1 00:00:00,000 --> 00:00:03,699 Speaker: You don't need to spend more money to make more money. 2 00:00:03,979 --> 00:00:08,870 You believe that you must always invest in your business because that's what everyone 3 00:00:08,889 --> 00:00:11,319 else is doing in online entrepreneurship. 4 00:00:11,319 --> 00:00:15,859 While you do spend more money as you grow your business, overspending 5 00:00:15,859 --> 00:00:17,789 is keeping your business stagnant. 6 00:00:18,450 --> 00:00:23,629 Instead, you can create a framework for making financial decisions. 7 00:00:23,879 --> 00:00:27,860 Today, I'll share exactly how to do that without sitting in 8 00:00:27,860 --> 00:00:29,699 front of a spreadsheet for hours. 9 00:00:30,066 --> 00:00:30,606 Stay tuned. 10 00:00:31,503 --> 00:00:35,233 This is the Harmonious Wealth Podcast, where we're breaking online business 11 00:00:35,233 --> 00:00:40,303 owners free from chasing every next revenue milestone and instead prioritizing 12 00:00:40,373 --> 00:00:44,483 lifestyle and legacy goals so you can finally have the personal wealth 13 00:00:44,503 --> 00:00:46,143 to show for your business success. 14 00:00:46,473 --> 00:00:50,613 I'm your host, Iyanna Vaughn, fractional CFO and bookkeeper here to guide you. 15 00:00:51,073 --> 00:00:53,673 Now let's start building your financial legacy. 16 00:00:54,951 --> 00:00:58,691 Speaker 2: Hello, welcome back to episode 12 of Harmonia's Wealth. 17 00:00:58,731 --> 00:01:00,001 I am Iyana. 18 00:01:00,831 --> 00:01:04,921 It's funny because sometimes I say I am, I'm Iyana and like my Iyana? 19 00:01:04,941 --> 00:01:05,851 No, Iyana. 20 00:01:07,451 --> 00:01:09,361 But anyway, welcome to episode 12. 21 00:01:09,361 --> 00:01:12,901 We're going to continue the conversation of emotional spending in your business. 22 00:01:13,131 --> 00:01:15,851 This time we're going to go over like practical ways. 23 00:01:16,014 --> 00:01:20,564 to have a spending framework for your business and for yourself. 24 00:01:20,771 --> 00:01:24,941 So when it comes to overspending in our businesses, we don't know 25 00:01:24,951 --> 00:01:29,441 what we need to spend on what area of your business because most of 26 00:01:29,441 --> 00:01:33,317 the time it's more than one Area of your business that needs attention. 27 00:01:33,317 --> 00:01:34,277 We have marketing. 28 00:01:34,277 --> 00:01:34,947 We have sales. 29 00:01:34,947 --> 00:01:36,067 We have operations. 30 00:01:36,067 --> 00:01:42,147 We have delivery we have finance we have Legal we have everything in between 31 00:01:42,147 --> 00:01:48,007 like with overhead things of that nature So almost always more than one area of 32 00:01:48,007 --> 00:01:50,897 your business needs attention, right? 33 00:01:51,297 --> 00:01:56,277 However, we're unable to see what is most urgent in your business. 34 00:01:56,617 --> 00:01:59,734 And especially if you're self funding, there's a difference in 35 00:01:59,744 --> 00:02:03,714 you're getting funding to kind of invest in multiple areas or like a 36 00:02:03,744 --> 00:02:05,494 significant area of your business. 37 00:02:05,494 --> 00:02:08,304 But I'm talking to those who are self funded. 38 00:02:08,504 --> 00:02:13,197 When you're self funded, it's kind of intricate or interesting to really see 39 00:02:13,197 --> 00:02:18,011 where you should be putting your money When you're investing in a coach, you also 40 00:02:18,011 --> 00:02:22,941 have two more chances than not invest in the service to implement the strategies 41 00:02:22,941 --> 00:02:28,037 that you're learning I know I felt this to be a little overwhelming at the time where 42 00:02:28,117 --> 00:02:33,297 I had a coach and of course It was like going from where I was right now to having 43 00:02:33,297 --> 00:02:38,687 a full set team And my thought process on growing team is based off the percentage 44 00:02:38,687 --> 00:02:41,217 of income so it was a great investment. 45 00:02:41,267 --> 00:02:44,987 I learned so much and I actually Decreased my team at the end of the day. 46 00:02:45,277 --> 00:02:50,357 I had to pause and think through, okay, if you have a coach that's helping you with 47 00:02:50,367 --> 00:02:53,324 marketing, what is a team implementations, 48 00:02:53,324 --> 00:02:57,604 so when it comes to overspending, we talked about this in episode 11, 49 00:02:58,004 --> 00:03:02,944 but the root of overspending in your business besides emotional spending is 50 00:03:02,944 --> 00:03:07,974 there is no system to make financial decisions in your life in business. 