We’ve all heard the age-old adage “cash is king.” But exactly how much cash does your business need to survive? In this episode, Audrey Giannini, a Virtual CFO with Summit CPA, and Jody Grunden, Summit CPA CEO, join Jamie Nau to break down key cash flow management metrics and how much cash you should have in the bank.
“If the client knows you're going to reach out every time a payment is due and you do it, there’s no question that it will improve your receivables process.” - Audrey Giannini
The finer details of this episode
Episode resources
Jamie Nau: Welcome to Episode 4. This is going to be a great episode. I'm really excited for this topic. It's one of my favorite metrics, cash. So today I'm joined by Audrey Giannini. She is one of our CFOs, and Jody Grunden, our CEO.
Jamie Nau: So let's jump right into this topic. I'm going to start with you Audrey. So with cash, the reason it’s my favorite metric is because it helps all the other metrics work and flow. So why don’t you start off by telling us how much cash we should have in the bank?
Audrey Giannini: So as it relates to cash, with our digital agency clients, really our recommendation is 10 to 30 percent of revenue. So if you have at least 12 months of history you want to look at the last 12 months of your running revenue, take that multiply it by 10 to 30 percent. There's a there's a logic behind whether you want 10 or you want 30 or somewhere in between. And that's how much cash we'd like to have as an operating reserve and your bank account. There's a number of different accounts that we recommend. We can get into that as well. But as it relates to the amount that's really that's a number that we suggesting: 10 to 30 percent of your trailing revenge.
Jamie Nau: 10 to 30 percent is the starting point. So Jody if you want to go into some of those differences between a 10 percent company and a 30 percent company so that our listeners know where they might fall.
Jody Grunden: Yeah sure. So basically 10 percent equates to about two months’ worth of expenses. So if they say, hey I want to two months’ worth of expenses. The quick math is 10 percent. There's actually a formula you can do to actually come up with the exact number but it equates to about that from majority of our creative agencies 30 percent equates closer to six months. So if you want closer to a 6 month reserve then you want about 30 percent of your revenue. So if you're a million dollar company 30 percent of it would be in cash. When Audrey mentioned your cash reserve that's both your operating cash account and your cash reserve accounts. Those two accounts operating cash account typically you went about to payrolls worth of expenses. Again something very easy to know most owners know how much their weekly payroll is. And so you want two months of that and there are two payroll cycles and the operating account and then the rest of it. Put that in a cash reserve account so that you can earn interest on your money. So it’s not sitting there flat. And then the question always is, you know, how much? Like you mentioned, how much should I keep as a company? And every company obviously is completely different right. So if you're a very well capitalized company that has a ton of cash in the bank, have high recurring revenue, one owner, you've got no clients at over 10 percent, well then you're going to be close to that 10 percent. If you're a client that has multiple owners where, you have, maybe you're in a high growth stage, or maybe you get some retiring partners, or maybe you're going to build a building here soon, or need some cash for some reason, or maybe you think you know the big “R” words coming up here, the big recession words coming up here, well then maybe you need a little bit more money in the bank. Maybe it's more closer to 15 percent or 20 percent. So it really is based on you how much money you have in the bank. And I've got to put it kind of goes through that in chapter 1 of my book it talks a lot about that working capital requirements it goes through each of the different ones which covers exactly what we're talking about there.
Audrey Giannini: One of the things that Jody mentioned that I think is a good thing to dive into because we see it a lot with our clients is client concentration. So we said, you know, if you have a client that's nearing that 10 percent. So what that means is of your total revenue if 10 percent of it is representative of one client or maybe even more than 10 percent; I mean we see a lot of clients that come in and have one huge fish that is 50 percent of their revenue. And if that company is gone tomorrow they are in a lot of trouble. So if that's the case about you, we definitely recommend having closer to the 30 percent just in case that client goes and then the other thing we would say is try to get some other big fish.
Jody Grunden: Yeah, and to add to that. What Audrey is saying, just so everyone is on the same perspective. You know if you've got a big company with many subsidiaries and you're doing jobs for all these different subsidiaries you still that one big company. So if the big company says, hey we're going to cut back well guess what? All the subsidiaries will then cut back as well. So it's not that you've got 10 percent in all these little subsidiaries. its 10 percent in the overall companies. That’s what you have to really be careful of and it happens quite frequently for a lot of different reasons. You know that people will just all of a sudden you know have a great relationship and that relationship goes away. Nothing to do with them. It could be upper management. Upper management changed up management and now they're bringing their people in to do the work. So it could be nothing that you're doing wrong could be a great relationship today but because you have that high client concentration risk you know you really do need more cash in the bank because you need more reactive time because if you don't have that reactive time you start making really bad decisions because you've got to make them right now. Whereas if you have cash it delays that process. You've got an opportunity to think through it really use strategy. Think of all the consequences, really go through all the scenarios and then make a decision which is much more beneficial much more profitable obviously for a company that would lose a client like that or take a risk.
