A few months ago, I had the opportunity to make a guest appearance on the leadership series of my friend Tim Croll’s B2B Made Simple podcast. In that episode, we discussed 10 ways in which numbers can provide clarity to you and your business. You’ve heard Tim Croll on the Solopreneur Money podcast before on episode 28.
Today we’re going to flip this solopreneur podcast around. In this episode, you’ll hear Tim interviewing me. Listen to this episode to learn 10 financial tips to improve your business and you’ll hear Tim ask me about leadership and money.
You will want to hear this episode if you are interested in…
- A bit of my backstory [1:22]
- 10 financial tips to improve your business [9:38]
- Improving your financial outlook if you are struggling in your business [19:44]
- Not letting your ego get in the way of success [29:29]
- Taking time to think [34:39]
10 financial tips to improve your business
- Start with vision. Before you even begin looking at your numbers you have to have a vision. You need to have the vision to understand where you are going with your business. Once you have determined your vision, this will help you define where your money is going.
- Stop commingling your business and personal expenses. You need to have separate accounts for business and personal expenses.
- Run an annual budget. We all hate to budget, but it is important to understand the flow of your money. Look back over the past 24 months and look for trends. Having a budget in place will give you clarity and focus.
- Understand your revenues. What were your revenues over the past 2 years? Were there spikes and dips? Once again, look for trends.
- Pay your quarterly tax estimates. Creating a separate tax account will reduce the stress of paying taxes.
- Save for retirement. Not only will this help you prepare for the future, but saving for retirement provides you and your employees with tax-saving opportunities. Remember, hope is not a retirement plan.
- Build an emergency savings fund for your small business. Do you have 6-12 months’ worth of savings? This takes us back to step 3; knowing your numbers will help you get started. Having 6-12 months of expenses in an emergency fund will reduce stress.
- Automate your expenses. If you have your expenses automatically deducted when possible this will reduce the busy work that comes with paying bills.
- Seek advice. Financial advice from a CPA or financial advisor is invaluable to solopreneurs. They can help you avoid financial pitfalls that you may not see.
- Revisit your numbers quarterly. Scheduling time to check in with your budget on a quarterly basis will allow you to gain an understanding of where you are and where you need to be.
How to improve your financial outlook if your business is struggling
These tips are great for anyone starting out or already succeeding in their business, but how can solopreneurs who are struggling to make ends meet do all of these things on top of running their business?
If you are having trouble staying afloat, there are 4 things that you can do. The most important thing to start with is by saving money. Even if it is only $50 per week or month, any little bit will help. As a business owner, life can throw you into perpetual chaos. Having a bit of savings behind you can ease your worries.
The next thing you’ll want to do is to begin to tackle your debt. Try taking advantage of the historically low-interest rates to refinance debt.
Before you get to the last step you’ll want to know your costs. What does it cost you to do your work? What is your cost per unit?
This may come as a surprise, but the last step is to raise your fees. This is the quickest way to raise your revenues. Study your market to see if you can increase your rates. This is why it is so important to know your numbers. Once you understand your cost per unit or cost per client then you can follow the ⅓ rule. Tune in to find out what that rule is and how it can help you improve your business.
Resources & People Mentioned
- Leadership 17: Ten Ways Numbers Bring Clarity to Leaders w/ Gabe Nelson
- BOOK – Profit First by Mike Michalowicz
- BOOK – Bet On Talent by Dee Ann Turner
Connect with Tim Croll
Connect With Gabe Nelson
- FREE Downloadable Resources at https://www.gabenelsonfinancial.com/resources/
- EMAIL: Gabe (at) GabeNelsonFinancial.com
- Follow Gabe on LinkedIn
- Follow Gabe on Twitter: @GabeNelsonCFP
- Follow Gabe on Facebook
- Follow Gabe on Instagram: @GabeNelsonCFP
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