51 00:03:08,171 --> 00:03:10,411 You're guessing on your financial decisions and 52 00:03:10,411 --> 00:03:12,111 you're buying out of emotion. 53 00:03:12,311 --> 00:03:16,771 And the solution of this is to ask yourself these questions. 54 00:03:16,944 --> 00:03:20,024 the first thing, and this doesn't involve any type of 55 00:03:20,034 --> 00:03:24,894 spreadsheet, is have a new zero. 56 00:03:25,094 --> 00:03:27,754 You can't spend on your account until it gets a zero. 57 00:03:27,854 --> 00:03:29,264 Really, no, please don't do that. 58 00:03:29,471 --> 00:03:30,761 Have a new zero. 59 00:03:31,041 --> 00:03:31,801 I learned this. 60 00:03:32,266 --> 00:03:37,026 Years back from my leak teal and she shared that one of the things 61 00:03:37,026 --> 00:03:40,996 that helped her Getting better with money is having a new zero. 62 00:03:41,269 --> 00:03:46,089 So if your account goes down to let's say a thousand dollars That's your new 63 00:03:46,099 --> 00:03:50,256 zero anything You can't spend once you hit a thousand or if you're not at that 64 00:03:50,256 --> 00:03:55,716 place yet, maybe it's 500 Maybe it's 100 get a new zero and then grow from 65 00:03:55,716 --> 00:04:01,776 there ideally You should have at least one month's worth of expenses In cash on 66 00:04:01,776 --> 00:04:06,256 hand at all times in your business and ideally your life But of course we live 67 00:04:06,256 --> 00:04:10,226 in a world where that's not always the case So if you want to start with having 68 00:04:10,226 --> 00:04:15,921 a zero Be at a hundred dollars and two hundred and five hundred go from there. 69 00:04:15,931 --> 00:04:16,631 No judgment. 70 00:04:16,711 --> 00:04:22,391 Okay so ask yourself will this impact my zero in my bank account? 71 00:04:23,036 --> 00:04:27,746 Next thing will be, is this impacting me on breaking even? 72 00:04:27,906 --> 00:04:32,706 Because we want to have a profit in business, but there are some seasons 73 00:04:32,706 --> 00:04:37,226 where profit does decrease less than that 50 percent before you pay yourself, 74 00:04:37,276 --> 00:04:41,646 so will this impact you, this investment impact you from breaking even? 75 00:04:41,806 --> 00:04:45,066 Will I have a net loss for a month? 76 00:04:45,386 --> 00:04:49,416 Or for the next few months, because I am investing in this program. 77 00:04:49,606 --> 00:04:50,856 Ask yourself that question. 78 00:04:51,356 --> 00:04:55,236 Another question is, will this impact me in paying myself? 79 00:04:55,506 --> 00:04:56,436 If it does. 80 00:04:56,586 --> 00:04:57,816 Am I okay with that? 81 00:04:58,026 --> 00:05:00,136 If I'm not okay with that, what can I do? 82 00:05:00,449 --> 00:05:03,239 Another thing is does this fit and this is really important. 83 00:05:03,239 --> 00:05:06,609 Does this fit both my long term and short term goals? 84 00:05:06,949 --> 00:05:10,819 We talked about this in episode 11 where I shared releasing yourself from 85 00:05:10,819 --> 00:05:15,439 someone else's urgency And when you do that, you have to really dig and see 86 00:05:15,439 --> 00:05:20,609 is this particular launch or the offer Does it relate to my long term goals? 87 00:05:20,609 --> 00:05:24,249 Because sometimes we're just buying again, off of vibes, off of emotion. 88 00:05:24,679 --> 00:05:31,289 And to get out of that is to identify your specific legacy and lifestyle goals 89 00:05:31,569 --> 00:05:35,809 and how the business will implement on these goals or execute on these goals. 90 00:05:35,956 --> 00:05:40,886 So let me backtrack when you connect with the true wealth within, 91 00:05:40,886 --> 00:05:44,532 this episode is sponsored by the wealth within weekly. 92 00:05:44,542 --> 00:05:48,842 So the wealth within weekly helps you heal your relationship with money, grow your 93 00:05:48,842 --> 00:05:50,892 business and dig deeper into your faith. 94 00:05:51,417 --> 00:05:55,597 So sign up for the wealth within weekly at lovely financials. 95 00:05:55,777 --> 00:05:57,207 com slash wealth. 96 00:05:57,207 --> 00:06:01,177 The benefits of having a framework around your spending is you're able 97 00:06:01,177 --> 00:06:03,397 to invest in your business guilt free. 98 00:06:03,634 --> 00:06:07,494 You'll be able to identify the expectations of going into an offer 99 00:06:07,514 --> 00:06:09,354 from a coaching program or a service. 