1843 – The Power of Understanding Business Finances with Spencer Sheinin

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2:14With us right now, Spencer, Shane, and Spencer, you are the founder and CEO of Shift Financial Insights. Your website is shiftfinancial.co. So thank you so much for joining us, Spencer. Thanks so much. I really appreciate you having me, Josh. Yeah, absolutely. By the way, I should also point out you're a TEDx speaker, and then you are also the author of the book, Entrepreneur. It's Entrepreneurs. Entrepreneurs, you got it. The Surprisingly Simple Path to Financial Clarity. Well, Spencer, I'll let you kind of maybe share just a bit about kind of your impact in the world and what should financial is, who you work with, and the impact you create.

2:53Awesome. I love that question. It's one of my favorites. And and kind of, you know, if you go to the Simon Sinek, why start with why kind of concept is I believe entrepreneurs can change the world. And our role is to help them through their financial blind spot. And, you know, so many and I've been an entrepreneur for nearly 30 years now. I've been I've been involved with lots of entrepreneurs over the years. And what I notice is a lot of us will get stuck and we may have something, you know, like, sure, we all want to make money. I love making money. There's no no judgment about against making money here.

3:23At the same time, there's almost always an underlying intention on a on an impact, whether it's in a community level, whether it's the environment, whether it's kids, whether it's pets, whether it's it doesn't matter what it is to me, as long as it's ethical. I want to really help support those entrepreneurs who have a purpose, have a higher purpose in mind, want to have an impact, break through those stuck spots, because so many entrepreneurs I know, I'd love to do something for this cause. But if I don't make payroll, that doesn't matter. I'd love to do something for this cause, but unless this order gets out, it doesn't matter.

3:53And so we end up in this stuck point, not being able to actually fulfill our dreams and have the impact that's really motive, the underlying driver and motivator. Money's great, but it's not really the core motivator for most entrepreneurs when you peel the layers back. So that's kind of our why. That's why, you know, we help entrepreneurs pass their financial blind spot. Yeah. So, you know, obviously I think we're talking about stuff that involves a lot of like kind of this deep who we are, mission, purpose, values, our emotions, you know, like, can you share maybe just a bit more about the, you know, this idea of, you know, most entrepreneurs, like there's lifestyle things involved.

4:33There's these softer kind of non-number type, like we want the security, right? So we want security or we want freedom. Like there's the thing that money gives us. Please share more about kind of that dynamic here, what's going on in our brains. So I was talking to one of our clients and they're in the home. We typically have just context. We have two main client bases. One is home services, HVAC, plumbing, electric. The other is professional services. So a lot of digital agencies, that type of thing, consultancies, that kind of idea. And so the person I was talking to was in the home services space and had an HVAC company.

5:08I said, well, what do you want to do? What's your goal? And he's like, well, well, I want to have five different services in five cities. I'm like, why? Well, because then we'll be more efficient. Why? Why? And I didn't stop asking him. I think I annoyed him after long. But then he said, well, I want a bison farm. I'm like, OK, tell me about that. And he goes, you know, I've been reading a lot about agriculture and about how we do commercial farming and how detrimental it is, not just for the soil, but for humans. And like, there's all this stuff. And then I've sort of been following bison farming and it's actually a way to do regenerative agriculture.

5:39And so I kind of want to do that to be a model for the farms around the one I want to buy. Then I want to put a leadership center on there so I can bring the leadership teams to understand the concept of regenerative for business, not just for the land. And oh, by the way, I also want to have like a youth center there for kids at risk so they can come there, work on the land and do this. And I'm like, okay, well, why don't we help you do that? Like, how do you think you will feel showing up to work and dealing with these problems when you know this is the purpose you're doing? What do you think your employees are going to think?

6:10Some of them are going to think you're nuts, and that's cool. Maybe they're not the right fit for you, but there's going to be some people that are super connected to saying, hey, I want to help at-risk children get in touch with regenerative systems so that they can actually help themselves. So it was a complete reframe around, I want five services in five cities to make X dollars, to I want to actually use regenerative thinking to inspire leaders. Yeah. Okay. That's, I don't know about you, but I'd rather work there. You know, and it's that, you know, and the critical nature of purpose, like what we do in the world matters, right?

