There is a big difference between revenue and profit, and I know that you are working hard to have more money in the bank than just covering expenses.
As a money coach who has helped hundreds of business owners start making profit in their business, tyhe most important thing I have learnt around money energetics and money management is that you can’t just wait until more sales land before you feel like you can profit. Instead, you need to set up the structure and foundations now to build upon.
In other words, start acting like you are already profiting in your business and have the money management behaviours to match.
Here are five ways you can upgrade the way you handle your current business finances that will leave you feeling like you are actually achieving profit and it is making your hard work worth it. These five things shifted me from constantly feeling like I was paying business bills and playing catch up with the tax man, to turning $4K months into a $200K year in 2023.
1. Set up a business savings account and pay into this first
Start creating the profit now before waiting for more sales to occur. Work out a percentage between zero to five per cent (I always recommend this to just get started) from your income that you can transfer to your business savings account first, before anything else.
2. Pay yourself before tax
You are more important than the tax man. You still must take responsibility and put aside for tax, but you must prioritise yourself and pay yourself first. Whether it is into your business savings or if you are also paying yourself a wage.
3. Mindset matters
Where many business owners fail is that they see their business revenue as their own income and treat it as such. No matter how much you are making, your business income is separate to you.
4. Have separate accounts
To avoid money leaks, organise every single dollar, so we need to set up separate bank accounts. These are the basic categories you need:
- income account
- business savings
- personal wage/holdings
- tax (and GST if applicable)
- business expenses.
5. Allocate all income
Every cent must have a purpose or you will create unexpected expenses. This is why having separate accounts allows you to track all your incomings and outgoings and then you can see more clearly what money is a profit.
Creating a strong foundation with how you organise and manage your money is key.
As I always like to say, you cannot build your skyscraper from rotten stumps, you need to clean out the mess and lay a solid foundation on which to build and scale.
