When was the last time you balanced your books? Or even looked at your business bank account, credit card statements, PayPal account, or QuickBooks? Do you have any idea how much profit you’re making each month? Do you have a monthly income goal?
Have you ever heard the saying that the rich get rich by living a frugal life? The same is true with your business: working frugally will yield more profits. By counting those pennies and spending very carefully, you WILL see more profits in your business.
As a business owner, you should not be surprised at how much you owe the government at tax time or how little income you actually made this last year. Savvy coaches who care about making a profit review their books every month to determine where they can cut expenses. They constantly brainstorm ways to market their products and to sell their coaching packages. Let’s get started with a simple accounting makeover.
Take a Deep Breath and Open up Your Books
Whether you have a simple spreadsheet or fancy accounting software, open it up and calculate your monthly income. Remember to include affiliate sales and product sales in addition to your coaching clients. Were you paid to speak or appear at an event? Record it.
Now track your business expenses. This list may be longer than your income list but it should be an accurate accounting of how you spend your business earnings every month. Include software, networking group dues, postage if you have physical products, website hosting costs, etc. Take a look through your PayPal receipts and any other online bank accounts you use for business. Did you mistakenly pay for a business expense on your personal credit card? Log it.
Now do some simple math. Subtract your expenses from your income. Are you in the red or in the black?
Be Shrewd with Cutting Expenses
Now is the time to get serious, get your professional businesswoman hat on, and find ways to cut expenses while increasing your sales.
When looking at that expense column, ask these questions of every line item:
- Do I use it on a daily basis?
- Can my business survive without this?
- Is there a less expensive alternative?
- Can I downgrade to a less expensive plan? What features will I lose?
- Are any of these products duplicates?
- What value am I receiving from these paid groups?
For instance, one of my clients was shocked to realize that her project management software had bookkeeping features, including Profit/Loss reports. So she was able to ditch her duplicate accounting software to save some money.
Another example: InfusionSoft is a very powerful and well-known sales and marketing tool but it also has a steep learning curve and a hefty price tag. Depending on where you are in your business, do you have the income to cover that monthly price tag or does it make more sense to find a less expensive alternative with fewer bells and whistles, such as Active Campaign?
Change Your Mindset and Find the Fun in Budgeting
Did you ever think you’d hear the word “fun” and “budgeting” used together? Well, it’s time to get empowered to take control over your business finances so you can grow and earn more profits. With our brand new Fun Business Budgeting Planner you will discover how to make budgets sexy, how to plan long term goals, and how to create a decision-making process that won’t put you in the poor house. You won’t dread monthly bookkeeping or tax time anymore when you put yourself in control of your finances. Click here to get the planner