6:50I remember, I think it was Stephen Covey way back in the day had that example of like, you know, let's say you had a job where you made really great money and you spent your whole day typing up this report and you would spend all day doing it at the end of the day, right before you leave, manager come in, grab the report, throw it out the window, say, see you tomorrow. And then that was your day-to-day existence. Even if the money is good, the vast majority of us would not be able to keep doing that for very long. We have to feel like what we do matters. Yeah. Totally, totally on board. And yes, of course, there's the foundation.

7:27We need enough money to live. And maybe you do that for a while to make enough money to live. I get that. I get the hierarchy of needs. Like that's all still true, but in our essence, in our core. And I mean, how many studies have we all read where salary only means something up to a point? And yes, people should be rewarded generously for what they do. I believe in that too. So yeah, that's, again, this is, that's what I get excited about. You can almost probably sense it, but, you know, anytime I have those conversations with people that are really wanting to be a change maker and have a positive impact, it just transforms everything that's happening around that space.

7:59Yeah. Okay. So why are you talking about this? You're involved in accounting here, which is the numbers. Yeah. I mean, great question. One, I'll talk about that report example you use, like back when I started doing my CPA, which was, I started my CPA, I think in literally 30 years ago today. and I used to drive to work nauseous. I was physically ill going into work because I really struggled with, I was basically doing reports that they weren't getting thrown out the window, but not much more than that was happening with them. And so if people who knew me back then knew I had an accounting practice today, they'd probably fall off their chair.

8:41But what it was is kind of between being an accountant, but I've also been an entrepreneur. And I think I said 30 years over earlier, I think it was 25, to be fair. And I've had businesses in construction, manufacturing, cold storage, I've had bricks and mortar businesses. And I really felt the pain of the difference between accounting and being an entrepreneur. As an accountant, I thought I understood entrepreneurship, but it wasn't until I had my ass handed to me a bunch of times that I got that it was so different. And as an entrepreneur, if you don't have the accounting, it's a different language, right?

9:11And I was actually at a talk one time by a finance guy in a room of entrepreneurs who was going so fast. I'm pretty good at math. And I'm like, okay, got it. Okay, got it. And at one point I put up my hand. I said, don't you mean 2.4? I can't remember what it was. And he's like, oh yeah, you're right. And everybody laughed because he was speaking above all the entrepreneurs' heads. And here I was correcting them. And a guy at the table next to me said, hey, I know this is important. I don't understand it. Can you help me? And that was like the first light bulb moment in a series of light bulb moments that I say, I can take my 20, 25 years of entrepreneurial experience, apply it to this technical problem we have with accounting and entrepreneurs and accountants not speaking the same language.

9:51And I can do that. And then through that journey, it's like I can do that in particular for entrepreneurs that want to make a difference, that want to have an impact. We can actually change the world. So if I can help 50, 100, 200, 1 ,000 entrepreneurs to get through their stuck point so that they can change the world, that gets me pretty excited. That's why I made that transition. Yeah. So Spencer, maybe you could share just a bit about your book, because I'd love for you to kind of talk about that. Again, it's called Entrepreneurs, The Surprisingly Simple Path to Financial Clarity. Who should be reading this book?

10:28Yeah, so I really, a lot of the work that we do, it's focused on entrepreneurs who are feeling stuck, frustrated, even embarrassed about the state of their books, and they don't know what to do about it. And so I think about life in terms of two ways. One, hygiene. You got to get the basics right. It sucks. It's boring. Nobody, I mean, a lot of accountants like accounting, but most entrepreneurs don't like dealing with the hygiene. That's the you got to get it right stuff. My book, it's not like accounting 101. It's here are the things that need to be in place in order for the hygiene to be good.

10:57And it helps the entrepreneur who's struggling with that, at least to get a sense of what needs to be done right. But it's really the insights. And this is where I, you know, if I'm a bit different maybe than some accountants, I think I'm quite different than a lot of accountants. But in this case, it's really around the insights. And when I say insights, I'm talking about and, you know, like if I were to ask you a question, like, what are the three biggest financial issues facing your business today and how much is it costing your business? When I ask that question, a lot of entrepreneurs are like, well, I think it might be this.

