Discussing Financial Literacy and Entrepreneurship
Updated: Jun 27, 2022
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Christopher H. Loo, MD-PhD: So today, we have Tracey Bissett, and Tracey has a very accomplished bio. She's on a mission to redefine the world's economic future by increasing the financial literacy of entrepreneurs, also known as financial fitness. And with over 20 years of experience in the financial services industry, Tracey helps entrepreneurs across all industries, on and offline. She's the Chief Financial Fitness Trainer of Bissett Financial Fitness, and educates and empowers entrepreneurs to take control of and live their financial lives with confidence.
She was a former executive at TD Bank. And she's worked with thousands of entrepreneurs to secure financing that they needed. This hands-on experience, coupled with her formal financial education, an MBA and CFA designation, position Tracey uniquely to coach people all things about money. In addition, she's a professor at Centennial College School of Business and she regularly leads speaking engagements to increase financial fitness awareness. She also gives back to the community and volunteers with Therapeutic Paws of Canada, United Way, and Junior Achievement of Central Ontario. So, Tracey, what an awesome bio. And welcome.
Tracey Bissett, CFA: Thank you so much. Really a pleasure to be here, Christopher.
Christopher H. Loo, MD-PhD: Yeah, we were backstage talking. And it was great to finally connect and get you on the show. So, I know we're gonna talk about finances, financial resiliency. So tell us all about your journey, how you got started, and we'll go from there.
Tracey Bissett, CFA: Absolutely. So as you said, I am based in Canada. So I'm in Toronto, Ontario, in Canada. But I actually grew up on the East Coast, in Nova Scotia. So kind of on that Eastern Seaboard. And ever since I was a little kid, I've absolutely loved money. We form our views around money when we're five to seven years of age. And when I was seven, I wanted to go to the corner store every day. And so I went to my mom on the first day of summer vacation, and I asked her if I had some money, and she gave me a quarter to go get them some treats at the store. And then I went back on Tuesday. And she said no Tracey, you've had your money for the week. And we have money, but not for that. So I was very determined to figure out a way to get back to that corner store every day.
So with my friend, we brainstormed different ways to make money. We would have little classes and lessons. We would get kids to come and then pay to come to our lessons, whether it be tennis lessons, or something else. We made a neighborhood newspaper, we had little yard sales or lemonade stands, we did pretty much everything. And so I realized at a really young age, that money could help you do things and get things that you wanted. And so my dad was a banker, as well. And so we had lots of money talks in my house. And it was a very unemotional thing. So fast forward, when I was in my teens, I started a business looking after people's homes, which was fun to bring in some extra money. I babysit like most kids. And I was involved with Junior Achievement, which helps you really understand the way companies work. And I was the top salesperson for a few years with some really bad products. So I went on to business school, and I thought, oh, I'll just do that. And then I'll go work in an organization.
So I ended up in banking. And I thought that would last just a couple years. Fast forward, 15 years went by. And it was such a great opportunity to see lots of different parts of Canada and work with so many great people, clients and colleagues alike. And then my seat was taken away from the table as happens in big organizations. And so instead of going back to a role that was very similar, and another financial institution, I decided to package up all the things that I liked to do, and one of them primarily being helping people understand money. Whether it be in their businesses, or in their personal lives, because I know that that's really the key to becoming successful on your terms is when you got your money mastered. And so to really break things down into simple ways, and help the most people that I could, I decided to make my business all around that financial fitness that you talked about.
Christopher H. Loo, MD-PhD: That's so awesome. And what's interesting is that a lot of people don't realize that having a job doesn't really guarantee you security. But what's fascinating is that a lot of people are very successful and then have really great jobs, but it's really they still have to depend on that job. And you notice that early and then find the way to leverage your talent and skill and now you're in control of your own finances in your own destiny.
Tracey Bissett, CFA: Absolutely. And I get to package of all the things I like to do, because I really like helping others. I really like breaking complex things down into simple parts and making things easy to understand. And so now I get to do that all the time. So that's really fun.
