Cash Flow Q&A: Dryrun as a Money Maker vs. Money Saver

Posted 01 September by Blaine Bertsch in Accounting, Bookkeeping, Cash Flow, Entrepreneur, Small Business, Videos

Barb and Blaine discuss the difference between the two concepts. Users adopt Dryrun as a money saving endeavor, then power users and advisors turn it into money making opportunities. Money maker apps are tightly hooked to growth of a company.

Transcription:

Hi Everyone,

Barb Easter, Director of Partnerships with dryrun, here with Blaine Bertsch cofounder of dryrun.

Blaine, I had another question surface recently from our users that talks about whether dryrun is a money saver or a money maker. I think this ties into a recent discussion we had about value.

So, if I could maybe get you just to speak to that for a minute that would be great. Money saver, versus, money maker. In terms of where we are positioned for an app.

Blaine:

Yeah and you know, part of that is just semantics, because at the end of the year it’s money in your pocket.

Barb:

Oh, good point.

Blaine:

So one of the ways to make more money, make your business more profitable is to cut costs. So money saving can be money in your pocket, money maker also puts money in your pocket.

Now, money maker is often a lot more about growth though, right.

Barb:

I think so.

Blaine:

So it’s not just about saving money, it’s about growing the business.

With dryrun, there is two sides to it and usually, you know it depends on the circumstances of the business but to just sort of put it simply, what I see happen most of the time is that it starts out more as a money saver.

Barb:

Hmmm

Blaine:

So, usually what happens is that businesses when they sort of dive into cashflow forecasting unless they have been doing it on a spreadsheet, or something and kind of gutting along and doing it in some way…

Usually they will dive into dryrun because they have these issues of cash going in, cash going out, timing issues where an invoice is late, a bill is due, payroll Friday, maybe a job they have they haven’t reached a phase where they can get sign off and even invoice them, let alone get the invoice in on time.

So, a lot of times when they first dive into dryrun it’s trying to save money by going, ok I’m trying to figure out where these conflicts are happening, I’m avoiding the cashflow crunches, I’m avoiding going to the bank, I’m avoiding getting, you know, putting money on the line of credit, giving discounts to get money in…

There’s all sorts of ways that money just leaks out the bottom of the business.

Because…

And when profit margins are tight, that makes a massive difference.

So, a lot of times early on it feels like it’s money saving, sometimes it’s actually business saving.

You are avoiding that cashflow crunch where you simply don’t have money and you know, we’ve seen it before now you are closing your doors, that’s the reality of it.

But what happens is businesses, once they start to get that under control because it is usually a management issue, not a revenue issue.

It’s not usually revenue, sometimes there is profit issues but that is a longer term issue, usually they do have the business and it’s just getting the cash in.

Businesses go out of business every single day when they are profitable on paper, they have ample revenue on paper, they don’t have the cashflow.

So that’s that number one, but once the business kind of gets that under control, they know when things are coming and going, they are dealing with those short term cashflow shortfall issues, that’s when they start to go, ok now, I’ve got that daily or weekly, panic under control…

I know where we are going, I can see we are going to have some excess cash in the next month or two, that’s when they can start to plan to make more money.

That’s when they are saying, ok, now we can avoid taking in jobs that aren’t as profitable, we can target the jobs that are super profitable, we can deal with capacity issues and make sure that the money…

We are not paying too much out on contractors, we are making the most out of our staff which means we are making it the most profitable.

And…we understand better when to grow and how to grow.

So it goes from money savings but also ass saving, to be completely honest…

Barb:

Yeah…

Blaine:

Through to growing the business identifying opportunity, and making money.

So there tends to be a bit of a transition there.

Barb:

A couple things, so…

One, you are saying that using dryrun actually if you are using it properly you should be using it for different functions, over the course of your span with it, right?

Blaine:

Yes

Barb:

Ok, just wanted to be clear on that, second when you are talking about ass savings, and (laugh) when you are talking about that, so to me if I was going to draw a parallel, if you were in the the water above your head almost drowning up to hear right, and you manage to climb into the life raft.

So it’s like that very short term view, versus, you are up on the raft, you catch your breath, and you can look a little further out toward the horizon.

Blaine:

Yeah, it’s to me, it’s that quickly changing direction, like you are trying to avoid an accident, you just yank the wheel and you slam on the break, you barely miss the car ahead of you versus, ok now that we missed that, now that we’re going down the road, now I look at a map…I can say, I’m going to avoid this traffic jam, I know there’s a shortcut over here, I know if we go this direction I can stop and pick a few things up that I need to be productive, and you move from this near term emergency, dealing with emergencies into a long term efficiency and planning.

Now you still have this near term emergency savings but when you map things out nothing feels quite… it’s not as last minute, you are prepared, even though you are dealing with that stuff on an ongoing basis, it doesn’t feel as hectic because you are giving yourself time to react.

Barb:

Of course, but none of us as drivers, none of us ever completely forget about the brake even if the highway is clear. Right, of course you still have that function where you are ready to just come to a stop if you need to or do a quick turn of the wheel if needed, but basically, you move past that crisis point is what you are saying…

Blaine:

Yeah, in the case of dryrun, I would say don’t try to do both all at once.

Barb:

Good point.

Blaine:

Start with…and you know, which one to start with, I wouldn’t say always start with the near term…

Barb:

Really…

Blaine:

Businesses have money in the bank, sometimes they kind of have that under control, and their big concern coming to dryrun is how do I grow the business, where am I going, how are my sales looking, what does my revenue look like…

Barb:

Ok, I am going to stop you there, because I think that is a great other topic to cover of once you decide that cashflow forecasting and management is what you need, which angle do we approach that from, I’m going to stop you, thank you so much for clarifying and thanks everybody for listening.

Also know that if you need some support, some support surrounding your cashflow, whether you are a business or whether you are a bookkeeper, accountant or CFO, come chat us up at dryrun.com.

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