159: How to Level Up Your Profit and Keep More Cash with Ciara Stockeland

Andrea Liebross: Welcome to the Time to Level Up Podcast. I'm your host, Andrea Liebross. Each week, I focus on the systems, strategy, and big thinking you need to CEO your business and life to the next level. Are you ready? Let's go.

Hello, my friends. Welcome back to the Time to Level Up Podcast. I am thrilled to have a repeat guest today. I am having today a conversation with Ciara Stockeland and Ciara has a book called Inventory Genius. She is an author. She also has a podcast by the same name Inventory Genius and she is a coach who helps business owners use their inventory to create more profit and more cash.

She recently also, or at the time of recording this and yet completed an Ironman event in Hawaii. That's super exciting. As you know, I am a big fan of knowing your cash flow, and having a profitable business. I wanted to invite Ciara back on to chat about how you make decisions based on your numbers. Sit back, buckle up, and listen to my conversation about all things numbers, profit, inventory, cash flow with Ciara Stockeland.

Hey, listeners, welcome back to the Time to Level Up Podcast. I am thrilled to have a great friend back, Ciara Stockeland. She and I recorded, I looked back, it was 2021, it seems like 100 years ago. We recorded another episode, a different episode but we now are both a lot more older and wiser.

Ciara Stockeland: We’re seasoned.

Andrea Liebross: We're seasoned and we have lots of things to share with you. So, Ciara, introduce yourself. I'm just going to have you do it.

Ciara Stockeland: Okay. First, I need to know how many pairs of glasses have you accumulated since our last conversation in 2021?

Andrea Liebross: Probably 10. They're like blue light glasses because when we're on Zoom all day, my eyes, I started to get floaters and flashes. This is a little too much information.

Ciara Stockeland: It comes from the seasoning that we have in life.

Andrea Liebross: The ophthalmologist was like, “It may not help at all but hey, try it,” and I haven't had the flashes and floaters since I've started.

Ciara Stockeland: I know. I need to do it too but it's all good. Well, I'm a Ciara. Hello everyone. I'll introduce myself here as a third-generation entrepreneur. Born and raised around small business. I have a passion for small business owners. I've had multiple small businesses, done really well with some.

I always like to say I've had lots of wins and I've had lots of losses as well and through that have learned a lot of things. My biggest hit was with a retail brick-and-mortar store that I started in 2006, built it and franchised it.

After I sold the brand to one of my franchisees, I built and sold a subscription box in 18 months so that brought me into kind of this digital space, and never thought I'd be a coach or consultant ever, like never even thought of it as an option until I started that business and started answering a lot of financial questions for inventory-based business owners.

That kind of segued right into this coaching consulting role which I absolutely love and I feel like God made me for but I had to do all those other hard things first, that gave the good answers for people. I feel like I'm right where I need to be and so I love to visit with small business owners about building profit and keeping cash in their businesses.

Andrea Liebross: Profit, such an amazing topic. Tell me what are maybe the top three things that you see small businesses think or do around profit or no profit?

Ciara Stockeland: Yes. I think number one is they focus the vast majority, vast, vast majority, even multi-multi-multimillion dollar business owners think about top-line revenue instead of bottom-line profit. I think a lot of that comes in the vanity metric. We all want 10,000 followers on Instagram but we don't take care of the 2500 we already have because we want a big number.

We want a million-dollar business but we aren't taking care of the $750,000 that's already coming in. We focus on top-line number. That's probably the number one thing. Number two, which goes hand in hand, is not understanding their numbers.

Most founders are visionaries. They're very good at solving problems. They're usually really great with people or selling. They're good at figuring out a solution, executing on it, but they're not very numbers-focused and they're very insecure when it comes to numbers and so they just say, “Well, I don't know, I have some money so I'll figure it out or I'll hire a bookkeeper or I don't need to worry about it.”

In fact, I was just talking to a potential client today. They have a fantastic business model and she was saying that one of the people in her business who founded it has said for years and years, “You know, we have good books, but I get them, I don't really know what they say so I'm going to shove it in the corner, go out, and do with the work again.” That would be the second thing.