100 00:06:09,374 --> 00:06:12,904 And you kind of say, okay, if this is part of my goal, my expectation is 101 00:06:12,904 --> 00:06:15,484 to get This out of this investment, 102 00:06:15,687 --> 00:06:18,267 and you're building patience as you grow. 103 00:06:18,267 --> 00:06:24,347 There's a benefit, and, when clients work with us, we help them understand not 104 00:06:24,367 --> 00:06:29,217 only what they should be spending for that calendar year, but we help them understand 105 00:06:29,227 --> 00:06:31,727 what their next three years looks like. 106 00:06:31,897 --> 00:06:35,377 in their business so that they're out of the weeds of their business. 107 00:06:35,387 --> 00:06:39,507 And they're looking at it from the trajectory of where they are now and where 108 00:06:39,507 --> 00:06:41,667 they want to grow in the next three years. 109 00:06:42,017 --> 00:06:46,637 So we help them understand based off of your lifestyle and legacy goals and how 110 00:06:46,637 --> 00:06:49,067 you want your business to execute on that. 111 00:06:49,582 --> 00:06:54,882 and serve your audience, we know, we have an idea of the leaks that you have 112 00:06:54,882 --> 00:06:59,482 in your business and where to pinpoint where you should be investing in for 113 00:06:59,482 --> 00:07:02,262 this year and the next few years. 114 00:07:02,599 --> 00:07:06,409 Speaker 3: Many business owners find that there is a lack in a systematic 115 00:07:06,409 --> 00:07:10,934 approach when investing in their business, causing Overspending. 116 00:07:11,064 --> 00:07:16,254 The consequences of that is you have a fear of missing out, like when things are 117 00:07:16,254 --> 00:07:22,444 launching or when things seem great or like someone that you know is doing it. 118 00:07:22,697 --> 00:07:26,547 And then you do emotional purchases based because you want to feel 119 00:07:26,547 --> 00:07:30,707 accomplished and you think that others know what you don't know. 120 00:07:31,077 --> 00:07:35,777 And you might be lacking confidence in a certain area of your business, and 121 00:07:35,797 --> 00:07:41,741 when it comes to helping our clients, we kind of ask some questions about 122 00:07:41,741 --> 00:07:47,231 their investments and we help keep them accountable for implementing what they're 123 00:07:47,241 --> 00:07:52,961 learning in said investment, whether it be a coaching program or a service provider. 124 00:07:53,161 --> 00:07:57,631 And we then practically help them understand where their cash is, because 125 00:07:57,631 --> 00:08:02,011 within the first two weeks of working together, we have a cash flow call, and 126 00:08:02,011 --> 00:08:09,251 it gives the client a sobering view of their typical cash flow for the next 127 00:08:09,361 --> 00:08:12,921 12 months, so broken down in 52 weeks. 128 00:08:13,351 --> 00:08:17,711 So the first 24 weeks, the first 6 months, we're looking at, okay, based off of 129 00:08:17,711 --> 00:08:22,017 what you do in business, this is how your business cash flow is going to look like. 130 00:08:22,317 --> 00:08:26,727 So we highlight specific opportunities for income so that they can maintain 131 00:08:26,727 --> 00:08:30,317 their cash on hand, so that they can pay themselves what they need, pay 132 00:08:30,317 --> 00:08:34,954 their investments, and say if they're working with us and they're, Wanting 133 00:08:34,954 --> 00:08:39,454 to invest in like a program that might be big ticket will tell them exactly 134 00:08:39,454 --> 00:08:41,804 how it impacts their cash on hand. 135 00:08:42,004 --> 00:08:49,064 To dig deeper in the cashflow forecast, we prescribe them a new zero. 136 00:08:49,384 --> 00:08:54,614 So remember I talked a few minutes ago about a new zero and based off 137 00:08:54,624 --> 00:08:58,444 of their habits and their business, we're not going to go straight 138 00:08:58,454 --> 00:09:01,004 into a month's worth of expenses. 139 00:09:01,004 --> 00:09:05,614 We're going to kind of gear into that while also in tandem, helping them. 140 00:09:05,854 --> 00:09:11,044 build their savings to three months worth of expenses. 