Christopher H. Loo, MD-PhD: Yeah. From your journey, what are some of the biggest mistakes you've seen entrepreneurs make when it comes to their finances?
Tracey Bissett, CFA: So the first one is not taking accountability for the financial side of the business. And most people are experts at whatever their business is in. So for the physicians listening, you're excellent at what you do. But to totally delegate to either a bookkeeper or an accountant or to just bury your head in the sand and think that everything's going to work out. I usually see entrepreneurs fall into one of those two camps. And when you're running a business, it's perfectly normal that you wouldn't have had training. I know our school system in Canada does a really poor job. I think it's the same in the US, of teaching personal finance, let alone teaching how to run a business from the financial side. So I want everybody to know it's okay if you don't know how to do it. But you're hearing me say that You've got to be accountable. And that's the number one thing that I see is people either delegating or just hoping that it's all going to work out. So you have to take accountability.
The second one I see is kind of commingling all the business and the personal stuff together. And that can make a real mess of things. And then it's very hard to figure out and so then you don't know if my business is not doing well, is my personal life using too many resources? And it makes it really messy. So, try to keep those separate.
And the third one I see is not getting access to credit soon enough. And so as soon as you start your business, I think it's really important to go out and establish either a small line of credit or overdraft, certainly get a credit card in place for the business name, and don't just do everything in your personal name. Start the clock on your credit history, just like you have on your personal side, but start that clock when you start your business.
Christopher H. Loo, MD-PhD: What's interesting is, school teaches us to just get an education, degree, and get a job, and that's still advice that was really pertinent in the industrial age. There's still applicability in the information age, but we now really need to teach financial literacy, things such as student loan debt, and assets and liabilities. And what is the difference between the two? And so, I think that's some of the shortcomings of our education.
For a lot of physicians they're great at their patient care. But a lot of them, their personal finances are [not great] and they don't kind of understand, and they're not very financially savvy. So for physicians, how do you understand your financial position, assess ongoing costs and profits and start making real money from the business?
Tracey Bissett, CFA: Yeah, and so it does require some further education. And so whether you take a course, whether you work with a financial coach like me, it's really number one, understanding the way financial statements work, that's really important. So most business owners know the profit and loss. So the income statement shows all of the revenue and expenses. Very few look at the balance sheet, which shows all of the things that you own a value in the company, and then all of the people you owe money to. But then the next key is to really understand cash flow. So when do you have to pay money out? When does the money come in to you? That timing that it happens is all of the magic. And so being able to start forecasting, cash flow, because especially if you're building a brand new practice, and you're just getting things going, it's going to take some time for you to get lots of patients and, and kind of word of mouth to spread. And so you might have a lot more expenses at the beginning before all that revenue starts coming in. So how are you going to bridge those timing differences? And so understanding not only just the traditional accounting, finance, but also the cash flow impact is really key. And it's kind of like building a house, I like to tell people. you want to start, first step, you're gonna keep building on, you're going to build up the bricks of the house. And so it's like building a really strong foundation. And it's not something you're going to learn overnight in one day, it's going to be through repeated practice and routine, like learning a language. So you want to make sure that you've got some time in your schedule built out to spend on the financial side of the business.
Christopher H. Loo, MD-PhD: Yeah, such those are some great pointers. And then you talked a little about how you help physicians understand financial literacy. Tell us more about what you do and how you can help others?
Tracey Bissett, CFA: Absolutely. So I work with business owners in one of two ways, either kind of a one on one coaching program or through a group online live program. In one-on-one coaching, I start by doing an assessment of their historical financial performance, and show them kind of what their statements are, what they mean, and compare them as well to industry benchmarks, because certainly within practices in different specialties, there's different benchmarks on the financial side. They're all kind of in the same range, but some of them show up differently. And so we want to see first, objectively, how does somebody who's looking at the business evaluate it?
And then we really want to dive in and start working with the numbers and I work with business owners to create a cash flow forecast. We talk through all of that money coming in and that money coming out the timing that it's going to happen. From there, we build out a dashboard so that you can monitor key performance indicators on the financial side. Kind of like doing a diagnostic on the financials, like a physician may be doing with someone's health, and so that you can watch those bright light metrics and make sure that things are trending the way you want. And if they're not, you can actually take action pretty quickly. And then the third big piece of that is actually digging into pricing. Especially if you're doing additional services where maybe things are not as regulated or you have a little bit more flexibility.
