Madeleine welcomes Robyn Myer, a standout member of the direct acquisition team at Relay: a business and money management platform specifically designed for small and mid-sized businesses.
Implementing the Profit First Method
Robyn explains that the Profit First system flips the traditional accounting formula (Revenue - Expenses = Profit) to Revenue - Profit = Expenses. This crucial mindset shift ensures you pay yourself first, forcing your business to operate within the remaining expense budget.
- The Problem with Traditional Banks: Many banks make it difficult and expensive to open the multiple accounts needed for the Profit First method.
- Automation is Key: Utilize auto-transfer rules to automatically move funds between accounts based on percentages. This ensures consistent allocation for profit, owner's compensation, taxes, and operating expenses, even during busy periods.
- Frequency: While Profit First recommends twice a month, Relay users can set transfers to run daily or weekly, especially when starting out or receiving frequent, inconsistent deposits like those from STR platforms like Airbnb.
Gaining Cash Flow Visibility and Organization
A common blind spot for STR hosts is feeling "in the dark" about their cash flow, even if they track revenue well.
- Stay Organized from the Start: It’s critical to know what you're making, what’s tied to specific expenses, and what is your actual profit. This requires setting up systems and processes.
- The Danger of Commingling Funds: Robyn emphasizes the number one rule: do not commingle personal and business finances.
- Scaling with Clarity: As you grow from one property to several, keep funds separate:
- Multiple Properties, Single Entity: Use Relay's accounts to separate funds for Property A, Property B, etc., even under a single LLC, and utilize tools like Airbnb to direct payments to these specific accounts.
- Multiple Entities: If you have separate LLCs, Relay allows you to manage all of them under a single secure login, easily transferring funds and maintaining a consolidated view.
- Common Blind Spot: Business owners often lack a clear view of which properties are truly profitable, sometimes allowing one to cover the losses of another.
Tools and Systems for Scaling
As a business scales, it's essential to outsource and bring on experts.
- Securely Collaborating with Your Team: Relay offers different permission levels to invite bookkeepers, CPAs, or virtual assistants (VAs) without sharing your bank login credentials (a major security no-no).
- The Power of Virtual Cards: Relay allows you to create physical or virtual cards that are tied to a specific checking account. You can set spending limits (daily, weekly, monthly) and assign cards to specific team members (like VAs or property managers) or even specific properties for easy expense tracking.
- Streamlined Payments and Tax Reporting: Relay simplifies 1099 reporting by requesting payment details (like W-9 info) via text or email, ensuring all necessary tax information is accurately collected from the recipient.
Building Your Reserve Fund for Peace of Mind
Being prepared for unexpected expenses (water heater breaks, property damage, floods, etc.) is crucial for long-term success.
- Start Small: It can feel impossible to start a reserve fund, but Robyn encourages...
