Small Business Big World Episode 22: Using Business Cash Flow to Increase Your Net Worth
This is Small Business Big World, our weekly podcast prepared by the team at Paper Trails. Owning and running a small business is hard. Each week we’ll dive into the challenges, headaches, trends, fun and excitement of running a small business. After all, small businesses are the heartbeat of America and our team is here to keep them beating.
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In this episode of Small Business Big World, host Chris Cluff is joined by Doug Spurling. Both speakers take listeners on a deep dive into the essentials of financial growth and business scalability, offering advice for entrepreneurs. This episode provides a ton of insights, especially for small business owners aiming to turn their passion into profit and build long-term wealth. Whether you’re just starting out or looking to scale your operations, understanding how to manage your business cash flow effectively can be a game-changer.
The Importance of Working on Your Business, Not Just In It
Doug Spurling, the founder of Spurling Fitness and Waves and Wilderness, shares his remarkable journey from running a fitness business to becoming a successful real estate investor and consultant. His story highlights the critical shift from being a “doer” to becoming a manager and strategist. For many small business owners, it’s easy to get caught up in the daily grind, focusing on the immediate tasks that keep the business running. But as Doug explains, the real growth comes when you start working on your business rather than just in it.
One of the key takeaways from this episode is the importance of transitioning roles within your business. Doug talks about how shifting from day-to-day operations to a managerial role allowed him to concentrate on scaling his business. By doing so, he was able to achieve significant financial success and build long-term wealth. This shift is crucial for any business owner looking to enhance their business cash flow and increase their net worth.
Consistency, Patience, and the Role of Business Cash Flow
Throughout the episode, consistency and patience emerge as recurring themes. Doug emphasizes the necessity of regular performance reviews, such as weekly check-ins, to ensure that the business remains aligned with its goals. These check-ins are more than just progress reports; they are opportunities to adjust strategies and stay on track. Consistency in these practices can greatly improve your business cash flow by keeping operations smooth and predictable.
Doug also discusses the importance of transparency with your team. By sharing business performance and goals with employees, you create a collaborative environment where everyone is working toward the same objectives. This approach not only keeps the team motivated but also enhances overall business efficiency, positively impacting your business cash flow.
Long-Term Strategies: Investing Beyond Business Cash Flow
One of the standout moments in the episode is Doug’s discussion on the difference between cash flow businesses and cash-out businesses. He explains that while generating monthly cash flow is essential, it’s equally important to reinvest that cash into long-term assets like real estate or index funds. This strategy is particularly crucial for business owners who are the face of their business and need to plan for their financial future.
Doug shares his personal experience of turning a lake house into a successful Airbnb venture, which provided steady business cash flow and helped him leverage tax advantages. This example illustrates the potential of real estate investments as a tool for increasing net worth. By diversifying your income streams through investments, you can create a more secure financial future while continuing to grow your business.
The Evolution from Technician to Entrepreneur
Doug’s journey is also a testament to the evolution from being a technician, focused on the day-to-day tasks, to becoming a manager, and eventually an entrepreneur. Drawing insights from Michael Gerber’s The E-Myth, Doug underscores the importance of continuous learning and implementing new knowledge. He also highlights various investment strategies, including short-term rentals, commercial properties, and traditional brokerage accounts, all of which can contribute to long-term wealth.
For small business owners, understanding and managing business cash flow is just the beginning. Doug’s insights show that by treating your business like a game—keeping it engaging and enjoyable—you can focus on the basics, such as consistent marketing, knowing your numbers, and taking care of your team. These fundamentals are instrumental in achieving business success and increasing your net worth.
The Challenges of Scaling and Managing a Team
Another key takeaway from the episode is the challenge of transitioning from doing the work to managing a team. Doug likens this process to being a maestro conducting an orchestra. The focus shifts from playing the instruments yourself to ensuring the entire performance is harmonious. This shift is essential for scaling your business, but it requires letting go of some control and trusting your team to execute your vision.
Conclusion: Tune in to Scale Your Business and Grow Your Wealth
In conclusion, this episode of Small Business Big World with Doug Spurling is a must-listen for any entrepreneur looking to scale their business and achieve financial success. From practical tips on managing business cash flow to long-term wealth strategies and team development, Doug’s insights are invaluable. At Paper Trails, we understand the fears and headaches that come with payroll, HR, and small business management, and we’re obsessed with helping small businesses navigate these challenges.
By focusing on the basics, maintaining consistency, and leveraging the right investment strategies, small business owners can build a sustainable and profitable business. Tune in to the podcast to gain a wealth of knowledge and get inspired to take your business to the next level.
This podcast is a production of Paper Trails. We are a payroll and HR company based in Kennebunk, Maine, and we serve small and mid-sized businesses across New England and the country. If you found this podcast helpful, don’t forget to follow us at at Paper Trails Payroll across all social media platforms and check us out at papertrails.com for more information. As a reminder, the views, opinions and thoughts expressed by the hosts and guests alone. The material presented in this podcast is for general information purposes only and should not be considered legal or financial advice. By inviting this guest to our podcast, Paper Trails does not imply endorsement of or opposition to any specific individual, organization, product or service.