Mastering Your Business Finances: Insights from Kickstart Accounting's Danielle Hayden

Brent Peterson (00:02.178)
Welcome to this episode of Uncharted Entrepreneurship. Today I have Danielle Hayden. She is the CEO and founder of Kickstarter Accounting. Danielle, go ahead, do an introduction. Tell us your day -to -day role and one of your passions in life.

Danielle Hayden (00:15.63)
Yeah, founder and CEO of Kickstarter County, Inc. We use bookkeeping as a vehicle to help business owners understand their numbers and make better business decisions and show up to tax season prepared for taxes. I run a mission -based business. So every day I get to wake up and really make a difference in

the economy and in people's lives and people's community. But when I am not working, I have two kids and three puppies and a very, very full life.

Brent Peterson (00:57.482)
Yeah, that's awesome. Yeah. I have two grown kids and one small dog. So and a grandchild anyways. Thank you for that.

Danielle Hayden (01:06.032)
I hope no grandchildren for a while. My daughter's 19. My son's finishing up high school.

Brent Peterson (01:12.44)
Perfect. All right, so before we get started in content and we have so many interesting things and we have so many cross connections with EO and things like that, that I just want to tell you a joke and all you have to do is give me a rating one through five on the joke. So here we go. Did you know that 14 muscles are used to open a bottle of wine? So wine is basically fruit salad and exercise.

Danielle Hayden (01:27.577)
Okay.

Brent Peterson (01:40.664)
Wow, thank you. I appreciate that. I get very few fives. All right, so there you go. Perfect. All right, so I do want to, I'm extremely interested. We sold our business in 2021 and if we hadn't set ourselves up for accounting, we would have never been able to position ourselves. I mean, that's the basic thing, right? As an entrepreneur, you want to be able to

Danielle Hayden (01:42.384)
really?

You you choose to laugh in life, you know?

Danielle Hayden (02:06.703)
what it have.

Brent Peterson (02:10.86)
Hopefully pass on your business to somebody or sell it would be a lot of people's goals. And the one thing that I was surprised that the new owner didn't do was cashflow analysis and cashflow predictions. That's something that we really relied on. So I know we're talking about numbers and I'm jumped right into a subject, but I think that's something

Danielle Hayden (02:35.876)
Yeah.

Brent Peterson (02:38.39)
that I've learned that a lot of people don't actually look at.

Danielle Hayden (02:42.394)
So I'm actually not surprised to hear that. Of our hundreds of clients that we've worked with over the years, most business owners have a difficult time looking backwards. They can't even begin to think about looking forward. So bookkeeping and look at your financial statements, right? That's the act of looking backwards. And most business owners aren't comfortable with just reviewing the P &L, the balance sheet, and the cash flow statement.

If you don't even understand where your cashflow just went, it's really difficult to start to project it where it's going to go. So I think that it's almost two different skill sets of both. That's just for the business owner, but also for an accountant. You know, for us, we have two different people on our team. have our bookkeeping team and our CFO team and our CFO team helps clients.

project into the future. So our CFO team is really the people who are able to conceptualize using the numbers to look into the future of what's coming. And that's a very different skill set than a bookkeeper of somebody who's able to look into the history of the business.

Brent Peterson (04:01.026)
Yeah, I think that for us, it really came out of having a lot of receivables and then not knowing when those receivables are going to get paid. And that whole sort of playing like, are we going to have enough money to make payroll? And are we losing money? Were you making money? You know, there's such this misperception about, hey, I'm not actually profitable because I don't have any money in the bank. When your asset like maybe if you have a if you have a product based business,

Danielle Hayden (04:08.986)
Yeah.

Danielle Hayden (04:16.365)
The Cash Game.

Brent Peterson (04:29.88)
you may have a ton of assets that are in inventory and you're not taking an account for that. I think, I mean, it sounds like what you're saying is there are, there is this sort of gap for business owners to understand their most, most do understand the P and L and their, and their, their balance sheet, but that sort of gap in why am I broke? Right.

Danielle Hayden (04:52.728)
Yeah. So I was just listening to Scaling Up this morning. So I know we've all talked about being in the EO community. So Vern, who wrote the book Scaling Up, was talking about the difference between profit and cash. And I think this is where the misconception is for business owners is you can't take an owner's distribution out on profit.

