally are, but the company, that's the vendor that's giving them to you, might be paying that and they're going to pass that cost on to you and then you're exactly right to the customer.

Speaker 2:

Yeah, yeah, okay, you're exactly right. Tariffs or anything like that. Yes, yeah, you have no control over.

Speaker 1:

Yeah, exactly it is what it. Yes, yeah, you're. You have no control over. Yeah, exactly it is what it is. Yeah, it's like lumber. One minute was fine.

Speaker 2:

Exactly, and then?

Speaker 1:

the next minute we it was through the roof. I mean, it was literally insane 10 times the cost. Yeah, yeah, it's crazy. Yeah, so the home builders and contractors that were building homes, can you imagine? They gave an estimate and they go oh well, that one's scrapped. Yeah, exactly, yeah, exactly, well, so, so to that end, let you know, right now we're in. You know, western North Carolina has been through a little bit of a humdinger of a thing known as Hurricane Helene, and we don't have a whole lot of time, a couple of minutes at most. But just curious in the short time we have, one, how has it impacted your business, if it has? And then two, what do you know that we could do differently as businesses to prepare for something like that? I know that's a big loaded question, so if you can't answer in two minutes, I get it.

Speaker 2:

Well, I think one thing is is that I have had minimal impact from it. When COVID hit, I think it was a shift for a lot of businesses and they realized everybody's working remote, and I think it was a big shift because people realized, hey, the bookkeeper can be remote with all the online banking and QuickBooks online. You know, everything can be remote. Most accounting softwares now are online and you know, with direct deposits, you don't have to cut checks anymore, and, and so I think business owners are realizing that there is a shift and the bookkeeper doesn't need her own office and overhead, and, and so I think that has a lot of business owners are more confident in that and more trusting. And you, you know, they still want to know that I'm involved and talk to me and see me, but yet they realize that that does not have to be in the office environment. And so the businesses that have been impacted.

Speaker 2:

It's awful, it is such a tragedy to see businesses that have been established for, you know, 15 plus years that are now gone, and, and it's it's tragedy. But you know, I think right now there's a lot Well, I say a lot. It's a shift as well for the businesses. They just need to regroup, figure things out, and I know, you know, I can't imagine what's. You know what's going through their heads. You know, here everything is gone. Um, so what is rebuilding looking like and and adapting? We all just have to adapt to the new way, because it's not like tomorrow everything's going to be back to normal. This is going to take years.

Speaker 2:

So, adapting to what a new Asheville or new Hot Springs is going to look like. And funding. There's some funding options and grants. I think they're working on some grants. Obviously, if you can get grants, that's the number one way to go, rather than borrowing money. But if you have to borrow money, you know in the short term.

Speaker 1:

But you know your Well. Mountain Biz Works has loans. The Small Business Administration has loans. Yeah, you know there are some avenues. Western Women's Business Center, which has the Carolina Small Business Development Fund, has loans. So there's a variety of mechanisms, I think, in place.

Speaker 2:

And I think a lot of the chambers also offer financing.

Speaker 1:

Yeah, yes, the chambers is offering a Buncombe, one Fund or something to help people. So let me ask you this If people want to find out about your business and how they can reach you, if they need your services, how can they contact you?

Speaker 2:

Sure, so my website is mountainlauralsolutionscom or mountainlauralaccountingcom, I'm sorry. My email is mountainlauralsolutionsatoutlookcom and my phone number is 828-450-9780. I have a Facebook page, but I'm located in Mars Hill and you know. I know we're coming towards the end of the year, so everybody's thinking about their finances, need to do some tax strategies for their business and prepare for any year. Now's the time to do it. So, yeah, I think yeah, it's a great time to get started on your bookkeeping.

Speaker 1:

Yeah it is definitely Fourth quarter time to get it together. Yeah Well, thank you very much, teresa. This is so informative and helpful, I think, for so many people, so I really appreciate all your time and your expertise. It was wonderful.

Speaker 2:

Oh, thank you. Thank you, laura, it's been great and I'm glad to be a part of your podcast.

Speaker 1:

Yeah, oh yeah absolutely Well and I want to thank you, the audience, for listening to the mosaic life. You can listen to this episode again and get great content, or get get additional great content and by other hosts by going to bizradious and click on shows. Thanks so much for listening. Have a great rest of your day.