The business owners that I work with revenues are typically under $2 million. I work with people across all industries. Certainly, I've worked with a lot of health care providers. And pricing is one of the issues that people don't realize that they're not charging enough, and they don't see the correlation between the prices they charge and the low profitability. So we want to really get clear on that. And then kind of wrap it all up and together. And so the one on one gives a great opportunity to actually be inside their business and to answer any questions they have and for me to share any recommendations that I have, in my 20 plus years experience, working with business owners.
Christopher H. Loo, MD-PhD: I think, these days and age, all physicians are high, everybody should have a mentor and a coach. And even the top people in their fields have mentors and coaches. And a lot of physicians don't understand financial statements, like when they're applying for things like a business loan or line of credit, how do they discover what lenders actually care about?
Tracey Bissett, CFA: Yeah, that's really important. So firstly, you want to get comfortable with your own financial statements, so that you understand them and your cash flow cycle so that you know and can run your business and design the strategy to hit all of your goals. But then you certainly want to have a sense when you're going to apply for that credit, like I talked about what they're going to be looking for. And so a lot of times new positions, they may be meeting loans to do leaseholds and to get the new space that they're renting, or owning, up to speed. And have it all set up so it's ready for patients to come in, it could be actually buying a building. So that's another form of financing we typically see.
And then probably some kind of operating credit to bridge those timing differences. And so if a lender is going to lend you money that you need to pay back kind of on a monthly payment that might be for one of those leasehold improvement loans to get the premises ready, it could be for a mortgage for the building they may be buying, they're going to be looking to make sure if they've got historical results, could you historically make the payments to pay this loan back? They're going to be looking at how much of this business is financed with debt versus equity. And so certainly, as we know in our personal lives, too, I don't believe debt is good or bad. It's all in how you use it.
And debt can be used to help us achieve our financial goals. But if we get too much debt, all of a sudden, we can't make those principal and interest payments. And so they're looking at that debt to equity level. They're also going to look at, what's the plan for the business, what's the strategy? And having confidence that the management knows how to manage their cash flow, and that they're gonna stay focused on what their goals are. So lenders will be looking for probably a projected sales and expense forecast, as well as a projected cash flow statement. So it's always nice to have kind of a bird's eye view into what they're thinking about. So that when you go in and talk to them, or you're, you're doing it on the phone or online, you're able to convey what it is that your practice is going to do, and how you're going to be successful and why you're deserving of those funds, using the same kind of language and metrics that they are looking at.
Christopher H. Loo, MD-PhD: Yeah, there's a lot of details that I think a lot of physicians and others listening to this podcast could go to you and benefit from your wisdom and advice. Because you know learning how to read a financial statement is like learning how to read a book and you have to know what to look for. In your field, what do you see that most entrepreneurs do right with their money that they may not realize and give themselves credit for?
Tracey Bissett, CFA: Yeah, so I usually ask business owners, how long have you been in business once I meet them. And so if anyone's been in business over six months, because I work with people who've been in business for one year or five years, 20 years, it's never too late to learn about the financial side. If they've been in business for more than four or five months, I'll tell them that they know how to manage cash flow, and really applaud them and ask them to give themselves a pat on the back. And they'll say to me, Well, no, I don't know how to do that. But the sheer fact that they are still in business that they've been making it work, they may not be doing it efficiently, they may not use strategies that I would use or or talk about it in the same way. But the sheer fact that you've been able to keep your business running tells me that you do know how to manage cash flow.
And so we can start from that strength and that positivity and build on that to go from there. And so if you're in business for a while, it might have been a struggle. But the mere fact that you are in business still tells me that you know how to manage cash flow. So for everybody listening, give yourselves a pat on the back. Because it's hard to do, it can leave you with some sleepless nights, especially if you've got a team that you're trying to make sure you have payroll ready on time, then if you've got rent payments, there's some real obligations that come. So being able to juggle all that and keep it going is really a good accomplishment.
