Ep. 63: Understand Your Numbers to Become a Strategic CEO (Guest La'Vonne Shields - Accounting Strategist)
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Business is like chess; if you don't know how to play, you'll eventually get into a desperate situation. By understanding your numbers, you can make informed decisions, which will give you the ability to transform into a strategic CEO. To discuss this topic, we are joined by La'Vonne Shields, the Accounting Strategist. She helps executive coaches and consultants increase their cash flow, reduce taxes and maximize profits. She has over twenty years experience in helping business owners find clarity around their finances. La'Vonne is also an NLP certified Master Practitioner.
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Other Mentions: Jheryl Busby - Moneyball - Queen's Gambit - E-Myth
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By Understanding Your Numbers, You Can Transform Yourself Into a Strategic CEO
From the Episode:
Heather: “We're going to be talking about something that's near and dear my heart we're going to talk about how business owners, sometimes they feel confused about their numbers. They're not really sure how to read their financials. There's a lot of confusion around it. People coming to you what is it that they don't understand?”
La'Vonne: “They feel like there's a difference between the deduction and expense; they need to know all these different things. And I feel like it's so overwhelming all the different lingo. That's technically saying the same thing just from a different perspective. So a lot of times it's just, they don't even know what it is.
I had one client who said, I don't even know what books are. Someone's asking me for my books. Have I don't even know a books are, what does that mean? Yeah. I mean, You went through the same training. I went through, they teach us to disassociate from the people like we learn, okay, these numbers go here and this is how you generate a profit and loss, and this is what it means and all these good things.
However, there's a person making the decisions that is deciding, oh, I'm going to use the business card to pay my personal expenses. Yeah. sweetie, you can't do that. Let me tell you why you can't do that. And now let's figure out a way for us to get it to where the money that you're generating in your business can be put into your personal accounts to cover your expenses.
It's a win-win we can figure it out and it's just that. And that's why NLP really became a big part of my services was because it's helping them understand it. You and I know they get scared. They're scared because they think it's so much more information than it actually is.
I actually created a workshop, has caught the bottom line for the Inland Empire Women's Business Center. So I removed QuickBooks, everything from the entire equation of teaching accounting to small business owners. And I talked about, what the chart of accounts are and how that connects to your financial reports and then how that connects to your tax return.
So then now they're able to reverse engineer their way into it, and then have better conversations with their current tax preparer, or realize that they may need a new accountant or tax repaired because now they understand they know what they didn't know. And now they can really focus on the growth.
That's why I say it's that transition from the technician to the CEO, because now you're using your numbers to run your business. Like the big CEOs do, and you can make better decisions.”
Heather: “I love it. Because I work with a lot of creative entrepreneurs. The focus of my podcast used to be a lot of creatives on my show, but then I realized. People really need more answers when it comes to financials and their money. I just assumed that people knew these things inherently because we work in that realm.
But, with all the questions I kept getting, I was like, maybe I should be talking about this a little bit more often on the podcast. when people come to you, are there things that they're mystified by? I know the profit and loss and a balance sheet, especially a balance sheet. People are just like, I don't even know what this is?”
La'Vonne: “Exactly. Yes. There are so many different areas of demystification that I guess I go through with a lot of clients. The first one is the. This can be fun That's the first, barrier I get around. And then once I do that, they're usually able to trust me enough to understand why I can be so having three sons.
And then we also have four nephews and they all played sports. And then we did sports for like eight years straight because we had all of these boys stair-step down for all these years. I was able to start to relate business to sports, which gave it a different perspective. And then I was able to finally watch Moneyball all the way through and saw that's exactly what it is you're looking to do.
Business is just like sports. You have a strategy. You're looking to get to the goal. And then your numbers are your scorecards letting you know if you're winning or not.”
Heather: “I like this. Yes, it's very cool. I don't know anything about sports, but I'm into business scorecards so I can relate to this very cool I'm going to have to figure out a comparison to business and musical theater, that is going to be my thing.”
La'Vonne: “You can definitely associate it with, I used to associate music and business all the time. Cause I will tell people, your businesses sometimes it's, slow jazz. It's runs in up a particular kind of cadence. And sometimes it's hard rock it's just going not saying that either one of those is wrong.
