Last week brought a delightful surprise—my third grandchild arrived a week and a half early! Thankfully, my daughter had her hospital bag packed and all the essentials ready, making the unexpected timing manageable.

This experience reminded me: being prepared isn’t just about having a bag ready; it’s about anticipating life’s surprises and planning accordingly.

In 2021, my business faced an unexpected challenge. 

California implemented the ABC test for independent contractors, requiring my 20 teachers to transition into employees.

I delayed the change for about a year—far too long.

Then came the blow: the EDD informed me I owed $22,000 in back employment taxes, payable within 30 days.

As if that wasn’t enough, I was diagnosed with breast cancer, and my favorite car’s transmission failed—all in the same week.

I inquired about payment options, but their “generous” terms included a 9% interest rate.

Here’s the silver lining: I was prepared. 

Thanks to a CFO’s guidance, we had adopted the envelope system, automatically allocating a portion of revenue into the tax account each month.

When the crisis hit, I had exactly $22,000 set aside.

No panic. No loans. No 9% interest payments.

Surgery went well, the car got fixed, and the state was paid on time. Crisis averted.

As business owners, optimism is in our DNA. But optimism alone won’t cover tax surprises or emergencies.

You need clear, proactive cash management.

In this week’s video, I delve into the significance of forward-thinking financial strategies. It’s not just about analyzing your Profit and Loss statement; it’s about setting up systems that safeguard your business against unforeseen challenges.

P.S. Don’t let unexpected expenses catch you off guard. Gain financial clarity with our free CFO Strategic Finance Review, it is FREE this week for our newsletter subscribers.