Want to double your profit next year?
If our business is growing you need to start putting a finance system together.
Not paying yourself enough and huge ups and downs in your cash flow are symptoms that you are not taking the time to plan your finances.
Creating a process, in other words a routine will help you to be in control of your finances.
Here in how to take control of your business finances in 5 steps:
1. Start with the end in mind
Decide on one objective.
Remember that just because you made a choice it doesn’t mean that you are limiting yourself.
All it means in that you are going in a certain direction and by making a choice you will have a way of measuring your progress.
2. Decide on your strategy and plan in 90 days periods
It is interesting to have a whole year plan but it can become a bit abstract.
I like working 90 days periods with my clients as it is much easier to visualise what is coming and have a clear plan.
3. Create projections mapping out your strategy
Projections are simply magic.
Using the 90 days as a framework, for each of your different income streams create a spreadsheet showing number of clients multiplied by your pricing.
Subtract the direct costs and play around with the figures to see which combination will give you the best result in terms of income and contribution (income less direct costs).
On a separate tab map out your overhead costs (the fixed costs that you incur regardless to whether you make any sales that month).
Calculate how much it costs to run your business for a month.
Check that the sum of all your revenue streams less their direct costs for each month more than covers the overheads.
4. Track your activities
Now that you know how many clients you need for each of your services create a system to track that you are actually doing what you need to do.
These are the efforts that you need to put in to achieve those numbers.
How many leads per week and how many sales calls do you need to generate for example?
5. Create a monthly and weekly routine
Create a weekly ‘money date’ to update your records, make payments, etc this way your data will be always up to date for when you need the information.
Then once a month take the time for an overview of your results and also to look forward.
Have you made a profit?
How did your result compared with the projections you put together?
What do you need to change going forward to get back on track?
The result
– Better sleep at night knowing that business finances are under control
– Wiser financial decisions when it comes to spending because you will know what is coming
– Clarity on your costs and how much you need to charge to make your financial goal
– Eliminate the feast and famine cycles that gets all stressed out about money
Can you see that doubling your profits will not be an issue when you are closing monitoring all that is important?
Need help with this?
Why not to book a complimentary call with me where we can map out this whole process for your business?
