For far too long, I believed the lie that I just “wasn’t good with my money.” I mean, it was true, but with that statement comes something that’s not said: “I feel like I’ll never be good with my money.” That’s the real lie.
Because here’s the thing — financial literacy is a skill you build, like learning to play the flute or riding a unicycle. You get better at it over time. And yes, this also applies to financial literacy in your business!
So whether you’re a new business owner, or one looking to get better with their budgeting, this post today will cover the top things I did to help me build multiple 7-figure businesses, invest in real estate, buy a home, and then head to Whole Foods to buy whatever TF I wanted.
You’ll see what I did to grow my revenue and my profit.
Oh and did I mention I used to be $80K in debt? Yeah…these are all real-life things I did, not just random ish I found on the interwebs. Don’t worry.
This is tres important. Nothing is worse than getting to tax season and realizing you own the tax man lots of money and then not having it (especially since you know you should have set that money aside each month). They DO NOT like it when they don’t get their money.
And in fact, the earlier you can pay them, the better. Most businesses opt for quarterly tax payments, especially when you’ve got a product-based business, one that has employees, or one with lots of overhead costs. Calculating that once a year in a huge chunk versus little by little (especially if you don’t consider yourself a math person) is a bitch.
Depending on your business structure and location, taxes can be a significant expense, so it’s essential to plan ahead! Trust me on this, it’s not something you want to be blindsided by.
Investing back into your business is one of the best things you can do for it. Sure, it might eat up some change as an upfront cost, but it’s so worth it in the end.
Think of things like courses (like ones you actually need, not one that just sounds fun that will sit and collect dust), coaching, software, or employees/contractors. These can really yield a positive return and help you pour back into the offers you have…which can really help things take off…which means more money, honeeeeey!
NON-NE-GO-TIABLE. Seriously. I used to have so much debt and it really sucked to have it follow me around everywhere. It felt like any time I wanted to do anything in my biz (or even personal life), I had this heavy weight I had to consider.
My business might have been growing but I could not grow with it until my debt was paid off.
In the moment, it might seem like it won’t be that big of a deal to spend on something that’s out of your price range, but, the funny thing about debt is that it’s much easier to get into than out of. Plus interest is a thing so the longer you wait, the more you pay. Yuck.
Is this a fun thing to do? No. I get it. It’s hard to see your hard-earned money just sit there if you’re someone like me (who has absolutely no problems spending money).
But you will need this money one day, whether you think you will or not. And let’s say for shits and giggles that you won’t. That’s money you have lying around that can accumulate for bigger expenses that you one day might need (like accrual for a new car, phone, etc.).
But just…make it business. Like maybe you’ll need to hire for a one-time project, like web design or a launch strategist.
Either way, set some money aside. Your future self will thank you.
(Bonus tip — make it an automated withdrawal so you don’t even have to think about it and end up talking yourself out of it.)
As an entrepreneur, you probably won’t have access to a traditional employer-sponsored retirement plan. However, it’s still important to save for retirement!
I know with the way the world is, this is probably the last thing on a lot of people’s minds, especially younger millennials and Gen Z, but when you’re older, it’s going to be a lot harder to go HAM like you are now. You’ll want something to live off of so you can enjoy life.
Consider opening an individual retirement account (IRA) or investing in other retirement vehicles (plus those are technically investments and grow with time, so, double whammy).
Instead of keeping all of your profits in cash, consider diversifying what you make! This could mean investing in stocks, bonds, or real estate. Why do I say this?
Because eventually, you might get tired of just working 1:1 with clients. Or making order after order. Or reach a cap with digital products. The above are some more passive ways to make money without needing a whole lot of time to make it happen.
A lot of my stocks increase on their own because I did my research and know what to invest in. My rental property is accumulating rent from tenants each month all the way in Colorado. A diverse income, in my option, is the way to go!
Running a business is hard work. And whether it’s managing the daily operations, trying to increase your profit, or working on getting those orders or client projects out, you’ll be busy. But it’s not all bad, and there are some ways to manage the cash AND workflow.
You got my best financial tips on lockdown, now it’s time to make better use of your ops. Take a look at the video below to see how you can manage that workload!