When It comes to Making Decisions…
Do you know, you have all you need?
Have you just completed your accounts for 2019? Did you look at the tax number and then put the files away, NEVER to be looked at again?
All your successes are in those numbers!
All your failures are in those numbers!
The journey and story of your business is in those numbers!
I know from most of my clients, when the ‘tax job’ was done and they found out how much they owed, their focus went into payment mode. They thought about paying off their tax bill, can you relate to this? Do you too think about paying off the bill and moving on, maybe you have put the money aside, maybe you haven’t. Either way, it’s ‘job done till next year!’
You are missing so much unique information that can help you so much in the future.
Which of your products or services did you make the most profit on?
Which customer gave you the best return?
Which investments, training or purchases gave you the best return on investment.
It can be so easy to get lost when looking at numbers, that you have to have a process.
Take a look at a business I’ve recently started working on, here are their numbers for 2018 and 2019:
At first look, you did better in 2019 compared to 2018. Certainly, you sold more products and/or services! You also made more profit – so I think you would be happy with this right?
However, let’s look at it a different way, let’s look at the percentages:
It shows a lightly different picture. This way you can see that, your profit margin or return on investment (sales), is down by 3%.
What exactly does that mean? It means that although you sold more of your products and/or services, you kept less of the money you made.
In 2018 for every €1 you earned you spent 55 cents and kept 45 cents.
In 2019 for every €1 you earned you spent 58 cents and kept 42 cents.
Therefore, you worked harder in 2019 – if more sales meant you spent more time at work – for less money. Working harder or longer hours for less money is what we want to avoid.
The difference in our take home money in 2019 is only 3 cents less thatn in 2018 – but remember – that is for every €1 you made. In 2019 you took home €1950 less than 2018.
I am sure you have a lot of things you could spend €2k on, maybe a holiday! (when we can travel again!). Also, unless you manage this, over time, the amount is more likely to increase than decrease.
The Money Map
The MONEY MAP is a process that takes you step by step into building a cash plan that is unique to your business, based on the information you already have, but are (probably) not using.
Sally, was in business a number of years, before she started working with me. She ran a highly successful mentoring programme within the entertainment industry. She had her own accountant and each year provided them with her paperwork and they came back to tell her how much she owned in taxes. Sally paid her taxes and filed away the reports her accountant gave her. She was tired of not being able to understand the information in them and knew she was missing out on unique information that would help her move the dial in her business.
Through analysis and understanding her processes, I was able to see she was losing a lot of money in subscription fees through her money collection methods. Turns out she was doubling up on her PayPal charges and currencies transfers fees by using two accounts. Once I was able to highlight this to Sally, she was able to make the necessary adjustment and the issue was resolved. Sally kept more of the money she earned.
Join me on 12th November, for my free webinar, where I will show you, what you can do today to keep more of the money you earn and make better money decision in your business.
You can also join me in my Facebook Group, which is a safe space to talk about money and success. Running your own businesses is hard, let me help you on your journey. Have a specific question? Contact me here.
I’d love if you shared this article with your business friends or anyone you think may be interested.