Then probably the third thing as it relates to profitability is when they decide to grow, they don't grow off of how is this going to affect the profit of the business, they grow off of feeling a need for more money. Always chasing sales, but not fixing the root problem. The expenses, the trouble, the problems just follow along with the growth of the sale. You just grow all the problems along with it.

Andrea Liebross: Yeah, that's interesting. I was just having a conversation about someone that wants to grow a certain segment of their business. Thinking of all the things that that's going to involve and I'll call it like the logistics of it, I was like, “Oh, let's stop. Let's just stop. First of all, why do you want to grow that segment while someone was interested in?” not necessarily the most profitable but the one she's interested in, which there's something to be said for that because you want to be doing something you love, but it may not be the most profitable.

It's definitely the most hard to manage. I said, “Do it. But you haven't cleaned up all these other things that are going on over here, you haven't solved all these other initial problems.” So interesting that they're growing off the feeling of needing more. Should they grow? Should they pause? What do you think they should do?

Ciara Stockeland: Clean up their mess first. I was talking to a client a couple of days ago, and she's thinking of starting a really amazing marketing initiative, which will be fantastic. I said, “The problem is you don't have a good foundation at all. You don't know what's going on underneath in the basement. If we just keep building up, it's going to topple over. You're going to end up with no business at all, so much stress, a bunch of debt, or any three of the above.”

We have to fix what's going on in the foundations first. It's not the sexy fun work. It will become the sexy fun work, which I love seeing the transformation in clients of like, “I don't like the numbers,” and suddenly when they know how much power there is in numbers and they understand there's clarity, oh, now we're going to focus on numbers.

That doesn't mean they become a bookkeeper or an accountant. But they say, “Okay, that KPI or that key performance indicator, that number, I'm going to make that work for me.” Then we can grow really smart. Then we can do all the marketing initiatives we want because we have ways to track and measure, see performance.

Andrea Liebross: Do you think small business owners even know what their KPIs are?

Ciara Stockeland: No. I can say that because I know that I didn't.

Andrea Liebross: Yeah, because originally, you're just kind of like, “Let's just try this and see if it works.”

Ciara Stockeland: Let me exchange this idea for money. Oh, that worked. Let me exchange this thing for money. Oh, I sold it. That's exciting. I'll do more of that.

Andrea Liebross: Yeah, but you did sell it or it did work but how well? How well? How effective was it? What did it do for you besides give you that little high and it worked or it get sold? How is it working for you? If you're going to do the marketing initiative, how is that working for you? What did she want to get from it?

Ciara Stockeland: More sales.

Andrea Liebross: Okay, so she gets more sales. What's the problem? What do you think potential problems are that she's going to find eventually?

Ciara Stockeland: Yeah, there are so many expenses tied to those sales. We think we can grow the sales and it will fix things like, “Oh, I'll get a paycheck. I'll have more money in my bank account.” But when we don't understand what expenses are tied to the sales, those expenses just grow with the sales.

In my book Inventory Genius, I talked about the little kids' book If You Give a Mouse a Cookie. I say that's how I built my business. Not good. I was like, “Oh, I have all these customers. Now, I need a forklift.” Well, then I bought a forklift, but then I needed someone to drive it. Then if I had someone to drive it, I had to have someone to manage the person that was driving it. If I had that, then I had to have a corner office. I needed a bigger warehouse. All these things were just exploding, and I wasn't keeping any money. I had more and more and more money at the top, but less and less and less in the bank account.

Andrea Liebross: Gotcha. Gotcha. Really what you should have been thinking about, you should have been kind of calculating all those additional expenses with the forklift. I also thought about, “What about the license for the forklift?”

Ciara Stockeland: Yes, all the things. That’s one thing.

Andrea Liebross: Okay, should you buy the forklift or how do you know when it's time to buy the forklift?

Ciara Stockeland: Yeah, I think understanding what's attached to the sales and then backing into that. When I start working with a client, we always create the sales goal first, and it's not “I want to be a million-dollar business,” it's “What do you want per paycheck? Where does that sales goal come from? If they’re a current business, what are you doing now? KPIs, so what's your average ticket? How many people are coming into your store or shopping with you online? What's your conversion rate?”

Your main performance indicators, how does that feed into the goal? Okay, now if you have inventory, then we'll look at like what the sales cost you. If you don't have inventory, if you have subcontractors, 1099, what does it cost you to make the sales? What is the rest of the business costs? Drop down to the bottom, “Oh, we don't get to keep any of that money?”