This is a matter of, is that the music you want to. Is that how you want to function? So then let figure out where these pieces are. grew up in the music industry. My dad was a president of a record label. When I first started working, it was interning at his record label.
I started at 10, so I learned to work with music. In my head, I'm an award-winning dancer, but in my real life, I'm a business coach and strategic accountant.”
Heather: “That's very cool. have a creative side to me too. And people are always like, why are you an accountant? That doesn't make any sense, people can have two sides!”
La'Vonne: “But there is a stigma, when it comes to accountants and, I believe you and I, helped to break the mold.”
Heather: “Yes, I'm loving this. You're even more fascinating. This record label thing, I have to ask you more about that later. you know, I have clients that come to me I can see certain pitfalls that these clients are going through when they first come to me. And I work with a lot of really small business owners, some of them are new to being an entrepreneur, or maybe they're one of those people that kind of fell into entrepreneurship and then realize, oh, this is a business. I have a business here; now it's too late. They should have been doing a bunch of things before. I talk about these pitfalls a lot, but I would love to know what kind of pitfalls that you see. And are you working with people that are really small like solopreneurs, or you talking about like businesses maybe are doing like a couple million?”
La'Vonne: “I have a range. So I do have, my younger ones, my low six figures. And then gone all the way up to 5 million. My sweet spot is that high six figures, seven 50 to 3 million because there's justification for the type of services that I offer. I've seen a lot of them.
One of the biggest pitfalls see with a lot of business owners is how they manage their cash flow.”
Heather: “That's on my list. I was going to ask you about that.”
La'Vonne: “It's that's actually one of the first things that I come into. correct. When I'm working with the business owners, I give you're just moving cash constantly. That's where your stress level is coming from because it's constantly moving as opposed to what I used to call the pause.
Money comes in, we pause how much is in there, how much is owed, how much is owed to us? Let's figure out what we gotta do. What's our bare minimum that we know we need to keep in the account and then we pay what's. Now you go out there and make some more money… Pause!”
Heather: “Yes. Pause. I like that. Pause.”
La'Vonne: “Pause. Yeah. I have one client, I started off with this. I was just supposed to be doing month end reconciliation. That was my original purpose. When we first started working together. By the time left that assignment, I was the outsource CFO, managing HR, payroll, all of this kind of stuff. It was crazy. I walk in one day and he says, Hey, I paid the such and such vendor.
I said, why? Well, they called and I said, okay. So I just paid it. All right. So, you know, payroll is this week, right? Oh yeah. That's why they hadn't been paid off of it. Didn't have a PO on their bill, which is your new rule that you said you wanted every bill that came in to have a PO to it. So that's why you're not allowed to pay bills anymore. You're not allowed to pay bills anymore. And he wasn't from that point forward that he was not allowed spend any money on his own.”
Heather: “How do you help these clients understand their cash flow? Are you using some sort of graphical type of reporting or is it sitting down with them and showing them what their cash is doing?”
La'Vonne: “It's not anything as extravagant as that. It's more so the proof is in the pudding certain business owners can understand that projection and looking at cash flow from that. Off point and be able to manage that way. That's a different type of business owner.
They're already in that CEO mentality. When you have those who are technician based, passion-based, which is usually a lot of clients that I work with is they do what they do. Cause they're called to it, have a few that, understand business, but the ones that tend to work with that's where they are.
The biggest way that I support them is. we do the pause first is where all the bills. So before you do anything, we have to have all the bills coming through. And so then once we stopped, then I can show them. So look, this is what we owe people. This is what we've got in the bank. We need to make a decision. The visual tends to help, because now they understand where everything is. And then as I'm putting the go, the visual, letting them know. So the reason why I'm able to put this visual together is cause you gave me a bill. I have a backup to it so I can reference back to it. So now in three months from now, if we had to come back and revisit this conversation, guess what we have backup.
We have QuickBooks that has this. We have the payment proof of this. We have the decision that was made right here. We can see it all and not have to worry about. What happened three months ago, this information is going to be there. That's that stress reliever, because that's usually what happens with most small business owners.
