Hey guys!
Savanna Bell here with My Massage World and in this week’s video I wanted to share 7
tips to help you manage your money better within your business.
So the idea of money management, and really, anytime we talk finances, a lot of business
owners just kind of tune out.
It’s not the most exciting topic, right?
I mean, you want to hear about all the cool add-ons you can offer.
Or maybe the next greatest marketing tip that’s going to get you 100 clients in the next 2
days.
But guess what…none of that matters if you don’t know how to manage your money.
So pay attention!
It doesn’t matter how many clients you see, or how successful you FEEL.
What matters is can you pay your bills on time?
Can you write yourself a nice check every week so you’re taking home a really good
salary?
Can you easily invest back into your business?
Are you saving for retirement?
Could you continue to pay your bills if you got hurt and were out of work for 6 weeks
or longer?
I have a passion for this topic, because I’ve seen over and over again the importance of
it.
And I’m also just a weirdo.
I actually had to write a paper my senior year of high school, I believe it was, on
my greatest fear.
Other students were writing about not getting into a good college, or their parents splitting
up, things like that…mine was not having enough money for retirement.
At the ripe old age of 17, yes my biggest fear was financial security.
I’m a weirdo…I know.
But you have got to learn to manage your money.
If you can’t manage your money, you’re not managing your business.
Period.
So let’s just get right to it.
Here’s 7 tips to help you manage your money better.
#1: GET A GRASP ON YOUR NUMBERS Now I understand you may hate the financial
tracking part and running the numbers and all that stuff.
But why does that give you the excuse to ignore it?
You’re going to have to put on your big girl pants, or big boy pants, and do it.
That’s like saying “I don’t like doing my taxes so I’m just not going to do it”
or “I don’t like doing laundry so I’m not going that either.”
Seriously?
We’re adults, right?
Sometimes we have to do the stuff that isn’t so fun.
Like laundry and dishes cleaning up after my 4 drooling Great Danes, and yes, keeping
track of finances.
But you want to know something really cool?
Once you get a grasp of these number, once you take control of your finances, there is
a sense of empowerment and freedom and comfort that comes with it.
Because when you try to just ignore this stuff, or not pay close attention, the stress of
what COULD be happening with your money is always in the back of your mind.
You need to track everything.
You need to come up with processes and strategies to make sure you know everything there is
to know about your cash flow, and any and all financial aspects of your business.
If you really don’t want to do this or you know that you just do not have the capacity,
time, or skillset to keep track of everything and know what’s financially good or bad
for your business, hire an accountant and get cozy with them.
If you want to try your hand at it, great!
Do some research and even take some classes to get comfortable with accounting basics
and start doing it!
#2: KEEP BUSINESS AND PERSONAL FINANCES SEPARATE This cannot be overstated!
In order to really get a handle on your business or your personal finances, you first need
to make sure they are completely separate.
This means separate banking accounts (checking and savings for each), tracking each separately,
and essentially treating any money you would take out of your business for personal expenses
like you would if you were paying an employee.
Pay yourself!
Don’t just take money here and there for personal stuff as you need it.
Don’t pay your personal bills out of your business account.
That starts a bad habit and can lead you down the path of losing sight of your real numbers
really fast.
So please, keep your business and your personal finances completely separate from each other
and write yourself a check.
#3: SET A BUDGET This may not be in everyone’s wheelhouse,
but I’m telling you right now you need to do this!
Even if it’s a somewhat loose budget, like you don’t get it down to the penny or anything,
and you give yourself a little leeway on some stuff…that’s fine.
But you need to keep yourself within a reasonable spending budget.
This ties right back to getting a handle on the numbers so you can understand what your
budget should be based on your cash flow.
I mean, a strict budget is nice, but if you’re just starting out on the whole budgeting thing,
don’t kill yourself trying to adhere to it.
It’s going to take some trial and error to figure out what’s best for you.
But just starting somewhere is better than spending all willy nilly and not knowing where
your money is going.
#4: CUT EXPENSES This can mean personally or professionally.
Cut back on some things.
When you’ve got a good handle on where your money is going, then you can sit down and
take a good hard look at what can cut out of that.
Now if you’ve got a really good positive cash flow (and you without a doubt know that)
then this may not be such a necessary step.
But for many of you I know this is something that needs to be done.
Even small expenses add up fast.
This could mean buying generic.
It could mean making your coffee at home instead of stopping by Starbucks or Dunkin every morning.
It could mean cutting back on the amount of retail you keep in stock.