11:26It's like, no, we're overstaffed and it's costing us$120 ,000 a year. We miss sales budget and it's costing us$82 ,000 a year. If entrepreneurs understand the key issue facing the business, they're usually really good at fixing it. The problem with their books is they have a hard time understanding what's the key issue facing the business. And so the book really goes through this process of understanding how you can look, not only just look at the books. It's not, here's how to read financials. I think that's the biggest problem that accountants do. Here's I'm going to teach you to read financials.

11:56No, what needs to change is the accountants have to come to the entrepreneurs with the way this is how or sorry, the entrepreneurs need to direct their accountants to say, bring me this information in this format. So it's easy for me to understand this is my business and I'm going to be the one driving change out in the world. So it's way less about here's how to do it and more about a paradigm shift in terms of how you're actually going to use the numbers and direct your accounting team. So to anybody that's feeling stuck, embarrassed about what's going on, it doesn't really know how to do it.

12:32Yeah. I think, again, you hit on a good point here, this idea about sensitivity, right? And there's a lot of things. I think it's not just, and I don't think that you're talking, Spencer, just about the fact that the books are a mess. I mean, that could be one thing. It could be the state of their cash flow, right? Which actually is kind of funny. For someone who subscribes and listens to these episodes on the regular, this has come up a couple of times over the past few weeks, which is great because again, I think this is the, you know, kind of like almost like that taboo type of thing you're not supposed to talk about.

13:09Listen, man, cash flow issues happen to are really great, successful business leaders, you're not alone. It happens. And so that's obviously, so it's not, so it could be, yes, their books are a mess. You know, they're just, you know, they're not keeping up. That could be one thing. I feel like that's resolvable. That's, but it's maybe some of these emotional baggage that we have around some of these aspects that I'm wondering if you're also referring to. It's both, but on the hygiene being resolvable, I agree. The challenge being that as an entrepreneur, you know, the way I describe it, because we do a lot of home services, be like somebody handing me a set of plans.

13:49You know, I was building a house or doing a rental. Somebody hands me plans. I'm like, well, here's the front door. Here's the stairs. I think this is the bedroom. Right. It's a thing of I don't know what to ask. I don't even know what to ask. So on the hygiene side, when that's wrong, it's often a function of the entrepreneur not knowing what the standard is and not knowing what to ask, not being able to call BS because they don't have the tech alone understanding. So that's kind of that piece. The second piece, which you're talking about, the emotional, the frustration, I don't like doing it, it's boring, all this other stuff.

14:18That's to me that insights piece that I was talking about, which is how do I, in like five minutes or less, understand the key issues facing the business, why they're happening and what to do about them. Because as entrepreneurs, if we're armed with that right information, to your cash flow issue. Cash flow is usually a function of not being given the information in a way that's going to lead the entrepreneur to understand simply, intuitively, and quickly there's a problem coming up. Because if you know you've got a cash flow problem six months from now, very few entrepreneurs can't solve that.

14:51We are great at solving problems. We are not great at understanding and focusing on the single biggest financial problems because we're not often given that information. Those are the insight. Those are the things that's like, I know exactly what I need to do. Stop worrying about$500 worth of office expenses. Everybody's always worried about this little thing when you have a$200 ,000 problem. Yeah, we'll get to the office expenses, but fix your big problems first. You're never, you know, like I was looking at a, again, a different client recently and, and they had, you know, almost all of their business is labor.

15:24It's a consultancy, almost all of their business is labor. And they were worried about where they're putting their meals and entertainment. I'm like, meals and entertainment ain't changing your business. Let's stop worrying about that. But again, that emotional thing is I have fear and I don't know what to do with all of this stuff. Let's get the information in a way that's quick, simple, and easy to understand. So you don't have to become an accountant to understand what to do. Yeah. All right. So I want to maybe share about like how you directly engage with that looks like Spencer. So someone's listening to us like, listen, I feel safe and I I feel safe to have conversations that maybe, you know, I might be embarrassed about, you know, that the fact that we've haven't updated, you know, we haven't.