They get put in a position where they have to prove their financials, whether it's a workers' comp audit or it's, tax time or someone's, they have to do a loan and they need to get documentation together. There's a moment where they have to prove it and they realize, oh, I don't know how; I have no idea. And 2020 COVID was proof of that. There were so many business owners who couldn't get access to the relief funds that were designed to keep them afloat because they had way of being able to do that. it's that proof is in the pudding thing. If you see it, then you can understand it and now we can play with it.
Heather: “Okay. We got to pause and we gotta get some proof in that pudding!
I'm always pushing that you have to have clean numbers. Now if you've got a bigger company, God, I hope you have clean numbers! And are keeping your books up to date. But I'll have, small business owners come to me. They were like, oh, I think I know what I'm doing in QuickBooks. And it's just a mess. And they're trying to make decisions based on this jumbled piece of data. And I'm like, you got to have clean information to make good decisions.
What are some issues that you've run into where people needed things cleaned up and they were just running by the seat of their pants? What are some mistakes that people could make doing that?”
La'Vonne: “The biggest one that I've come across is that the chart of accounts, it doesn't reflect their business. So they have no idea what they're looking that when they go and look at the reports and then they've had five different bookkeepers than themselves, family members, all these different hands in the pot, and they've all looked at their business from a different perspective.
I see this as that. I see this, this, that, and then you put it all together as a business owner. Like I have no idea what. I mean, I know I spent money. I know that I made money, but this doesn't tell me any story. So one of the first things I do with a lot of my clients is before we even look at their QuickBooks, I tell them walk me through how their business goes.
So as they're talking to me, I'm putting together what I think the chart of accounts should reflect. And then we go and look at it and I go, okay, so this is what it shows. And these all equal the same thing. You have one account named five different ways,
once we start to do that process of just showing where everything goes, then that's when that moment comes in, because then they see it like, oh, I made that. That's how much I spent on that. Are we sure? Oh, yeah. That's how much I spent, that's how much I have left over. Where is it?
Remember when he started using business card to pay your personal expenses, that's where it went oh, okay. All right. Now we got a game plan. We know we don't like that feeling. We know we want to generate more. Now let's start, creating a strategy and implementing it.”
Heather: “I love that. Believe me, I've run into that myself. Now you serve people that are in the service based industry; are they coaches or in other service based industry?”
La'Vonne: “Coaches consultants. I have a security company, I have hairstylist. So it's mainly the service base and that's because I didn't enjoy doing inventory when I was in school. So it was never my favorite coming out. if you are inventory based, I like it when it's real clean inventory.
When it's a lot of moving parts, a lot of different valuations that becomes a little overwhelming for me. And I can't see the forest for the trees. service base, my coaches, my consultants those are my heartfelt, I love coaches and consultants, especially those who have gone through development training because they know how to see somebody else's stuff. But they can't see their own. And because I speak the language, I can help them. I can talk to them in different. So I have client where she works in behavior. So he works with the children and adult with autism, and she does behavioral training.
I was able to talk to her in her language because of the training, I went through a of how we're going to be working on her behavior, working on her actions and how that reflects to her goals. And she got it. She's oh, okay. I get it. So then we're having a discussion. It's a real heartfelt coaching.
About what are we doing with these numbers? And when it reflects your big picture, she just opened up a second location that just kinda came out of the blue, landed in her lap, but it was a perfect thing. We got that going. We're at working on two other locations right now. She is going crazy.
And it's been a ball to watch, but because she can see the forest for the trees. That's great.”
Heather: “Pause, proof is in the pudding, see the forest for the trees. Okay. We're onto something here. This is really great. One thing happened the last year, we can't avoid it. COVID made everything go upside down in accounting world and everybody's business. And we had the weirdest tax season ever. And all of that. for a while there, we thought maybe COVID was going away.
It's certainly not going away. Obviously, some companies did really well during COVID and others it was just horrible. So do you have any words of warning kind of, as we progress through this change over in COVID, that is tumultuous.”