Jamie Nau: Yeah. It's great you mentioned reactive Jody. I think that's definitely part of the cash reserve and I do think that having that leverage not well, it has hurt a lot of clients. Because that one project dropped through and they don't have cash in the bank. And before we know it like we're drawing on the line of credit, we're trying to figure out if we can make payroll or not. So I think reactive is a great part of cash reserve, but there's also the proactive part of it. And I think that's really important.
So one of the things I always think about is, how aggressive are we going to be as a business? So if my owners want to take a lot of risk and they want to try a lot of different things then I want to have more cash in the bank because sometimes those risks work out and it really accelerates the company forward but sometimes it won't work out and I don't want it to bankrupt the company. That's part of it too. So I think that that is key.
Jody Grunden: Yeah. Like one of the big risk you talk about is a business development person that comes available and you may be thinking, hey this is a good time to transition out as an owner and hire that business development person if you're low on cash. We're going to tell you nine times out 10 you can't take that risk. That's not a risk you take. If you've got to keep your cash flush you've got 10 percent 15 percent or the owner says absolutely take that risk. It doesn't work out. You can you can let that person go down the road it's not going to cause you a lot of turmoil inside the company or its not going to put your company at risk because again cash alleviates risk for hopefully big risk.
Jamie Nau: Also I think on top of that like all the other metrics we're going to talk about in this podcast and we're going to go through a lot often times they don't really matter that much if you don't have cash in the bank because you can't really read them. I can tell you the changes you need to make but you don't have the time to make the changes because the cash is so short. So I think that they really do work together. So another important part of cash is monitoring your cash.
Jamie Nau: So one of the things that Summit does a lot is cash flow. We look at cash flow. We look at short term cash flow object. Audrey can you talk a little bit about that process and how our listeners can do that for themselves and really dig into knowing what cash is going to look like in the future?
Audrey Giannini: So the way that we do it is we basically every single week we will look at both your payables and your receivables to see what bill do you have coming due. When they are due. With your receivables, same scenario when you're going to get paid by your customers. And it may not always be the due date. I mean maybe you know that a customer always pays late so you don't want to necessarily assume it’s coming on the due date if you know they always pay 30 days later. So that kind of helps you understand where your cash is coming in and out. And then we really try to look at the balance over, I would say in general we look at it over the next like three months but really over the next six to eight weeks is when you have a really good idea of where your cash is coming from. And then you'll want to look at consistent payments. So any bills that you pay, whether it be every week, every other week, every single month. Go ahead and prepare for those and know when they're going to be coming out and try to set up a schedule to understand what your cash balance is going to be over the next six or so weeks. And if there's anything that you need to do if you see a dip in cash and you understand that's coming, maybe you reach out to that customer that always pay 30 days late and you asking to pay early or maybe you cut back on some expenses because you can see that the dip is coming. So those are conversations that we try to have with our clients every single week regarding what big payments we have coming up and how to prepare for them.
Jamie Nau: So Jody, Audrey talked a lot about a short term forecast. What do we do for a long term cash forecast? So we can kind of see what's my cash will look like in six months, twelve months, eighteen months from now.