So you can be really profitable on paper on the income statement, especially if you have a cruel basis for financial statements. So in your case with your receivables, you might've been showing a really strong profit, but if you have a lot of inventory, receivables, or debt on the balance sheet, you can't actually pay a single bill without the cash, right? So we need to have.

the cash from the receivables from inventory to be able to pay down our debt and to be able to take owners distributions and draws. And I think that's really where understanding how to manage the balance sheet as a business owner, it can really be an asset to you as a business owner, learning how to manage not just your P and L, so not just your profit and your loss month over month, year over year.

but learning how to manage that balance sheet by saying, I can't take on any more debt because my business doesn't have the cash to pay the debt. Or I need to purchase less inventory because my business can't, from cash perspective, can't continue to purchase inventory. I had a client recently who was going through this where she experiences a slow summer every year. So every year she goes through this cycle where quarter four,

We have a boom of sales coming in. It is the holidays. It's a boom of sales. January is slow. January, February is slow. Then we have our tax payment that comes due. Business is still steady, but the tax payment is due. Then we come to summer and summer is slow every year. But there's this moment at the end of summer where the sales have not come in, but we have to start purchasing inventory again.

Danielle Hayden (07:15.556)
before the quarter four boom. And for every business owner who experiences, maybe that's not your cycle, right? We all have a cycle as a accounting firm. We have a seasonality, a cycle as well. If you don't know how to manage the cash and the balance sheet during those seasonalities, that's where I see the most business owners not survive or not thrive throughout year over year.

Brent Peterson (07:43.18)
Yeah, it's really interesting. We had a speaker two weeks ago that talked about how your EBITDA can be affected by that exact scenario that you may have this may two businesses may have the same EBITDA or the same overall profit, but one has a cash flow problem and that that cash flow problem may not be as may not be as appealing to a buyer because you go through these cash flow spikes.

How much do you help business owners with that, like with the part about EBITDA selling, helping them understand what is a give back? What is a, what can you take in and apply to that bottom line to show some profitability?

Danielle Hayden (08:33.124)
Yeah, when we work with our clients, we are helping them with the bookkeeping and the financial analysis at the end of each month. So really helping our partnering with our clients to help them know their numbers at the end of each month, which I would argue is the most important exercise. When we think about selling our business, it starts with just knowing our numbers, learning how to manage our profit and managing our balance sheet.

managing the cash flow. So if you have a money team, and I always say every business owner needs a money team, and your money team includes a bookkeeper, tax accountant, financial advisor, so building wealth, and then a CFO or a business coach. So you really need those four team members as a business owner. And we only fill three of the four. We don't have financial advisors at our firm.

your bookkeepers recording the transactions, helping you read your financial statements, understanding your EBITDA, your financial advisor and your tax account will be helping you just manage the tax piece. That financial advisor will help you start understanding what is really a personal expense and part of your personal wealth versus your business. And your CFO is going to help you start looking to the future to be able to think about

How am I going to position my business of sell in the future?

Brent Peterson (10:04.224)
It's interesting you said a business coach and or CFO. I've never thought of it that way. So would you say that most business coaches should be sort of financial savvy financially savvy enough to help you understand that?

Danielle Hayden (10:18.064)
Well, that's why I say and or. We partner with a few communities where I do think that that business coach is very financial savvy. And so if your business coach is not financial savvy and they are not guiding you with the finances in mind, maybe their focus is marketing or their focus is sales. I'm not saying that's wrong.

Brent Peterson (10:21.506)
BOOM!

Danielle Hayden (10:44.526)
That might be the pain point that you have in your business is sales or marketing or operations, leading a team. So you might need a business coach in a very specific area. Then you'll want to make sure you also have a CFO. So you'll want a CFO who's looking at the future, setting the budget, the reforecasting, the goal setting, really looking at the financial analysis of your business.

So you might need the CFO as well as a business coach because the CFO might, the CFO, like we don't solve our client sales problem, right? So if they have, they're not getting clients or customers to land on their page and buy their products, that's not something we're to be able to help them with. We're not sales coaches, but we're going to be able to help them understand which products are not selling.

and so that they can then go look as to why. Does that make sense?