La'Vonne: “That this would be a great opportunity to revisit your business plan or create one, if you didn't have one, because now we know pandemic proofing is now a new strategy that throw into the mix. And being able to, and everyone loved this word last year, drove my friend, crazy pivots. If you don't know how to pivot and where to pivot from yet, but if you don't know how. Then this is what's going to happen. And then for all of those who COVID was a success for them, especially those that were, fast success. Do you know what to happen when you're on the other side of this now that it's not so condensed and, online by itself, once it's expands out, do you still have that same level of this would be again the best time to reevaluate. Okay. So what's the plan we're getting ready to approach the fourth quarter of 2021. Now that we have realization, like you said, it's not going away completely. We're going to have a new, normal now it's a matter of , how are you going to adjust to this new? Now, what's the new beat that we're going to be dancing to.”
Heather: “There's all different types of ways to generate revenue. And I think a lot of times entrepreneurs, they get in business. They have single viewpoint of how they can make money and they don't think about all the different ways. Certainly, with COVID we've learned that, people if they had offered classes live, now they can offer virtual classes to the masses. So there's different things. I'm not going to use the word pivot, but there are ways that we can alter our business. Have your clients, done some interesting changes as far as ways to generate revenue that were different from before?”
La'Vonne: “Yeah. And a lot of them did embrace the virtual environment in some way, shape or form, whether it was like you said, now offering services online. They also took what they knew and the concept of their services and turn them into a evergreen. it became that capability of saying, okay, so if I can't work directly with someone, then I can teach people what it is that I know.
Since we're in an environment with, everyone's distancing themselves a certain bit, we're going to get a lot of DIY’ers. You're going to get a lot of do yourself. Why not provide them with the resources that they need to do it themselves?”
Heather: “Yeah, I love that maybe you're like this, but I love technology I kind of geek out on technology and I'm always looking for something that's the new thing. And I get a little bit of a shiny object syndrome with that. But as far as accounting software goes, it always seems like there's something new that's on the market, but do you have any favorites? You look like you're very involved with QuickBooks, so I'm assuming that that's your go-to software.”
La'Vonne: “It's my go-to. Like you said, I'm huge techie, I guess for me, that's the simplest thing that I think most techie people can deal with is cloud-based as much as you can. Cloud-based as much as you can. I tell people, you know, I'm married to Microsoft.
So everything that I use has to be able to work with him. And if he can't work with him, then we can't play together. Everything I do fits around my Microsoft world. Using OneNote, I use OneDrive. I tell a client, first, we got to start with where's the place where you can store stuff and have access to it.
How can we make it to where that in any given moment of time, if necessary, no matter what's going on, we can get access to the information. That's my, biggest of tech for people is find a way of digitizing and cloud basing as much as you can. And having the backup and things associated with it, but that is going to be the lifesaver for so many people because they get so inundated with the paperwork of accounting, the paperwork of, the numbers.
So I'm supposed to keep everything well, he didn't have to keep that that was something that didn't really require to be kept, but it had numbers, it, you didn't know what to do. I get it. If we can take away that overwhelm of the, what do I do with all this stuff, then it becomes a lot easier to function. The faster you can get over that hurdle, then a lot easier. To me, everything comes So yes, I use QuickBooks. Love it. That's my first offer, but I tell people to do what you love, do what to left. Yeah. Work with something that works for you, but definitely, QuickBooks and cloud-based systems is my thing.
I don't even use paper. Like when I take notes, I have a Surface Go and I opened up my OneNote and I use my pen and I write my notes on that. Like when people give me paper, I started to have a little bit of a hyperventilation moment I have to have something to do with that. It has to go somewhere. I am about a 98% paperless environment.”
Heather: “Awesome. Yeah, me too. We're both environmentalist just by our actions!”
On your website, you talk about transitioning from business owner to CEO, what is it? Business owners have to do to become, rather than just a quote unquote business owner, move into that CEO.
Is it a mind shift change or is it action? What is it that makes you move from business owner to CEO?”
La'Vonne: “It's all of the above. It's all of the above. It's now realizing that you need to think of your business from a different perspective. It's not just an extension of you. It is a moving, living, breathing creature that you just happen to have some control. it's separating it from them and making that transition there.
Then once that transition comes into play, and this is all stems off of the book, the E-Myth, that was probably my aha moment book that I ever read. Because now once you can separate yourself from the business, then you are able to see its individual moving parts, because you're above it.