Jody Grunden: So the long term. Again I'm just talking about basically a 13 week, roughly 13 week cash flow forecast and that's going to cover the short term needs. However you need to really extend that like I said over the long term whether it's a year, six months, two years, three years ,you need to really see what your company is going to be cash flow wise over that period. So it's really easy to start or actually I wouldn't say it's easy but a lot of companies put together some sort of budget you know to actually figure out where are we? What do we think we're going to do for next year? You know that type of thing. The problem with just simply a budget is that it's static. You know you're looking at the end of the year and say, oh yeah we're close, you know, high five, or we are way off, you know we won't do that again. You know that type of thing. Whereas what they want to do is they would put together a dynamic forecast. What I mean by dynamic forecast, is a forecast that changes on a regular basis based on circumstances or based on real life stuff. So for instance when we put together that forecast we want to make sure that revenue is based on something tangible not just simply we hope to have 10 percent increase revenue. It's actually, hey here's how many widgets we have to sell here's a service mix that we have to do. And because of this it's going to generate X amount hours in November X amount of dollars in December and then we can line up our expenses accordingly. If we're looking to increase revenue because we know that our pipeline is extremely strong I'm going to say, okay it's time that we actually bump things up a little bit. Well then we know how much that person is going to cost when we bring that person in on the cost side of it. We know how much extra revenue that person is going to generate revenue in your mind. It's really important to have that really solid forecast based on real life information. And again that's important. It changes every time. So once you've got the revenue side figured out putting in the expenses is fairly easy. A lot of times you have those you know when they're going to hit and that's important to actually plan ahead. Again according to what they're going to have as opposed to spreading payments out over the entire year type of thing evenly. That never happens obviously so you have to kind of plan a little bit there and so you'll know what your bottom line is. The bottom line is really only there for tax purposes or how much, you know, what we're looking at the bottom line to see hey how much we pay for tax. Well the flip side of the financial statement is the balance sheet which is the most important thing to look at because that's going to tell you where you're at any particular point in time and subsequently your cash balances in each of those some simple months. If you do your forecasting correctly you should know exactly how much cash you're going to have in November. You know in December that, hey you're going to be negative cash meaning that you borrowed on your line of credit because of circumstances and then, you know, January are going to rebound because you've got all these deposits committed or whatever that might be. So it’s important to understand that cash flow going out at least on a 12 month basis if not a lot longer than that. With IRAs we're kind of crazy with ours obviously being a CFO as we have ours out 10 years so that kind of gives you an idea of where we're at they're based on stuff. And it's kind of fun seeing how each month actually changes you know what the outlook is going to be. You know we have really crappy month last month because we lost a few clients or whatever. You know we see all that's going negatively impact cash you know in December but not bad enough to where it's going to really dip into being below our reserving our shot like that, or we had a really outstanding month. We picked up six brand new clients. How could that impact things? Well we now we need to look to hire in so doing so that we can kind of see kind of plot that out and see OK, based on that you know when can we hire that person? When’s the best strategic way? Do we stagger the two people that we need to hire both at the same time, you know what's the best scenario? So it's important, that really outward looking forward looking forecast to be put in play. And you know it really goes alongside this the short term cash you have the short term cash and you also need to have that long term cash flow.
Jamie Nau: I think a lot of companies budget. A lot of companies build their budget for the year. I'd say about half of those companies forecast and a lot of companies forecast and then even less actually forecast the balance sheet. And so I think that's the important thing that Jody is talking about is okay, it's great to know what you P and L is going to look like but what does my cash going to look like? Especially when you're planning for something. You want to buy a building, you want to hire a biz dev person. Like when can you do that? Forecasting the balance sheet is a key part of that because we want to have that cash reserve in place before we do that. And so you know six months from now if everything goes as planned I can actually make that purchase and so I think it is important thing for a lot of people to think about is forecasting that balance sheet for sure.
Jamie Nau: So Audrey when you're talking about the short term cash flow you talked about three inputs. You talked about the accounts receivable. You talked about the accounts payable and you talked about the recurring expenses and so recurring expenses and accounts payable not a lot you can do on those you need to pay your vendors late but a lot of times that's not a great things. Let's talk about the one you can impact the most, accounts receivable. This is a very common question among all the clients that we work. How do I get collections a little bit quicker. So what tips can you give our listeners for that?
Audrey Giannini: Yeah actually it's a very timely for me I just had a meeting with a client to talk through there very large receivables balance and collections and what we can do to make it better and the number one word I would say is consistency. So when you have a new client come in you want to set up a plan with them. Tell them what to expect as it relates to your receivables process. Tell them we’re going to send out an invoice are our net payment day let’s say is seven days. Three days before the payments due we're going to be reaching out to you. The day after the payment is due and we haven't heard from you we're going to reach out to you again, and not only tell them what you're going to do but then actually do it. If the client knows that every single time you're going to be reaching out the day after the payment was supposed to be due and they hear from you every single time they're much more likely to pay for it, to go ahead and pay on time, because they don't want to get that phone call. Nobody wants to have that conversation. So they know consistently you're going to do that every single time. There's no question it will better your receivables process. It's a pain but it's absolutely worth it.