It could mean calling some of your vendors and renegotiating prices.
It could mean cutting cable and sticking with Netflix or Hulu only for at least a few months.
We dropped our Spectrum cable and switched to Playstation Vue and save about $80 a month
I think and I don’t miss it at all.
Whatever it is, find ways to save a little money.
It adds up really quick.
#5: SAVE This is something not many people are very
good at.
I mean, we make a little extra money and all of a sudden something comes up that we just
have to spend it on, right?
Somehow, no matter what we make, the expenses seem to grow with it.
But that’s not anyone’s fault but our own.
I mean, obviously life happens sometimes and unexpected expenses need to be taken care
of.
But for the most part, we can all be a little guilty of getting a little money and seemingly
throwing it away on the next shiny thing that grabs our attention.
Instead, how about you save it!
I know, crazy concept.
But here’s the thing…and I’ve talk about this before…according to a 2016 BankingRate
survey, 69% of Americans have less than $1,000 in savings and 34% have no savings at all!
That is insane.
I mean, what will you do if your car breaks down?
Or if you get hurt and can’t work for a few days, or even a few weeks or months?
That savings account will give you so much peace of mind.
And when you cut those expenses like I talked about before, put that in savings.
Don’t think that all of a sudden it’s free spending money.
No!
It’s for saving.
So save it.
I cannot express the importance of saving money.
The inevitably bad will happen.
Don’t let it get the best of you.
#6: DON’T GET COMPLACENT OR COCKY This is a big problem for a lot of people.
They get a boost in revenue, a clump of new clients all of a sudden, or some other indication
that business is going good.
And then they get complacent.
Or even worse…they get cocky.
Both of these are a recipe for disaster.
Because guess what, while you may see a boost right now, there’s no guarantee you’ll
have the same number of new clients next week or next month.
There’s no promise that your bank account will see that little uptick again soon.
Your marketing may need to change up.
Your local economy may take a hit.
You could have some unexpected expenses pop up.
Clients could move or just drop off for no apparent reason.
Any number of things can happen.
And I’m not trying to be all doom and gloom here; I’m just being realistic.
Bad crap happens sometimes.
Just because you see a swing up does not mean it’s going to keep going up.
You can’t assume it will.
So don’t get complacent and stop your marketing or put a hold on the things that are working
for your business.
And don’t be so arrogant as to think you’ve got it all figured out and now that you’ve
turned this corner nothing can you knock you down.
I’ve made that mistake.
And oh boy did I get knocked down.
So just keep doing the stuff that works for your business.
Keep chugging along, no matter what positive notions you’re seeing, keep working to grow
and improve in every way, including financially.
Last but not least…
#7: LIVE AND PRACTICE BELOW YOUR MEANS I’ve said this a million times and I will
continue to say it ‘til the day I die.
If you find yourself saying “it’s going to be tight, be we can afford it”, then
you can’t afford it.
I mean unless it’s an emergency expense, like you have to have a car repair in order
to get to your clients, or a family member is sick…totally understandable, obviously.
But when it comes to just your business operation expenses, hell no!
You need to learn to live below your means.
Let me give you an example here…when my husband and I bought our house, we were approved
for a mortgage that was almost 3 times what we actually chose.
And yeah, we could “afford” that higher mortgage, but we wouldn’t have been comfortable
every month.
We wouldn’t have been able to take spontaneous trips (not that that happens anymore with
a three year old).
We wouldn’t have been able to easily take care of the unexpected repairs needed around
our new home, and Lord, was it a lot of them.
We instead would have been worried at the end of every month about whether we could
pay for that unexpected repair, or that increase in some random bill, and I couldn’t have
saved up and invested in my business the way I wanted.
There is an ease that comes with living below your means, whatever that means for you.
I don’t have the newest phone, and I will never buy a brand new car, and I will run
my business on a tighter than average budget…all so I can actually enjoy the life I have, rather
than constantly stressing about money, the thing that’s supposed to make my life easier.
So live and run your business well below your means.
It allows for savings, but primarily it allows for peace of mind.
I hope these tips give you a good starting point on how to get a grip on your finances
and finally start managing your money.
Your money shouldn’t be controlling you, you need to control it.
Money is just a tool…use it wisely.
For more tips on finances, be sure to join the My Massage World Facebook group where
we’re spending all week discussing it.
Thank you so much for watching today.
As always, check us out at MyMassageWorld.com, like us on Facebook, subscribe to us on YouTube,
and stay tuned for more videos – there’s a new one every week.