Brent Peterson (11:42.924)
Yeah, yeah. How much do you love it when somebody comes to you and they say, need your, we would like to just investigate your accounting services and we're using EOS?

Danielle Hayden (11:55.46)
Well, you need both.

Brent Peterson (11:59.064)
Does it help to already have a system in place or does it not that much affect you?

Danielle Hayden (12:03.056)
It actually doesn't affect us at all. So especially for EOS, scorecards are fantastic. I want every business owner to have a set of scorecards and KPIs that they're looking at on a regular basis. However, nothing replaces bookkeeping and nothing replaces a traditional budget.

When we work with our clients who are running on EOS, we are doing the bookkeeping, we're doing the projections, we're doing the budgeting, and then we take all of the, like we do so much work in the background, but then we're taking all of our work and landing it on the scorecard, and then the scorecard helps that management team actually make the decisions in the business.

Brent Peterson (12:52.856)
Do you help with the budgeting side of things and helping clients figure out how to set up a budget if they've never done it before?

Danielle Hayden (13:02.656)
Absolutely. So we do it for our clients. We definitely are a done with you service. So although as a business owner, you might be savvy in Excel and enjoy creating your own budget. I'm joking. Most business owners don't want to play around in Excel and don't want to set their budget. So we do it with our clients where I call it like the

ultimate goal setting process, right? Because when we talk about goals, budgeting is like the ultimate SMART goal. And so we take our clients through a set of reflection questions about, you know, I can't set a budget unless I know what I would need to take home personally, right? Like, how do I set my compensation or my owner's draws? How do I even begin to put that into a budget unless I know what I need?

So we need to, with our clients, we need to walk through what's important for me to hit personally. Where do I wanna see my business go in 10 years, three years, one year? Because then we're gonna take all of that and we're gonna build out the budget. And the other thing, traditional budgets, I think when people think about budgeting, they're like,

to cut back on my spending. You're going to tell me where I can't spend anymore. And I really think of a budget as a freedom plan. Like I have freedom to spend because I am going to set, I'm going to set the guardrails. I'm going to set the parameters and now I have permission to spend in order so I can hit my goals. So we really consider our budget style.

more goal setting and setting freedom plans for clients.

Brent Peterson (14:57.548)
I've been involved in situations where the budget is asked for from the department rather than sort of dictated to the department. And maybe you ask a department to what is your budget. And a lot of times, I think, let's just say marketing, they don't necessarily keep track of or know how much they spend. So how much should come from accounting and then how much should come back from the department you're trying to set the budget in?

Danielle Hayden (15:28.112)
I think it's a collaboration.

How do we know where we're going if we don't know where we've been? So the role of your bookkeeper and your accountant, accounting department is to supply each department or the business owner with the prior information. So to that marketing team member you were just mentioning, we need to show that marketing team member what they spent over the last 12 months. And then we need to say, well, where do we want marketing to go?

What are our sales goals and how is marketing going to support those sales goals? Now, now once we understand what the goal is for marketing, but what we need from the marketing department that and where they spent historically, then we can start to build into those, those goals. But yeah, you're right. We can't ask them in isolation. You know, if marketing doesn't know what sales plan is, and we don't know how much the owner needs to make.

or we don't know how much payroll we need to cover our business, right? It's all one big circle. Nothing happens in isolation in a business.

Brent Peterson (16:43.84)
Yeah, I think I had the pleasure or displeasure of sitting on both sides of the fence, you know, and when I went through a sale and then I did an exit, there was a number of years that I spent as an employee in the company. And I learned that it's hard to communicate often with somebody that doesn't understand what you're asking for. So coming up with some language that a marketing team would know what you're saying. If you're an owner,

trying to communicate to them in a way that they can understand, and then vice versa, trying to come back with it, I think is the hardest part in terms of how do you set a budget with the team? What else do you see as a challenge in accounting with an entrepreneur?