Jody Grunden: Yeah to add that. It’s kind of funny I just spoke with a client yesterday that their admin person has been gone for four weeks and they haven't been invoicing at all and they didn't think about it. So now their cash is going to definitely dry up because you know you're taking 30 days of invoicing out of that whole mixture that is really going to hurt cash.
Jamie Nau: If I had a dollar for every client I talked to that said, oh yeah we have penalties but we've never enforced them. Like I wouldn't be doing this podcast right now, because that happens so often. They have penalties in place but never enforce them so that's one of the things that you can enforce. And the other thing you can enforce is stop work, right? You don't want to do that because obviously it impairs the relationship but it is some leverage you have on your customers. They want you there for a reason they're trying to get something developed. They're trying to do some SEO work or whatever it is, and if you say, hey if you don't pay us within five days of that due date then we're going to stop work. So that that's the two things that you do have in your toolbox that the clients do care about. So one of the things that's to Audrey's point is to make sure you do them. The worst time to start doing them is when you need cash. Because like I've been working with a customer for 12 months now and I've never enforced them and now I need cash I'm going to start enforcing them. First, they're going to know you need cash, and second, it's going to really hurt your relationship. So I think that was a great point
Jody Grunden: And I would say if you're going to do that where you are going to pause make sure that you tell that at the very beginning when you're actually negotiating the contract. Don't let that be a surprise to them. So if you're going to do that and it's going to be your thing which I completely agree with Jamie on that, I would say, just to let you know if we get lack of payment five days for any reason and we've got to require to stop until we do get caught back up. And just so they know upfront and then give them a warning. Don't just two days later if it's five days that's a that's a pretty small window but let's say it's 15 days you know five days and just a quick warning to accounts payable whatever you know. So that again they're not shocked or surprised but they're well informed and then it's not a big deal at all. They understand. It's business to business
Audrey Giannini: And then similar to what Jamie said about the interest and penalties if you're going to say upfront you're going to stop doing work you've got to actually stop doing work. Whatever your word is. I guess whatever you are warning them of you’ve got to actually do it in order for it to have any impact on your receivable.
Jamie Nau: And I think the other thing too that that's key in this area is know who you're talking to. A lot of times you know you're just talking to an AP department and they don't they really care about the project, but if you actually tie it to that person you talk to the head of the technology department whoever you're working with and say, hey your AP department's been late paying us every month, they will go in there and they'll have that relationship and they'll go talk to him and say you know, we need to start paying these guys quicker this project super important for our business. A lot of times AP people don’t even know the name of the project you're doing, you're just a name on the invoice. So having your PM talk to those peoples is really important and helpful as well.
Jody Grunden: One of the creative agencies, we speak all over the place, one of the creative agencies had mentioned, during one of the different sessions, that as soon as they get the job secure they go and actually introduce themselves to the AP department. So they introduce themselves there put a name and a face you know together and then maybe every once in a while they will send them something like a box of cookies or whatever as a, hey thank you for everything. Just again so that they know who you are versus just simply a number on a page. So you know a little thing like that goes a long way and especially if it's a bigger client where the dollars are really big, obviously went from a small client but a bigger client definitely take advantage of something like that.
Jamie Nau: So we talked about penalties. Let's talk about the flip side. What about incentives? This is a very common question I think we get almost every time we speak, is what type of incentives or early pay do you see out there Jody and what would you recommend?
Jody Grunden: Typically one of the enterprise clients if you offer them incentive to pay like let's say it's once percent for 15 days they're required to take it. So they're required to take any type of incentive so don't hesitate to offer that incentive. But think about that beginning make sure you build that at your price that you're not just simply giving away your profit. One percent's pretty typical, 15 days. Some of the clients will, you know, you can negotiate that. So the biggest thing with incentives is knowing really what AR days are really doing to your cash flow. You know the longer terms that you agree upon that means your being the bank for that amount of time. So be ready because that's going to zap your cash or build your line of credit. So the shorter period of cash, shorter a period of accounts receivable like 15 days or twenty five days or maybe even 40 days is more realistic. But keep in mind you are still floating that money. So discounts are really important to bringing that down and it's where you can actually get cash without actually having to increase prices or cut costs rethinking just simply accelerating that process just making sure that you're there. So I'd say the biggest I'd say one percent is pretty typical for a 15 day. I mean Jamie have you seen anything else Audrey have you seen?
