Easy Hack For Getting Your Finances Under Control $20 At A Time

I wrote the following post in 2013 but never published it.

Six years later we are under the same precept.

Recently, we took it up farther than we ever should.

We moved our home and Windy City Parrot operations from the geographical center of Chicago to Lowell, Indiana a town of about 10,000 people surrounded by corn farms.

There’s only 5 stops light from one end of the main street (which we are on) to another.

We now have one lease instead of 2 and 4 fewer utility bills while eliminating 2 buildings to maintain.

Our State Farm vehicle insurance and business insurance dropped 50%.

Which leads me to relate one of my favorite all-time quotes, this one from Calvin Cooledge.

“Nothing in this world can take the place of persistence. 

Talent will not; nothing is more common than unsuccessful men with talent.

Genius will not; unrewarded genius is almost a proverb. 

Education will not; the world is full of educated derelicts. 

Persistence and determination alone are omnipotent. 

The slogan Press On! has solved and always will solve the problems of the human race.”

Enjoy this post that’s been in the deep freeze for 6 years.

Growing up in the 50s and 60s, a $100,000 house and a Cadillac in the driveway was a sign of “financial success.

Today the Internet has made lots of child billionaires and money has become abstract.

Can you cognize a million dollars? 

It’s conceivable that you worked 20 years making 50,000 a year.

You’ve made and spent (and hopefully saved some) $1,000,000.

Some knuckleheads on Gold Rush Alaska reality TV show in their third season mined close to $1 million in gold.

To do that they had to rent or buy lots of big earthmoving equipment and spend tens of thousand dollars in diesel fuel and leave their families for months at a time.

That was a hard-fought million.

In 2007 our little company came $13,000 short of doing $1 million. 

In 2008 I watched the talking heads and listened to our leaders. 

Then Sec. of the treasury Paulson came on TV and said “the economy is sound”.

President Bush in 2008 went on TV and said “the economy is sound”.

So with those reassurances, we moved our little company with six employees, into a 15,000 ft.² warehouse ready to take on the world. 

We had a few dollars in the bank and didn’t owe anyone money except for last week’s invoices & next week’s payroll.

Fast-forward to the fall of 2013. 

Three landlords and three web hosting platforms later brought us to the point where we are close to paying off six figures of debt we accumulated after the 2008 “our economy is sound” debacle.

We have no employees.

It’s just my Catherine and me. 

Many companies with huge revenue did not fare as well.

We are working out of a 900 ft.² storefront (using a few thousand square feet of storage on the property) and our revenue is less than half what it was in 2007.

We are finally seeing double-digit increases in revenue against last year sales.

One of the biggest challenges in running any business finding creating cash flow.

If you are a small potato Internet retailer like us, cash flow can be bipolar. thousands one day, hundreds the next with no rhyme or reason. 

Your business plan gets reduced to one sentence – “we need to use today’s cash to buy tomorrows inventory”.

To stay in business you can shrink or you can grow but you can’t sit still. 

In our case, if we shrink, one of us would have to get a job which would suck because neither one of us plays well with others. 

Plus I like sleeping with the boss. 

How do you expand your inventory while paying off debt and stay current with your fixed expenses? 

My answer to that is “micro-pay everything!”

Before I get into that, its important to note that we had to re-examine every single expense.

Remember even if you have an ”S” corp all the money that doesn’t go towards paying bills flows downhill towards you, to be taxed albeit at a lower federal tax rate.

We revaluated items from gym memberships – who needs them? 

We bought bicycles and exercise regularly at home.

Monthly janitorial service?

I’m can clean a toilet.

Direct TV – $110 a month? – Screw that, hello Roku.

And who likes to drink cheap whiskey? John Jameson, my best friend, therapist and father confessor goes for seven dollars a drink at the neighborhood bar.

I pay $.75 an ounce after Cook County taxes and still have fun with my clothes on.

Fast forward to 2018:

Now drinking Kirkland 80 proof scotch at about $20 out the door making it .34 an ounce.

Make your cuts where you can.

All those little expenses are like crappy leaky windows in an old house – they cost you a lot of money in the winter unless you fix them. 

So as a business owner you really need to evaluate – EVERYTHING. 

Our commercial property has two buildings – both heated with natural gas.

I have the gas company disconnect the gas in April because if you don’t you still pay $28 a month for the privilege of not buying any natural gas – Capiche?

LOOK AT EVERYTHING.

Now to the heart of the matter, the cash flow thing. 

About a year and a half or two years ago I had a few wake-up calls back to back to back. 

Chase Bank had changed their online banking and for some reason, auto pay stopped paying ComEd (electricity), no one sent the memo.

I get a bill for $400 otherwise they are going to disconnect electricity in the next 24 hours. 

One of our vendors had a “screw you” showdown with one of their partners because one of the problems with the partnership.

Sloppy bookkeeping leading to forget about billing us (and who knows who else?) thousands of dollars. 

Vendor, “We’re sorry, can we have our money now please?”

Me “No.”

Then there was the, oh yeah, the bill from Uncle Sam for a few thousand bucks because we didn’t pay ourselves directly and payroll taxes caught up with us.

In order to satisfy each micro catastrophe of the day, while buying tomorrows inventory and still have a couple of bucks left over for some Jameson’s I needed a plan.

I came up with what was really a non-plan. I decided to start giving everyone a little bit of money all the time.

IRS you get 100 bucks a month. 

ComEd – you get $20 a week. 

AdWords billing? Charge my AdWords credit card and I’ll pay it off $50 a day. 

Sales tax in arrears? New state of Illinois website makes it easy to pay $25 or $100 every day. 

Everyone gets paid a little bit of money – all the time. 

We have used https://www.kabbage.com/ extensively for cash advances over the past year to help expand inventory and guess what? 

Kabbage gets between $100 and $300 a day, seven days a week keeping a line of credit open.

What have the results been? 

Were probably six months away from being debt-free and at the point where I can look any vendor in the eye and say “kiss my ass I don’t own you a dime – now here’s what I’d like from you”.

Written by Mitch Rezman

Approved by Catherine Tobsing