Danielle Hayden (17:30.288)
It's more of a mindset for a lot of business owners. They'll say to me, I'm not a numbers person. I'm not good with money. I understand why other people look at these metrics or do these things in their business, but you know, I'm too small or I don't need it. You know, it's not for me. I'm not a numbers person. Like it's more of a mindset with business owners that

You know, it's a hard truth, but nobody cares, right? Like nobody cares if you're good with money. The IRS doesn't care. Your employees, they don't care. You know, like you are hiring people in your business. You are signing vendor contract relationships. You are purchasing inventory. You are paying taxes. And when we decide to be an economic engine, we are committing ourselves to say,

I am going to take responsibility for my money. And I think that's the hardest thing that we have with business owners is to overcome that self -fulfilling prophecy of I'm not good with this. And so I'm not going to do it.

Brent Peterson (18:45.412)
How are you showing success for your clients being virtual? Are you using some tools that help that? do you think these tools have always been around and people have always just gone to their corner accountant?

Danielle Hayden (18:59.44)
Yeah. So we have been virtual before. Virtual was cool. So when I started the business almost 10 years ago, we were virtual from day one. And we would never accept a box of receipts, whether it was Joe Schmo down the street or somebody who lived 3 ,000 miles from me. I'm not going to accept a box of receipts. I'm going to teach you

the proper practices of a legitimate business owner so that you can have the capability of working with us online. We meet just how you and I are recording together. I can see your face. I can see you smiling. I meet with our clients via Zoom all day and my team meets with the clients via Zoom all day. we can, you know,

walk through financials in a very meaningful way. So it's been a long time since we felt the need to meet with somebody virtually. But we also have created new tools. So we use something called the snapshot for our clients. We send our clients this easy to read overview of their numbers at the end of each month. So rather than sending you a complicated Excel file that

that you feel frustrated navigating, we send you almost more of like an investor presentation, a management presentation that's easy to read and understand. So through technology, we're able to give business owners what I consider a higher level tool than if I was to meet with you in person.

Brent Peterson (20:44.632)
What about the need to have an accountant versus a CPA versus your bookkeeper? How do you explain how important or let's say CFO bookkeeper CPA something like that? Do you how do you explain the differences between all those different roles?

Danielle Hayden (21:04.334)
You know, it's so funny when I started the business, I had no idea how many different terms and definitions there were that people threw around. So I always say we use bookkeeping as the vehicle to do everything else. It is the foundation. Bookkeeping creates the foundation for everything else. So you have to have a bookkeeper in place who can accurately record and organize.

the business owner out making money and spending money and doing your thing, the bookkeeper keeps it all organized behind you. And then from there, we have to have a CPA tax accountant who can file the taxes. What I see happening is that business owners, because they know they have to file their taxes, they'll call their tax accountant for everything. Hey, hey, CPA, what do you think I should do about my sales problem? What do you think I should do about?

this business problem, this business problem. Well, they're not business consultants. They are CPAs. They know how to file the tax return. And they're not bookkeepers. They're tax accounts. They know how to file the tax return, right? So that's why I say we need four people on our money team. Have to have the bookkeeper or the tax account because you can't do their job. Then the tax account, only job, literally their only job is to file the tax return and to give you tax planning.

Then our financial advisor, that's the person who is planning for wealth. So planning for your retirement, planning for your exit, investing your money on your behalf. And then the CFO who is taking, again, what the bookkeeper created, the CFO takes that and helps you look to the future, creating the budgets, the forecasts, the cash plan.

Brent Peterson (22:55.256)
Why would somebody want to join EO Cleveland or EO Minnesota?

Danielle Hayden (23:03.288)
my gosh, where can I start? So I think EO Cleveland is the best. I joined EO very early on in my business and I did what we, I did accelerators first. So I did EOA and every quarter in EOA, they bring in a learning day on the topic in the book Scaling Up.

So I had referenced that book earlier in this conversation. I am still using the scaling up principles 10 years later, and they have scaled with my business. So I learned the fundamentals of how to run a business. I mean, I did this in my past life. I was a CFO before. So I was just sitting on the opposite side of the CEO, but I needed to learn.

how to run meetings and to manage cash and to understand people and accountability. so EO really taught me everything I know about business. And then there are not many places that I can go and really be understood. The challenges of an entrepreneur are very unique. The friends that I made in that group

are people who I can really call to celebrate and talk about challenges that I can't talk about with my friends. I've experienced a lot of isolation since starting my business where I can't call my friend and say, hey, guess what? I had my best month ever. Or I am terrified that this person's gonna quit. What am I gonna do without them? I'm afraid.