Jamie Nau: Yeah I think one percent. I've also seen it goes lowest 10 days you know of 10:1 I’ve seen a lot of customers take that as well. So I mean start low, see what kind of negotiations you can get. I wouldn't go much higher than 2 percent for sure depending on again evaluate the profit, evaluate what type of team you have on it if you're using your most expensive team obviously you'd want to be a little bit less there if it's a cheap team or you're using you know contractors or whatnot you have to evaluate that. That's all part of the evaluation for sure.
Jody Grunden: Yeah and I'd also say any kind of reoccurring revenue, set that up so its automatically taken out. So that's you know every Monday or the first Monday of the month or whatever the date is because it's if a specific dollar amount that's coming out there's ways that you can set up to automate, zap the clients account for that recurring revenue amount. Why send an invoice out way for payment. Just build that into your contract. That's just really part of what you do and you'll be surprised how many clients have no pushback at all.
Jamie Nau: Definitely. So you mentioned the word line of credit Jody. Audrey I'd like you to dig a little bit into that. So obviously we recommend line of credits for all of our clients but what's the size the line of credit? What's that process of getting that secured?
Audrey Giannini: The purpose for a line of a credit. There’s a couple of different suggestions we have so for the amount we always suggest having the same percentage that we have in your cash reserve. So that 10 to 30 percent, whatever percentage we decide on that's how much we want to have for your line of credit when you get it. When you get it? This is a big one. Get it when you don't need it. Similar to you know receivables don't go knocking on people's doors when you need the cash. Go ahead and try to get the line of credit when things are looking good, you're feeling healthy ,and you're not at a place or you're dying for cash. So just go ahead and have that set in place. That is really the basics
Jody Grunden: To add to that. If you’re really thinking the “R” word is coming here soon maybe it's time to get that line of credit today when banking relationships are solid versus during a recession when it can be really hard to get that line of credit even established. And so really important. The other thing is that why not get a two year renewal instead of a one year renewal. Talk to the bank and say, hey I'd like to get a two year renewal. What that means is that it gets renewed every two years not every 1 year which makes it even nicer. So if you do have that recession coming up or whatever, or that big issue where you may have a downturn in cash for whatever reason, you know, you have that available and it's not going to really hamper your ability to actually continue with business. So get a one or two year renewal definitely preferable. And like Audrey said if it's 10 percent that you need cash the line of credit should be about 10 percent. But you know if you can only get 5 percent that's better than nothing. So it's not a do or die thing where you need to have that 10 percent, would be nice to. You really want to use your cash reserve as your line of credit for the most part. You know that's the that's the key there. That extra five or 10 percent that you have in your line of credit is only there in the event that you absolutely have a huge emergency we have to actually use utilize it.
Audrey Giannini: And Jody kind of already clarified that. But one of the questions we got the last time we spoke was, does a line of credit count as cash? And the answer really for our purposes is no, it's you know a line of credit when you pull on it, it's a liability. It's not an asset for you. So that is something to take into account. Now you have a line of credit, it doesn't necessarily count towards that initial 10 to 30 percent chunk of cash that we want.
Jamie Nau: Yeah definitely. It's different urgencies. I think it's the biggest thing is a lot of people will take that line of credit and use it as a loan and will have a drawn on all the time. You know really it's your second emergency. Your cash reserve is your first emergency fund and then your line of credit is your second. So it's really important to use it as such and not to take that high interest all the time, that can be really expensive.
Jamie Nau: So one thing we haven't talked about yet Jody, we have just a couple minutes here and I want to make sure we touch on it is tax reserve. So can you talk a little bit about tax reserve and, why it's important, and how we calculate that?
