Business of Craft Season 5 Episode 3 Good Math, Smart Business with Michelle Walker


Welcome to Business of Craft, a show designed to help entrepreneurs with fabric or fiber businesses become more successful. Our guests share best practices and teach effective marketing skills, that help crafty business owners learn to grow and scale. Let’s start crafting a better business together!

My guest today is my colleague Michelle Walker. She’s a Financial Strategist and an Account Manager here at Stitchcraft Marketing who began her artistic endeavor at a young age with painting and sewing, followed by study under award-winning coastal and landscape artist, Rick Delanty, and, post-university, continued experimentation in as many fields as possible, including printmaking, graphic design, woodworking, fashion design, ceramics, and most recently, macrame and weaving. She’s a small business owner of Weaverwalker, an Eco-conscious macrame-focused DIY kit & supplies business on a mission to deliver the meditative experience of macrame to everyone’s home.  In May, Michelle is launching a new mastermind for Stitchcraft Marketing called Good math, Smart Business to help crafty business owners really get a handle on their financial numbers. So, today we’re going to talk about math monsters and her philosophy which we loosely call profit first-ish.

Listen to the Show:

Listen to it on Spotify, iHeartRadio, iTunes, Stitcher, or Google Podcasts.

Thank you for taking the time to listen! If you’re enjoying the show, it’s safe to assume there are others out there like you who would also enjoy the show. Help them find it. Click here to rate and review the show on iTunes.

[2:12] What is a financial strategist for the craft industry and why are your skills pertinent to this discussion today?

[4:50] Can you give us a brief overview of what the Profit First system is so that our listeners have a reference point when we say that term and we also ensure we’re properly crediting Mike Michalowicz, the author of Profit First

[8:50] How does Profit First differ from traditional accounting and financial management methods?

[10:08] We’ve talked about this myth that you have to be good at numbers to be good in business. You should know what to look at and understand some basics but you don’t have to have to be a mathematician to be successful in business, correct?

[12:00] We know from industry research that less than half of all craft businesses- especially retailers are turning a profit, which is much more dismal than other businesses in general. Why do you think our industry is disproportionately unfortunate that way?

[14:00] In the book, Michalowicz talks about the importance of taking profit first. Why is this such a crucial element of the system?

[14:37] Why do you think turning that traditional formula on its head is better for making better financial decisions?

[16:30] In the Profit system, Mike suggests using multiple bank accounts for different purposes. Can you explain how this works and why it’s effective?

[18:08] One of the concepts you’re personally fighting to eradicate is the Math Monster. I think most of us know what that looks like, but tell us what that means to you?

[19:54] Why is having an understanding of cash flow more than “Oh, I have money in the bank so I must be fine”?

[21:40] What are some common mistakes that business owners make when trying to implement your Good Math Smart Business ideas and how can they avoid them?

[24:14] Michalowicz talks about the importance of having a “real revenue” number. Can you explain what this is and why it’s important?

[26:23] Talk to us about ratios. We run the agency according to a formula of labor/ overhead/ profits and I know in the mastermind you’re going to provide guidelines for what those should be for a crafty biz  is that correct?

[28:16] What do you recommend for someone just starting out- say they’re making $250K or less per year. What do those ratios look like?

[30:17] Are there any industries or crafty type business models that might not work well with this approach?

[31:11] How long does it typically take for someone to go from being ignorant about their numbers to turning that ship around and getting to a place where they ARE profitable?

[32:15] Is there anything in Profit First that doesn’t really jive with you- and you might give different advice from a financial strategist perspective?

[33:40] Give us the details about the mastermind. When is it and  how to people get signed up?

[34:15] Once they sign up, what do the 4 weeks look like in terms of lessons and practical takeaways.