You're no longer in it. Boots on the ground. You're actually able to see above it. And this is where I can tell people you can relate business to chess or. I say baseball because that was the sport. I hated the most. And I was so devastated when , we had to actually learn it because our kids were playing and I was like, we're not playing baseball.
But I had learn baseball. And once you learn it, it's equivalent to chess because you have to learn you're going to sacrifice to advance your runner around. Going back to that Moneyball example I was telling you about earlier; learning how to look at it as, for lack of a better term, gamble; that it is you're going to create a hypothesis and then you're going to see if it works. And then best case scenario does worst case scenario. You have a lesson on what not to do next time or where to make a tweak. So if you can separate yourself from it, see it as the sport that it is, and then have some fun with it.
Then now you can start looking at a, how do I improve all these different pieces that I've got, which means you're going to start creating systems so that you can easily identify. Smoke before it becomes fire. You can see what's costing you money before it drains you completely, because you're a able to take that step above it.
But in order to do all of that, starts with the realization that you and your business are separate. Even if you're a sole proprietor, you still need to be able to take that step away from it so that you can see it from different outside perspective.”
Heather: “Yeah, so you're taking the ego out of it. So it's not oh, I didn't get enough people downloading, whatever it is you like. Okay. You can actually think about it rather than being personally hurt by it.”
La'Vonne: “So what do we do? Let's reverse engineer it so we can figure out what didn't work. So we don't have to throw the whole baby out with the bath water. We can actually just fine. Oh great campaign. You just had to go into the wrong people. Did you realize that you're, the total opposite of your target market was looking at your marketing. Now let's rerun that again and see what happens kind of thing. But once you can dissect it, then you can figure out the recipe, you can figure out where is it that I do this? And then it becomes fun. Okay, if we tweak this, then what happens? If we do this, then what happens as opposed to we got to do this?
Cause we've got to do this because when you're operating from that sense of fear and lack, and you're going to make bad decisions when you operate from the let's give it. What's the worst that can happen. Right? I mean, I have a client, that's her favorite words…yeah, but we didn't die Lavonne, so we're fine. Yeah. But did we die? So that's always her saying, the failure is not the fear. That's not where you want to have the fear because that's where you learn. And as long as everything is still copacetic, then you have the capability of being able to survive it.
And if you can survive it, that means , you can learn from it, hopefully, and then you get on the other side of it and then you figure out how to keep going. But if you have no systems, you have no plans. You can't separate yourself from what it is then gonna be a very long tortured, overwhelming journey.”
Heather: “If we went into entrepreneurship, we went into it, knowing that it is full of risks and surprises and all kinds of things. So I want to back up to one thing that you mentioned chess, and I have this fabulous picture of you look very intense and you're playing chess and it's like Queen’s Gambit or something. Tell me about this picture because I'm going to be using it as a promo for the show. So people are going to say. What is that about? That's awesome.”
La'Vonne: “Interestingly enough, when I realized that you can use accounting as a strategy, I was rolling with that , for a little while. And then I saw Queen's Gambit and I was like, I knew business was associated with chess you have to know how to move the pieces across the board and knowing what you're going to sacrifice, in order to do it. And then Queen Gambit came out and I was like, I think I know what I want my visual to be. I went and bought a chest set, and so we're just going to have some fun with it.
And that's where it came from. I want people to see that it's a strategy as a process. It's a thinking woman's game. And the whole point is to see it as the game and have some fun.”
Heather: “I love the picture. It's really good. And you look so intense on it. . I was like, a little bit shaking in my boots. I was like, Ooh, she's intense!
You've been in business for a long time just briefly, if you wouldn't mind, what are some of the biggest changes that you've seen in the accounting industry from when you started till now?”
La'Vonne: “When I started that's, when QuickBooks was really making its way across the small business community and to see. Two things from a positive side, he saw a lot more business owners at least attempting to take ownership of their numbers from how had been on the negative side.
He saw people who assumed as long as they learned QuickBooks that they could be looking for. So it was a catch 22 on both sides. You know, I have, author friends, and they will tell people just because you have word that has make you an author. And I would go just because, you know, QuickBooks doesn't make you a bookkeeper.
