Is it Time for a Raise? –
How to Generate, Save and Earn More
How many times have you opened your bank account and seen nothing there? Every dollar that comes in seems to go out. You pay your assistants. You pay your coaches. You pay for supplies. You pay for client gifts. And at the end of the day, it can be quite saddening when there is nothing left for you.
It makes you wonder why you started the business anyways and how you are ever going to retire or pay for something large in your life.
For many new business owners this is the scenario. But there is a way to get around it, even if you start small in the beginning. Pay yourself first.
The way this works is that you decide a sum of money to pay yourself first every single month – before you pay any other bill or expense.
It doesn’t have to be large. And it doesn’t have to be in one payment. For example, it can be $25 twice a month that automatically comes out of your business account and into your personal account.
Once you start paying yourself first, you’ll notice that you automatically start strategizing to make more money to be able to cover your own salary. It may take a few months, but it will happen if you create a plan and stick to it.
If you are paying off debt, it still makes sense to pay yourself. You would just put some of the money towards your debt and some of it towards yourself.
If you are someone that would like to pay your debt off quickly, I suggest you contribute a little money to saving 2-6 months of living expenses in your savings, while you are paying your debt down. You’ll sleep better at night that way.
If having the debt doesn’t bother you, then put more towards savings and some towards debt (until you’ve saved 2-6 months of living expenses).
Focus on creating a business plan that has your revenue increasing. Also make sure that you manage the interest rates on your debt so that they are as low as possible.
Once you start making more money, you can determine your personal expenses + savings + retirement savings and pay yourself a salary to cover all of that.
For example, say you need $4,000 for personal costs (non-business expenses), $1,000 for liquid savings, and $1,000 for your retirement account.
Your client income would come into your business account. Then you might set up two payments to your personal account, one on the 2nd of the month for $3,000 and one on the 15th of the month for $3,000.
The rest of your income would stay in the business account to be ploughed back into the business and fuel expansion. At the end of the year, you could give yourself an extra personal bonus.
Managing money this way makes sense for three reasons. First, it is such an empowering feeling to open your bank account and see money in savings. It just gives you confidence that you are seeing the rewards of all your hard work in building your business.
Second, it gives you something to work with when you are making personal spending decisions. Want a new pair of jeans? Is there room left in your salary for them this month? Many entrepreneurs find themselves feeling guilty for every personal purchase. This way, you’ll actually be able to spend your money without guilt and worry.
Third, it gives you money to plough back into your company. Since some of your money stays in your business account, it helps to fuel business growth. Expanding businesses are money vampires, especially in the first couple of years. This way you aren’t always having to find extra money for upcoming business expenses.
The underlying key to all of this is to have a plan for your business, so that you can keep paying yourself more and putting money back into your business. That is where sound marketing strategy and business planning come in.
Stay tuned, I’ll be talking much more about strategy and planning in the upcoming Breakthrough Tele-seminar Series as well as some amazing videos we just shot.
Here’s to your amazing breakthroughs and paying yourself handsomely!