Okay, so then we have different levers that we start to pull to make sure that bottom line looks good. We do all of that work first and then we know, “Should I get the forklift? Is the forklift actually going to produce more profit, just more busy work, or more expense?”

Andrea Liebross: More to manage and everything else. What do you think about creating habits or routines around looking at numbers? This is a question I get a lot. I mean, I was really good at it for like a month, and then it all fell apart. Tell me your thoughts on that one. I've got my own ideas, but I'm curious what you'd say.

Ciara Stockeland: Yeah. I think anything we don't enjoy doing, we need to do it first. A mentor told me once, “Eat the frog.”

Andrea Liebross: Yeah, that’s why I have that all over my stuff.

Ciara Stockeland: Yeah, just get rid of the icky hardest thing for us because if you don't, you're constantly avoiding it all day, all week. It's distracting you. It's taking so much time. If numbers, money management, especially if you have a lot of debt, you don't have a lot of cash, you have a lot of problems going on, we want to just avoid it. But let's tackle it first.

I always tell my clients to focus on it right away Monday morning. I call them Money Mondays. Let's just get after it right away, because not only do you get it out of the way, but you also line up here where you can look at what's going on in your business right away at the start of the week and then make educated decisions instead of [inaudible] my bank account. I don't want to file the receipts.

Let's just do it right away Monday morning. Now we know what we have. Now we can make a plan of action. The part we didn't like is taken care of. If you do that on let's say Money Mondays, that just becomes a part of your life. It becomes part of the routine. You just get it done with.

Andrea Liebross: Like brushing your week.

Ciara Stockeland: Yeah. Also layering things. In Atomic Habits, he talks about layering. Like brushing your teeth example, if you want to start flossing, you always brush so then floss when you brush. You're reinforcing a habit that you're already used to, you're just adding something on.

Andrea Liebross: Yeah. It's interesting that it's like so easy to do and easy not to do. But here's another thing that I get, “Okay, well, I mean, I have a CPA, I have an accountant that does the taxes but do I need a bookkeeper? I mean, the bookkeeper just seems to be giving me a report or just making sure I get paid. They're not giving me anything else. Should they be giving you anything else?” I'm curious how you get to that one too.

Ciara Stockeland: Yeah. They won't and I don't really think they should, that's not their job. A bookkeeper’s jobs to tidy up your information and deliver it in a super easy-to-read package. That's it. Bookkeepers are rearview mirror people and that's how they're wired. That's how they're created. They enter data, they put it together, they give it to you. You will rarely, if ever, find a bookkeeper or an accountant that’s a strategic thinker.

Andrea Liebross: That's not what they do.

Ciara Stockeland: Yeah. Having someone that's a profit strategist, which is what I do, that says, “Okay, now we have the financials, what do we do with these numbers? How do we forward think like, okay, that happened last month, what does that mean now for this month?” You can’t expect a bookkeeper to do that. If you don't know how to create strategy from your numbers, you need to hire someone that can help you with strategy.

Andrea Liebross: Right. That's exactly what I say too. But you gotta get the books cleaned up before you can even think about the strategy. You've got to get those books cleaned up. You have to get yourself in that routine of looking at them, and then okay, now we can move forward. Now we can make some progress.

Ciara Stockeland: In my program, I have people enter numbers. We benchmark together which is pretty unique. One of my clients just was not entering her numbers. We do it every Monday and she'd say, “Oh, I’m going to do it. Yes, Ciara, I see,” and never do it. Finally, I was like, “Why are you not doing this? It's part of the program. I want to understand why.” She's like, “I just don't like what they say. I don't want to enter them because I don’t want to look at them.”

I said, “Here's the thing, whether you look at them or not, they're still the same. We can look at them, and we can fix it, or we can avoid it, and we can pay the consequences. The numbers are the same whether you look at them or not, you need to look at them, and just hit that head on.”

I think there's something to the routine, people have to really want the end result. If they don't want it, they're always going to avoid it. There's always going to be an excuse and we're always going to fall into a routine. You have to want the result bad enough to do the work.