Jody Grunden: Sure absolutely. So everything we talked about was cash and you know, how much money you have in the bank, that 10 percent. Well that's assuming that you've got your taxes met. So don't include the money that you're setting aside for taxes as part of that 10 percent. You need an additional amount. But we typically put that into a separate bank account. The reason why we do it is because it's out of sight out of mind. If it's in your operating account you're looking at it all the time and it's really hard to use it or it's really easy to use it for something else. And so when it's in its own separate account it's kind of set aside you know hey this is for Uncle Sam, we're going to go ahead and actually send this to Uncle Sam throughout the throughout the year. And so it's a kind of a separate complete account. Typically how you calculate how much money you need in that account is basically two different things you need to know your last year's taxes what you're assuming your pass through entity you would need to know exactly how much estimated payments are required by the IRS. So if the IRS says, hey your required to make four equal payments. let's say fifty thousand dollars, well then you need to know over a period of one year you're going to have to make sure you funnel thousands of dollars to that account. And the other thing you need to know is your forecast because if you're actually growing in net income growing your revenue over the prior year. Well that's not going to be enough money at the end of the year you're going to have a big chunk of money you're going to pay in April. And a lot of people confuse the fact that they're making estimated payments. They think all their taxes are all taken care of. When in reality it's just the taxes they're keeping take care to avoid paying a penalty. And that's really it. And so knowing what your forecast is in advance is super important. So what you do is you take your forecasts, the net income the bottom number there which is typically for an agency between 15 and 20 percent somewhere in that ballpark of your total revenue. And so you're taking that number and let's say it's four hundred thousand dollars. And so you would take 40 percent of that four hundred thousand dollars and that's what we're going to estimate. We're going to assume that you're going to pay in taxes at the end of the year. 40 percent say a good number. It may be high for a lot of people because of the new tax laws lowered that tax burden for the majority of folks on this conversation. And then also you need to make sure you include your state taxes on top of that. So 40 percent can typically cover it maybe a little bit too much. So 40 percent of that goes in there. We make sure that we pay the quarterly payments as go, we move money into that tax reserve account on a monthly basis assuming we're going to hit our net income. The money gets zapped every quarter based on the coupons from last year. It builds, builds, builds and the end of the year you should have the amount that you would estimate to pay in April sitting in your bank account. And so that point you get that money set aside there you've already made your quarterly payments and so you're just waiting till April to make that final payment then assuming that everything is on. And the nice thing about the tax reserve account is that you're not sending it to Uncle Sam too quickly because if you send it too quickly you can't get it back. And so as you're going through you're making your monthly pay or monthly moving your monthly payments over to that tax reserve or you're making your quarterly payments to the IRS if in quarter three and you take a downturn well now it can pause maybe making that quarterly payment to the IRS maybe you can cut back a little bit on the tax reserve and make that up towards the end of the year. So there's a lot of things you can do. Please do not send that money to the IRS in advance of based on your estimate or your forecasted numbers. Send it out quarterly base on what's required and make sure that you do hold things back a little bit towards the end if things aren't going as well as they were planning.
Jamie Nau: Great. I think we accomplished a lot in this podcast. I think there was a lot talked about so I can imagine a lot of people listening just scribbling down notes. I think there's a lot of key points to take away. So anything we missed Jody or Audrey that you want to make sure that listeners get hold of on this conversation?
Jody Grunden: You know just cash is king. You've got to make sure that you have cash. Do not drain your accounts just to save money on taxes. That's the stupidest thing in the world. A lot of accounts have mentioned that to people in the past there's tax reasons why you'd want to do that. But not for a healthy business. You want to build cash. Keep cash in the business. You know the taxes are set aside so that everything is taken care of. The only other thing about taxes I didn't mention is that some people say, hey well I'll take care of my taxes personally outside of the company.
If you're the sole owner not a big deal. If you've got multiple owners and you want to make sure that none of your owners get behind on taxes because that could put you in a position again risk your position. You want to do it inside the company not outside. It’s a lot easier to adjust things inside the company to adjust things outside. You've got to say, you know cash call, and say, hey I need everybody to pony up a hundred thousand dollars next week. And good luck on that because I know from owners they may have a pretty good grasp on it but their owners spouses may not. And then then that's another conversation altogether. And so we want to make sure that you if you have more than one owner I recommend highly keeping that tax reserve amount being in paying that out of the business as opposed to paying personally
Jaime Nau: Audrey, any final thoughts on cash?
Audrey Giannini: No that was actually something that I was going to mention as well with taxes. This is it's something that we talk about specifically as it relates to our companies but it's relevant for everyone. Make sure that you personally as well are putting away money as the year goes on. It makes April a lot more enjoyable.
Jamie Nau: Yes definitely I think this has been a great conversation. I think the key to me exactly what Jody said cash is king and we've worked with a lot of businesses between the three of us; the number of businesses very high. And I can tell you there's a wide difference between the companies you work with that have cash and don't have cash. They're able to do so much more. They're able to be more aggressive. They're able to grow a lot quicker. So I'd say getting that cash reserve is the number one thing I would do if you don't have it right now. After listening this podcast I would go and build a budget and say, I need my cash reserve, and when can I get it by? It will change the way you sleep at night. It'll change the way you run your business. So it's huge.