You started your blog or business because you had a passion for your topic or niche and you were bursting at the seams to share. You’ve been able to help several clients and are excited to help more. But when you look at your bank account, you wonder if you can afford to do it. “I thought running my own business would bring me financial freedom,” you say. Don’t despair!
Even if you’ve been in business for several years, you may not have these three systems in place. And putting them in place will help you understand where you’ve been, where you are right now, and what the future may hold. While it’s not impossible to be successful without these systems, it’s a darn sight easier! 🙂
Bookkeeping: Recording the Past
You need a bookkeeper. Okay, you can DIY it if you must. But having someone who’s got your back, knows the ins and outs, and can easily give you the bottom line is priceless. You don’t have the time to fuss with it, you’ve got clients to help and dinner to get on the table. But regardless of whether you do it, or you hire it out, you need some sort of system to track the inflow and outflow of funds in your business. Getting that clear picture of where your money is going and how it is coming in will make all the difference in your business.
There are three bookkeeping solutions I recommend: Quickbooks Online, Xero, or Wave. Wave isn’t as full-featured as the other two, and Quickbooks has the brand recognition, but any of the three will work well in most cases. Check them out and see what resonates with you if you’re DIYing it. If you go with a bookkeeper, they’ll have a program they prefer and can help you get all set up.
Shameless plug: Work with me and get your software free! 🙂
Budgeting: Identifying the Present
What? Budgets? Absolutely. They’re not just for personal finances (you DO have a household budget, right?) and they can totally change your life. I’m not talking about the Excel spreadsheet with rows for several dozen categories and columns for each month and you lock in stone how much you’ll spend in groceries in August when it’s only January 2nd. That doesn’t work. It can’t work. It’s crazy.
I’m talking about giving each dollar a job. It’s the YNAB method — if you haven’t heard of YNAB (aka You Need A Budget), I could preach all day about how awesome it is! I’ve used YNAB to get out of debt (and stay out), pay for a family vacation in CASH, help a friend stop dipping into savings every month AND start replenishing the savings account, ensure all monthly bills are able to be paid AT THE BEGINNING OF THE MONTH… need I go on? I can, trust me.
Using it for my business has been awesome. I’m able to ensure that I pay myself a salary, have the money to pay my estimated taxes, have the money to give myself “vacation pay”, buy a new training program next year, be able to renew my (multiple) domain names when they’re due, etc. All by budgeting!
Benchmarking: Planning the Future
I don’t have a crystal ball. I can’t tell you what the future holds for you and your business. What I CAN tell you, however, is that it is possible to be prepared for it and actively pursue it. Take a look at your historical numbers and what others in your niche are accomplishing. Set financial growth goals and try to reach them!
Be sure to not set some “pie in the sky” goals like making a million next month, but make them just a little bit of a stretch. Then track your progress. When you hit one threshold, add another. Maybe it’s an income goal, maybe it’s an expense limit. Maybe it’s shooting for a ballpark percentage to match others in your niche. Reward yourself for reaching the benchmark and gear up for the next!
Above all, remember your “Why”. Why did you start your business? What do you hope to gain from it? How will your business contribute to your ultimate life goals? If you don’t have these systems in place yet, don’t panic and rush to implement something that isn’t right for you. Keep your “Why” in the forefront and take your time to understand these concepts and work with growing your business support systems organically.
Do you already have systems in place? Share in the comments!