Andrea Liebross: Yeah. I do some talking around being committed versus being interested. It's like the person got to you, whoever this person is, they're interested in this, but are they committed to it? There's the difference. I think that is a lot of mindset work more than anything else because you've really got to shift, I like to say sort of like turn the dial from interested to committed to create the change, or else it's not going to happen.

Ciara Stockeland: So good. I've never thought of it that way. You know what, that actually answers a question for me because I've wondered, I work with lots and lots of business owners, and they all get the same information from me. I'm sure the same thing happens with you. Some succeed, and some don't.

I always wonder, “What's the difference?” I think that's part of it. Everyone's interested when they hire me, like they're all interested in having less pain, less debt, more money, but are they committed to doing whatever it takes to actually get there? And some are not. Very interesting.

Andrea Liebross: Yeah. Some are not. Here's the other interesting part. Let's say this person is entering their numbers in. They have the knowledge, the numbers are on the table, A plus B equals C. Knowledge is a whole piece of it, but then you have to have the thinking around being okay with taking some risks, and making decisions.

So there's knowledge and then there's mindset. The piece of that and kind of the mindset has the two parts, I always say like your thoughts and your feelings. She's feeling defeated, sad, angry, whatever, negative. How does she change that? Well, it's not going to change just by looking at the numbers. She's going to change her approach the way she's thinking about things so she can take different actions. That's all, again, another level of moving from interested to committed. That's another step in the process.

Ciara Stockeland: Yeah, so interesting.

Andrea Liebross: Yeah. You can know it all. I’m in, I show up every week, I put my numbers in. Okay, great, so you got the knowledge. Now what? Now you gotta take action, but that action is only going to be driven by what you're thinking. You've got to create that thought that you're all in.

Ciara Stockeland: Yeah. It's interesting. I love talking to you about it because you're so knowledgeable with the whole thinking piece of it like what goes on in our brains, it's so interesting too with doing the Ironman stuff, I was talking to a friend and I was like, “Anybody could do it. It's not that big of a deal to me.” She was like, “Ciara, no, I don't believe that. I do not believe anyone could do it.” I said, “I do. I do believe that. You can hire a coach.”

What she was saying was similar to what you're saying. Anyone could hire the coach, have a training plan, pay the entry fee, but it's the level of “I signed up. I'm going to accomplish this. I believe I will finish.”

Andrea Liebross: Yeah. It's a belief plan. You could give them like what you’re doing, you're giving them the action plan, in a sense, but they also have to have a belief plan. Let's say we get into the place where she's putting her numbers in and you're like, “Okay, so here's what I think needs to happen. We need to not get the forklift, and let's sell what's selling really well, which has the biggest profit margin. It may not be the sexiest of all your options, but it definitely is working, people want it. Let's do more of that.”

Great. But she may not have the belief behind sticking to that plan. That then kind of why doesn't she have the belief? Well, I mean, she's been doing it forever. There are so many competitors out there and it's just not exciting anymore, whatever we want to talk about. But there's a difference. Your friend is right, no, not everybody could do an Ironman but Ciara's doing an Ironman, do they switch that around?

Ciara Stockeland: No. I love it. I'm like, “I am an Ironman. I love this.” Give me the full title.

Andrea Liebross: Right. She's doing an Ironman in Kona in October. We were talking about that before we started recording. But yes, not everybody could do it because not everybody's committed. They can be interested, but they're not committed.

Ciara Stockeland: Very interesting. Well, that was two against one. I was like, “I’ll just disagree with you, Bethany,” that's my friend.

Andrea Liebross: Here's the thing, physically they can probably do that.

Ciara Stockeland: Everybody could do that, right?

Andrea Liebross: Yeah. I mean, barring whatever [inaudible] she can, she could get in shape. She could follow the diet, their nutrition plan of it, the activity plan of it, all that but she could, is she? That’s another story.

Ciara Stockeland: Because there's so much mindset that goes into success in lots of areas in life.

Andrea Liebross: Yeah. I think it's interesting what you do, it's like here is how we create some profit, people.

Ciara Stockeland: Yeah. Then it's the same plan. I use it over and over. It works if you do it.

Andrea Liebross: Right. If you do it. Ding, ding, ding, if you do it, and it’s not going to feel good either probably doing it.