Christopher H. Loo, MD-PhD: Yeah, that's, that's all. Wow. And lastly, what do you do in your field? What do you see as entrepreneurs needing to be accountable for?
Tracey Bissett, CFA: So as I said, the financial side of the business. And so that's when you're developing your strategy, make sure you're incorporating financial goals as well, that you're spending time on a regular basis reviewing your financial results, and you're planning for the future, it's not sufficient to just look at your historical financial statements when you do them with your accountant once a year. Ideally, you're going to set some time aside minimum once a month, but I think doing it weekly actually makes it a little bit easier. And I'm not talking about spending hours and hours every week, let's put aside a half an hour a week to spend on the financial side of our business, and really take control of that. And when we have confidence there, we're going to see that kind of permeate through the business and through our life.
When things are not going well financially, our health can be impacted mentally and physically, it impacts our relationships, it also can impact on the way we deal with our clients and our patients. Because if we've got half of our mind focused on our money troubles, because we either don't know what's going on, or we're really stressed, we're not going to be able to do the best job that we can do. And in the case of helping people, we want to make sure we give them our 100% attention. So highly recommend stepping up that accountability, and then carving out some dedicated time in your calendar. And remember, you don't need to do it alone, you certainly can work with a financial planner and an advisor or coach, whoever is going to help you. And oftentimes, it's just to get things started. And you're going to be able to maintain that. Versus, for other people, they may want to work with someone ongoing. So you're gonna know what's the right way for you to be able to keep everything straight, and for you to stay on top of it and be accountable.
Christopher H. Loo, MD-PhD: That's such a fantastic episode. I think you have a lot of experience and knowledge in the financial services industry. And a lot about financial statements and kind of the nuts and bolts. So I think a lot to all the listeners out there listening to this, be sure to check out Tracey in all of her work and her material. So people are, Tracey, how do people get in contact with you and get in touch with you?
Tracey Bissett, CFA: So I'd love to leave a gift for everybody, because I've just talked about the importance of working on the financial side of your business regularly. So I have a money meeting agenda that you can use to help you with those meetings that you're doing. Whether it's with yourself or with business partners that you may have. And so you can head over to CashCoach.biz and download that. And that will help you get started. Your first meeting might even be just looking at that agenda. So cash coach dot biz downloaded that money meeting agenda. The best way to reach me is on LinkedIn.
Christopher H. Loo, MD-PhD: Yes, we'll put all the links in the show notes. And so we really enjoyed our time having you on the podcast. Any last minute words of wisdom parting advice before we call it a day?
Tracey Bissett, CFA: To be kind to yourself, financial fitness is a lifelong journey just like physical fitness. And so we want to take small, imperfect actions every day, we want to be kind if we make mistakes, and just stick with it, you're going to be your biggest champion of your business. And you want the financial side to run really smoothly. And you're going to see that kind of harmony then spread across your life. So take one one action every day. Be kind if you make a misstep and have some fun, because we're all learning and I certainly know how to learn new things every single week. So don't be worried that you don't know everything. Just be kind to yourself and get started today.
Christopher H. Loo, MD-PhD: Such powerful words of advice in these times. So thanks so much. And we look forward to having you on the podcast as a future guest.
Tracey Bissett, CFA: Thank you so much. It's been my pleasure.
Christopher H. Loo, MD-PhD: Many thanks again for being here. If you’re new, you can find me online at Christopher H. Loo, MD-PhD, where I have links to other episodes or links to online resources that will support you on your financial literacy journey. I’ll see you there in on next week’s show. While I bring you thoroughly vetted information on this show regarding a variety of financial topics, I cannot promise you a one size fits all solution. This is why I caution you to continue to learn. Educate yourself and seek professional advice unique to your situation. If you want to talk to me, I welcome it. Please reach out via my website or email at Chris@drchrisloomdphd.com. I read and personally respond to all of my emails. Talk soon!
Editor's note: This transcript has been edited for brevity and clarity.