16:07What's that? You know, when you update your books to keep regular. We've seen books that haven't been reconciled for over two years. So, OK. All right. You're in you're in safe hands. So, Spencer, maybe just share a little bit about what engagement with you looks like as a service provider and so forth. Yeah. So, you know, we help accounting not suck for entrepreneurs. We help make accounting not suck for entrepreneurs. So that's what we do. And how we do that is we are the outsourced accounting department. So we actually provide a bookkeeper and controller. We do all of the SOP manuals. We do what's called a diagnostic look how things are, set a plan, onboarding plan.

16:48We call it like our fast tracks to clean books. So within a quarter of signing up with us, you'll have clean books moving forward. Again, SOPs in place. All reconciliations are done. All of the basics is handled. The hygiene is done right, and we get that complete in a quarter or less. And then on the other side is going to be the insights. So we have like, I hate the reporting that comes out of any accounting software. It's designed by accountants for accountants, not designed for entrepreneurs. Some are getting better, and there's lots of BI tools, but still. So we actually built our own software that sucks the data out of when we work with QuickBooks Online is the software that our customers works with.

17:26Sucks it out and then actually does a lot of data visualization. There's a lot of we do all of the sorting in there. So through the beginning of the package, you understand exactly what's going on. That's where like the good advice piece comes in. You know, most of our clients have one or two calls. I don't trust my numbers. Maybe I trust my numbers, but I'm not getting good advice. So we solve both of those through us being your in-house accounting department, dedicated team, all of that. And just to speak to that, like the way I think about, you know, if you were to build a house, everybody knows you'd have a general contractor, a bunch of subtrades and a couple of laborers.

18:00We all know that standard, blah, blah, blah. Same things exist in an accounting department. But what happens for smaller businesses and I'm talking about under five million, sometimes under 10 million, we can't afford the whole stack. So we hire a bookkeeper to run our entire accounting department. That's like hiring a laborer to build your house. You'd never do it. Typically on the accounting department, you've got CFO, controller, bookkeeper. There's other names in there, but fine. Right? But if you're a three, four, five,$8 million business, you can't afford somebody throughout that stack. So we end up with that mistake of hiring a laborer to run our accounting department, a bookkeeper to run our accounting department.

18:35So we get a slice of each of that so that you have the capacity because you typically don't need a full-time bookkeeper in a$3 million business. You don't need a full-time controller, but you need a bit of each and you need somebody who knows how to manage that. So that's what we do. We are the outsource accounting department and we handle everything in the accounting side of the business. Yeah. So your website is shiftfinancial.co. When somebody goes there, where would they go from here? What do you recommend they do? Well, there's a few things and there's, you know, going on the website, we have a contact forum, all the kind of stuff you'd expect.

19:08But just actually as a thank you for bringing me on the show. So I'm Spencer at shiftfinancial.co. The first three people to shoot me an email, what I will do is I will do a one-on-one review of your books with you, show you the good, the bad and the ugly of what's going on. The last person I did that with, it was a one hour call. I did a review of his books. We used our software. He sent me an email. We didn't actually do any work together after that. But he goes, these are the top three things I learned and it's transformed my business. So again, it's a one hour. You can tell by how I talk. I'm not salesy.

19:41I'm not pushing anything. I'm here to help change the world. If you're an entrepreneur that wants to change the world and you're feeling stuck, embarrassed by the state of your books and you need some help, I'm happy to do. The first three people will be free. After that, we can talk. But the first refer to this podcast. I will do a free review of your books with you. That's where I would go from there. For those people that are going like, oh, this is this is actually resonating right now. I need some help. That's how we know. Spencer Shainan, again, founder and CEO of Shift Financial Insights.

20:11Your book, by the way, number one bestseller, Entrepreneurs, The Surprisingly Simple Path to Financial Clarity. And again, your website, shiftfinancial.co. Spencer, thank you so much for joining us. Josh, thank you so much. Really appreciate it.

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