Ciara Stockeland: No.

Andrea Liebross: There's the uncomfortable piece of it. Just like you have to push through when you're ready to be like, “I don't want to run one more mile,” but you have to push through it.

To wrap up, if someone's thinking, “Okay, I want to be more profitable. I don't feel,” I’m going to use the word feel because they're not even looking at their numbers yet, “I don't feel like I'm creating enough profit,” what would you say to them is enough profit? How do they know that they're profitable or not? Because that's another question, kind of almost the starting one, I think, what is profit to you? What does that mean?

Ciara Stockeland: Yeah. I think a starting point would be looking at what you've got going on in your business. Are you taking a paycheck? If you're not, if you've been working for free, then we really don't have enough profit. Let's talk about your paycheck first. If you're like, “Nope, I've been paying myself consistently,” but you have a lot of debt and that's weighing on you, like you're paying so much in interest, it's stressing you out, okay, let's figure out how we can get to a place where the profit can cover that and pay it off.

I take a paycheck, and I don't have any debt but I feel like I'm doing a lot of work for the end result, let's look at your profit again because we want to make sure that you're never stressed out with money issues, that you're paying yourself, you're getting compensated for your time, and that if you feel like you want to grow, if at the end of the day, you're like, “I want to just close up shop and be done,” that you have the freedom to do that.

Those are indicators of profitability. I find that a lot of people like, “I just want to be done. I just want to sell it,” well, it's probably because you're not making money because if you were making money and you were keeping money, would you still want to be done with your business? Thinking about those things is good.

Andrea Liebross: I love the part about okay, you're paying yourself, and so many people are paying themselves but measly little paychecks. They're not motivating. I think that is the place that you have to start. Are you motivated by the money that you're paying yourself in your business? If you're not, then we need to start right there.

Ciara Stockeland: Yeah, for sure.

Andrea Liebross: Alright. Well, this has been super fun. Actually, when you said debt, I was like, we could have a whole episode on what is debt. Because that's a whole other topic. Investing in your business, is that debt? But anyway, we'll save that for next time. How can people find you, you and your business, and you and your Ironman?

Ciara Stockeland: Yeah. If you're on Instagram, that's a great place at @ciarastockeland. On that page, I share Ironman, workout, training, traveling, business, tips, all the things. It's just all me. Then if you go to my website, ciarastockeland.com, you can get connected to me in lots of different ways. There are lots of free resources about money, profitability, inventory management on the website.

Andrea Liebross: Awesome. Now obviously, all will be in the show notes. Thank you for being here. So fun.

Ciara Stockeland: Thanks for chatting, I enjoyed it, and I learned a lot today. So thank you.

Andrea Liebross: You're welcome.

Okay, what did you think of my conversation with Ciara? What were your biggest takeaways? One of my takeaways and the story that sticks with me is the story that she told about the person wanting to invest in the forklift and debating how to get the forklift.

But then her bringing up the great points of you're going to have to get a license to operate the forklift, you're going to have to have space to house the forklift, and all the things that were going to happen stem from making the decision to get a forklift. That was a big takeaway because I see that happening in my business when I decided to write a book, there were so many other things that had to happen in my business as a result of that one decision.

Even though I don't have any inventory, once I make a decision, it actually leads to other decisions, other expenses, and other opportunities also, don't forget that, if I want to do it the way I want to do it. I think it's something great for us to remember that there are tentacles to every decision.

Another thing I want you to take away from this is the benefits of really looking at your profit and loss statements from the bottom up to help you make better decisions, figuring out how you can create and keep more profit from the bottom up. I hope you felt that that was just as valuable as I did.

If you want more of Ciara, and who wouldn't? You can find all the links to her book, podcast, or website in the show notes. I hope that we do have her back on the podcast because I think she has a wealth of knowledge. She’s just a cool person too. Alright, my friends. Remember, creating profit and keeping more cash is the way to level up. So why not embrace it, explore it, and do it? Now is the best time. There's no better time. It is your time to level up. I will see you next week.

Hey, listening to podcasts is great. But you also have to do something to kick your business up a notch. You need to take some action, right? So go to andreaslinks.com and take the quiz. I guarantee you'll walk away knowing exactly what your next best step is to level up.