Just got off the phone with my accountant.
The importance of being close to your numbers is so important.
This is not an area of strength for me but is something I am working hard to become better at.
For years I have battled with personal debt, constant overspending and mismanagement and I realised that to be successful I need to take responsibility and get a better handle on it. Which is why it has been a big goal of mine since last summer, when I knew I wanted to leave my 9-5.
It becomes even more important when you business becomes your sole source of income.
It’s all good to focus on sales, but if you neglect cashflow, tax and profit you can very nearly destroy your business.
Trust me when I say this. I speak from experience.
Things we discussed:
– income goals
– VAT registration (yes it is coming this summer)
– planning my launches and pricing to align with goals
– making sure I know my tax numbers and I am planning for them
– how I invoice and making sure I am using the right tools
– bookkeeping because I realise it is time to take this off my hands
MISTAKES THAT I HAVE MADE, THAT YOU DON’T HAVE TO
CEO Money Mastery
1. Not tracking my numbers and keeping poor records
I now use Quickbooks which is synced to my bank account and paypal so all my transactions are logged and reconciled. No more guessing or wondering. You can keep things simple and use a spreadsheet or pen and paper. The main thing is to keep good records.
2. Not putting money aside for tax
I now have a separate savings account for tax savings and soon to be VAT. Nothing worse than scrambling around to find money to pay the tax man. It is the WORST. Get prepared and plan for it.
3. Not keeping track of expenses and spending in my business without checking the business could actually afford it.
I regularly review what I am spending in my business and cancel subscriptions and payments I no longer need or use. Check this quarterly for yourself. Paypal automatic payments are the worst. Go in and cancel those bad boys.
4. Focusing on revenue (which is important) rather than profitability (key).
Everyone likes to shout about revenue, but for me I have learn that is only one half of the occasion. You can be earning all this morning and spending it all thus leaving you broke and with no profit.
For an online business especially the goal of profit should a priority as our overheads are non-existent.
After all is said and done – what is your profit?
5. Not realising the importance of cashflow
Cash is king, so being able to project and know what is coming in and out of your business to see if you have enough to pay for things is key. I learnt the hard way and so now I make cashflow a priority.
6. Burying my head in the sand rather than seek help
This is the worst. Shame, embarrassment are all things that you feel when you are dealing with financial issues. But the worst thing you can do is hide away. Silence is a killer and you can’t get help if people don’t know what is going on. So be brave, reach out, tell people what is going on, you will be surprised at the positive response you get.
7. Continue to work on my money mindset.
Reading books (Get Rich Lucky Bitch, Overcoming Underearning, Profit First are my faves), practicing gratitude and having an abundance mindset.
So over to you.
Do you know your numbers?