So I came across a lot of that. But what I did notice is the technology change., my, friend and I we always laugh. We say, we're always ahead of technology, but like, why can't it just do this? And the technology shift to me has made it to where. We as accountants can be more advisers because we're not focused on
the small part of getting the data in technology has made data entry, the easiest thing ever. Now we get the focus on analysis and strategy. they get excited talk to us because we're talking about how to help them build and lead their business, as opposed as telling them you owe this much in taxes now, right?
Because this is what you did all year. And now this is January. We can't go back and fix it. So I'm going to tell you, like I told her last year, don't do. Now we get to actually have quality conversations with a lot of business owners and it's opening up us to be a lot more advisory as opposed to transactional. That's what have seen as happened over at least the last 20 years.”
Heather: “All right. Before we wrap up, do want to ask you about a couple of different things. You mentioned that your dad had a record label. Do you mind if I ask what record label this was?”
La'Vonne: “Yeah, sure. He was president of Motown records from 89 to 95.”
Heather: “Really? Wow. That's intense!”
La'Vonne: “He was president of Motown records. Yeah.”
Heather: “Oh my God!”
La'Vonne: “Before he went to Motown, he was at MCA records. At that time he was working with Patti LaBelle. He had actually was part of the the founding of New Edition. And then he went to Motown. Where he expanded. And as for boys to men came through Shanice Wilson when Diana Ross came out with that amazing killer body that she came out with at 50 and just shock the whole world, that was underneath his reign, so to speak. I got to see so much working from, I used to work in different. I never worked directly for him. I worked in different departments, so I would be, an assistant for hire. I was the fill-in receptionist. By the time I was 13, I was an executive assistant for somebody who,, when , their assistant got hurt. And so before they figured out if they were going to get a temper or not, I was running that office for a little while.”
Heather: “Wow. You must have some incredible stories. Wow. Especially for a kid.”
La'Vonne: “I got some pretty interesting little stories. Yeah, it was a very fascinating experience.”
Heather: “Wow. I'm sure that there's things that happened that you probably weren't able see, though.”
La'Vonne: “It was, it's amazing what happens. It's amazing what happens when your dad's the boss.”
Heather: “Ooh.”
La'Vonne: “So I'll let you play with that a little bit.”
Heather: “Wow!”
La'Vonne: “I never had to pull the card, but it was amazing how many things that I was at. Just being to say his name. And it was like, oh, great. Interesting, but the great part was always positive experiences. It was just, it was great opportunities. I got to meet amazing people. I got to work with some amazing people.
I worked in the catalog department where they were relaunching, mastered classics of the Jackson five the Supremes smokey Robinson. So I was able to actually plan that party. This is, I was 13 years old. I planned the launch party for the anthology series for our catalog department. So I got to do some amazing things that are really early age.”
Heather: “Wow. That is incredible. What is your dad's name? Just so that we can look it up.”
La'Vonne: “Jheryl Busby. So if you think of Cheryl, he was a twin. And so it's Jheryl Busby, that was my father.”
Heather: “Wow, that's incredible. What a great childhood. Oh my God. Amazing. So Lavonne before we, and I want to let people know how they can work with you and where they can find you on the socials and all of that. Tell us about all that.”
La'Vonne: “Okay, so you can definitely go to my website, accounting, strong.com, really simple. And on there, you can see what I have to offer a little bit about me. Schedule an accountability session. If you want to talk about what's going on with your numbers. I am on LinkedIn and Facebook under my name Lavonne Shields and you can find me there and then you can also find me. I have a Facebook group called accounting for the non-accountants and another one called strategic accountant. My goal is to help change the viewpoint of accounting for small business owners.”
Heather: “Wow. That's very cool! On your website, you have a great newsletter, I signed up for. You've got a blog. You've got calculators on there. If people are looking for some kind of financial calculators, you've got an intense blog. I was really impressed. I was like, wow, I've got to up my game on my website!”
La'Vonne: “Thank you.”
Heather: “Lavonne, this has been so great. Thank you so much for being on the show. I've really appreciate it.”
La'Vonne: “Thank you so much it’s been an honor and a treat.”
