Want to stress less about money in your business?
If you’re getting plenty of work but you never seem to have any profit…
If you hate looking at your numbers and P&L sheet…
If you don’t know where your money goes each month…
It’s time for a simpler solution.
As a business owner, you need to manage your cash flow, keep a close eye on your expenses, and make sure you have enough revenue to keep the business going.
It’s no surprise you’re feeling stressed!
The good news is, once you have a money management plan in place for your business and get yourself out of feast & famine mode, your cash flow worries will fade away and you can focus on doing what you love in your business – which is why you started it in the first place!
Let’s reduce those stress levels and take control of your finances with a simple system that works smoothly, feels good and puts more cash in your pocket.
The simplest way to manage your money as a business owner is using the principles of Profit First by Mike Michalowicz.
The Profit First system is based on the concept of taking your profit first, rather than leaving it as an afterthought. The basic idea is to set aside a portion of your revenue as profit, and then allocate the remaining funds to expenses.
This approach ensures that you always have profit, which can be used to reinvest in the business or provide a safety net for you in lean times.
Here are 5 simple tips for implementing the Profit First system in your business and reducing your stress levels about money:
Decide on your target profit percentage.
The first step is to determine a target profit percentage for your business. This percentage should be based on your goals and financial situation. Once you have determined your target profit percentage, you can calculate the amount of profit you should set aside from each sale.
Create separate bank accounts.
Next, in addition to your regular Business transaction account, you should create a separate bank account for each of the following:
- Profit
- Tax
- Materials & Subcontractors
- Operating Expenses
- Owner’s Pay
Creating separate bank accounts prevents you from accidentally spending money that should be allocated to a specific area of your business.
Set up automatic transfers.
Don’t rely on your memory! Reduce the risk of forgetting to transfer funds into the correct account by setting up automatic transfers. This is also a great way to save time and effort and free yourself up more.
Review your expenses.
It’s important to review your expenses on a regular basis, this is how you identify areas where you can cut costs.
Are you paying for software subscriptions you forgot you signed up for? Are you paying fees for a service you don’t use? Could you get a better deal by asking?
Reviewing and reducing your expenses is a simpleand effective way to reduce your money stress.
Celebrate your successes.
Pat yourself on the back!
Acknowledge your success and bask in the good feeling that comes with it. When you take a moment to celebrate how well you’re doing, managing your money doesn’t feel as stressful or tedious anymore. It helps motivate you to keep going! No more procrastination, no more head in the sand. Money isn’t scary anymore!
I highly recommend the Profit First system for helping you take control of your finances and reduce your stress levels around money. Once it’s set up, the system is straightforward and easy to use, and it can help you achieve your financial goals while maintaining a healthy work-life balance.
And you don’t have to do it all yourself!
Get in touch if you’d like help tailoring the Profit First system to suit your business.
