Updated: Jul 15, 2021
Budgets are Crucial
We are going to jump right into this. First thing first. Let’s make a budget. It is crucial you know your personal and business expenses.
Open Excel, Sheets or whatever spreadsheet system you use.
On Personal write down all your personal expenses in one column and the associated cost in the adjoining and add them up. Now add to this how much you want to save, vacations, toys etc... What are the costs of all it combined... Make this your take home goal...
Now do the same thing with business. What are all your monthly expenses? If you have a desk fee put it there. If you have a cap add it to the monthly total. Same with royalties and shared expenses.
Did your GCI goal change from when you first entered them in the system? If so, choose Goal Input from the drop down and change your goal. Funny thing about goals. If they are written down, you can achieve them. If they are not written down and tracked, they are a feather in the wind.
As you start to track our expenses, you will be able to adjust as needed. If you do not track expenses or make a budget you will eventually run into problems. Make sure to track your expenses in the system.
Personal and Business Accounts
This is a very important and often overlooked requirement. I cannot stress enough how important it is to separate the money from each other. This serves many purposes.
1. If you ever get audited you can prove your business expenses are in the business account and personal expenses are in the personal account. Trust me from experience, this will save a huge headache. Otherwise they will look at you every time you go out to eat....
2. You need to create separation from the business. You need to look at your single operator business as a corporation. Corporations do not keep the company money in the CEO personal account...
3. It is so much easier when you are not commingling funds and robbing Peter to pay Paul. So if you need more in your personal account, go sell more houses do not take from the business.
4. You can create future spending endeavors based on the money in the account versus spending it on your daughter's car...
The list goes on but this piece of advice helped to save me and countless others from huge headaches. Knowing your numbers, watching the flow of money and running this like a business from the beginning is a must if you want to succeed.
I have coached and collaborated with a lot of people and almost all of them at one point or another, has encountered financial difficulties or issues due to improper management. Once we were able to uncover the issue and make a plan it took some hard work to get back whole. Some took a year, others 10.
It is possible. The best thing is to
Be disciplined from the beginning.
Till next time,
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