Welcome back to PART 3 of our 4 part series on Money! In this part we’re going to talk about business investments. Notice I called them investments and not expenses. With your business, you want be thinking of every single expense as an investment, because with every investment, you expect to receive a return when you make an investment.
If you haven’t already read Part 1 and Part 2, I encourage you to go back and read them first so that you can build the foundation and work through this in order. Also be sure to listen to Episode 95 of The Business of Becoming.
Check out the video below to dive into this week’s lesson, or if you prefer read the transcript below the video.
Questions to Ask
As you go through and look at your expenses and your investments in your business, I want you to ask a couple of questions.
- Is this something that I’m utilizing right now?
- Is this something that is going to give me a return, or is giving me a return in my business?
- Three: is there something that I could find that would do the same thing, but would be at a lesser investment, or a less cost, and am I okay doing that?
There’s a difference between luxury and over consumption. We talked a little bit this in Part 2. Luxury can be something like a premium service, but it’s absolutely giving you a return, and you’re getting a lot of joy out of it. Over consumption is where you’re paying for something, and it just simply isn’t being used. So you want to be really ruthless here with your business expenses, and make sure that you don’t have anything that is doubling up in the way that you use it. For example, you wouldn’t want to have two different email services. You wouldn’t want to have two different landing page services if you’re paying for an all-in-one type deal.
If you’re doubling up, ask yourself, “Which one do I actually like using, and which one is easiest for me to use, and which one do I think I will want to use in the long term?” There’s absolutely no reason for money to be going out of your business on things that you’re not using.
Using the Google Sheet
What we’re doing with this Google Sheet is very similar to what we did with the personal one in part 2, we’re just now looking at everything in a business sense. Now, one thing to clarify, this does not include things that you would maybe deduct in taxes. I get a lot of questions about that. So for example, you’re not going to put office space in here. You’re not going to put anything that you might be paying for in your personal, and wanting to deduct it in business. This is a cash flow management exercise, so this is actual money going in and out of your business account.
So this is really simple. You’re just going to put in your expense in the category. You’re going to choose the type of expense. The best way to find these expenses, if you don’t have them listed somewhere, is just to pull up a bank statement or a credit card statement, and just really try to think of everything you possibly might have, or that you want to make sure that your business is going to have in the next few months.
And that’s really it for this step, it’s just going through and making sure that the expenses that you are using are on here, the ones that you’re not are canceling. So if you do have something that you notice is listed on here, but you aren’t using it, go ahead and use the action column to cancel it. And that is all you need to do for this step.
In the last part of this blog series, we’re going to be putting all of this together. So we’re going to take the amount of money that you desired from your paycheck from part 2 that we did, and you’re going to take the amount that you have here for your business budget, and we’re going to create a revenue goal, and this is going to blow your mind, because when you have an accurate revenue goal, there’s so many things you can do with it. So be sure to come back next week for part 4!
ABOUT THE AUTHOR
About the Author: Amber Dugger, founder of Profit for Keeps, helps health coaches and service-based online entrepreneurs sort their money headaches and increase their profit potential. She thrives on encouraging and empowering others in achieving clarity with their numbers and discovering the true purpose behind their money goals. She is a certified health coach from IIN and worked in corporate finance for 15 years before venturing out on her own in 2015. She is a mastery level Profit First Professional and loves reverse engineering the Profit First system and combine it with a powerful cash flow tool called YNAB (You Need a Budget) to make it easy to understand and implement for solopreneurs.
Amber is a featured speaker at The Wellness Business Summit being held in Toronto in June 2019. Be sure to grab your tickets for this life changing event here.