I'm not sure if I'm onboarding employees correctly, and we are thinking about our business, unfortunately, all the time. And so can be really lonely if you don't have those people to talk to. I know I used to try all the time where I'd call my friend or my mom and they would say, okay, well, yeah, that sounds like a real predicament that you're in.

Brent Peterson (25:20.746)
Yes.

Danielle Hayden (25:23.364)
So having EO and that community has been everything for me.

Brent Peterson (25:29.719)
Yeah, and I've met lots of EO Cleveland people at GLCs. And you guys rock. I would say that too, the benefit is that you do get, it's not just a local thing, it is a worldwide thing. And so you do meet people from all over the world and you'll learn how EO in India is different from EO in Columbia and EO in US Central.

Danielle Hayden (25:33.754)
Yeah, we do, we do.

Danielle Hayden (25:55.408)
I was just talking to somebody from Cape Cod this morning. And that's what when you hear somebody's from EO, it naturally is like, this is a good person. I want to connect. So there's oftentimes where all somebody has to say is, there's an EO member and such and such. Can you help them? Or vice versa. And there's nothing but love for each other. And how often does that happen, to your point, worldwide?

Brent Peterson (26:25.072)
Danielle, we have a few minutes left. if you were to give a shameless plug about anything you wanted to plug today, and one of the principles would be about EO is we can't sell to each other, right? But this is your chance to really sell. What would that be?

Danielle Hayden (26:36.165)
Yeah.

Danielle Hayden (26:40.108)
that it's okay to get help. You know, I think as, business owners, it's, you know, sometimes it can be, a little bit of ego to say, I don't know how to do this. And it's okay to not know how to do bookkeeping. It's okay to not know how to do tax. I went to school for a really, really long time to learn all of this. And, I feel bad for people when they say, well, I just don't understand the tax code.

I don't understand what I'm supposed to do. I don't know how to read these financial statements and I just want to give them a hug and say, of course you don't. Right. Like I went to school for so long to understand this. Of course you don't. That's not what you're meant to do. And so I just encourage everyone to ask for help. And I'm using bookkeeping and accounting as an example. Get a money team. Make sure you have all four people like you need every I don't care how small or big you are.

Everybody needs all four members of their money team on their team. Maybe that's not your pain point. Maybe it's something else. Maybe it's marketing. Maybe it's sales. But get help. That's been my biggest thing over the last few years. I am totally comfortable to say I don't know how to do everything and this is who I'm going to bring into my business to help me.

Brent Peterson (27:59.02)
Yeah, that's like an unclosing one thing that I appreciate is that you have a chance to be vulnerable and you don't, you can sound like a fool to somebody who thinks, who may know everything, right? Because you don't know something and the space you get in EO, especially in your forum, is that chance you get to ask those questions without being judged. I think that's the best way to put it.

Danielle Hayden (28:24.312)
Yeah. Yeah. And find a money scene that you can do the same thing with. So the only other place that I have that is my forum and my money team where I can say, Hey guys, I don't understand this. need, I need, I need an experience share. you know, I need to be heard because a lot of times we just need to be heard. and, having a team or a forum to say, I just need a space to be heard right now.

Brent Peterson (28:54.04)
Perfect. Daniel Hayden, it's been such a great conversation. Thank you so much for being here.

Danielle Hayden (28:58.512)
Thank you for having me.

Brent Peterson (29:04.289)
Alright?

Danielle Hayden (29:06.456)
Awesome. Covered a lot. Yeah. Yeah. Yeah. Awesome. Well, if there's anything I can continue to do to be a resource for you and your community, mean, definitely share this when this goes live. We'll share it away. Cool. If you're ever in Cleveland, let me know. I know we...

Danielle Hayden (29:35.93)
Well, let me know.

Danielle Hayden (29:40.269)
That has like the fourth time that conference has come up recently. So I'm have to make sure I check that out. I need to get on a waiting list somewhere.

Danielle Hayden (29:51.844)
Okay.

Yeah.

Danielle Hayden (30:05.56)
Yeah, yeah, yeah, yeah. All right, I'll definitely check that out. Well, when you're here, let me know. And if I'm ever in your neck of the woods, I will definitely look you up. Okay. All right. Thanks. Bye -bye.