141 00:09:11,514 --> 00:09:16,828 So again, practically we help our clients understand how each and every 142 00:09:16,828 --> 00:09:18,738 investment impacts their cash on hand. 143 00:09:18,897 --> 00:09:23,817 Now I want to get into how to create a framework for spending in your business 144 00:09:24,217 --> 00:09:29,802 Typically As we've talked about before, there is no framework for spending. 145 00:09:30,032 --> 00:09:33,078 It's really investing on vibes or. 146 00:09:33,257 --> 00:09:35,417 Not understanding how it aligns with you. 147 00:09:35,417 --> 00:09:36,917 So I have a three step framework. 148 00:09:37,277 --> 00:09:40,407 First step of the framework is ask yourself if this investment 149 00:09:40,407 --> 00:09:41,609 fits with your big picture. 150 00:09:41,609 --> 00:09:46,209 When we help our clients in the first week we have our legacy planning call. 151 00:09:46,519 --> 00:09:50,749 And in that call, we're able to identify what would it look like for 152 00:09:50,759 --> 00:09:53,489 this particular client to retire? 153 00:09:53,859 --> 00:09:55,539 What would their day in the life be? 154 00:09:55,999 --> 00:10:00,849 What are their immediate lifestyle goals and how can their business help them 155 00:10:00,849 --> 00:10:03,229 create that and to make that a reality. 156 00:10:03,466 --> 00:10:06,986 And with that, we're able to say, okay, based on your goals, this 157 00:10:06,986 --> 00:10:08,586 is what your business must do. 158 00:10:08,993 --> 00:10:13,073 And this helps us create a big picture plan. 159 00:10:13,493 --> 00:10:15,653 So let's actually get to specifics. 160 00:10:16,033 --> 00:10:17,823 Say you're looking at your business, right? 161 00:10:18,383 --> 00:10:24,993 And your goal is to, of course, pay yourself 100, 000 in your business, 162 00:10:25,193 --> 00:10:29,913 a buffer for retirement, And that mean, let's say you want to invest 163 00:10:29,913 --> 00:10:32,053 25K in your retirement, right? 164 00:10:32,073 --> 00:10:37,903 That's 125 that needs to go to you, but you need to be able to have a buffer 165 00:10:37,903 --> 00:10:40,793 in place to maintain cash on hand. 166 00:10:41,663 --> 00:10:43,482 Let's say another 25, 000. 167 00:10:43,533 --> 00:10:49,183 So 150 times two, 300, 000 is what you need to make in your business. 168 00:10:49,433 --> 00:10:54,133 In revenue so that you can satisfy those immediate lifestyle goals. 169 00:10:54,408 --> 00:10:55,608 And your legacy goal. 170 00:10:56,008 --> 00:11:01,598 So to make a 300, 000 business, or to make that in revenue for the year as a service 171 00:11:01,598 --> 00:11:06,288 provider, specifically, you need to figure out, okay, I know I'm underpricing. 172 00:11:06,868 --> 00:11:13,458 How can I make sure this offer not only increases price, but it is. 173 00:11:13,658 --> 00:11:17,088 Elevated so that without a shadow of a doubt that what 174 00:11:17,088 --> 00:11:19,388 you're offering has great value. 175 00:11:19,604 --> 00:11:21,894 And so you have an issue with your offer. 176 00:11:22,184 --> 00:11:25,314 You have an issue with, okay, you're not getting the same leads that you've 177 00:11:25,314 --> 00:11:27,134 been getting for the past few years. 178 00:11:27,574 --> 00:11:32,024 And then you might not be as Great in sales, right? 179 00:11:32,024 --> 00:11:37,348 So you have three different things, at least, that we see that you 180 00:11:37,348 --> 00:11:38,738 need support in your business. 181 00:11:38,758 --> 00:11:41,411 And you're like, okay, which one should I do first, so if 182 00:11:41,411 --> 00:11:42,941 you work on your offer, right? 183 00:11:42,951 --> 00:11:45,751 Then that helps you with delivering better services with the clients 184 00:11:45,761 --> 00:11:47,021 that you already have, okay? 185 00:11:47,731 --> 00:11:48,661 Let's do the offer. 186 00:11:48,861 --> 00:11:51,181 And then also when you work on your offer, you're going to be 187 00:11:51,191 --> 00:11:54,431 able to show it better and then generate better leads potentially. 188 00:11:54,921 --> 00:11:59,281 So if you work on your offer first, then you're able to, when you see a 189 00:11:59,281 --> 00:12:03,511 service or a coaching program that relates to an offer, that's going to 190 00:12:03,521 --> 00:12:05,551 be where you might invest in first. 191 00:12:05,751 --> 00:12:09,341 Then the next thing is, okay, now you got your offer, you're going great. 192 00:12:09,911 --> 00:12:12,071 Do you need help on your sales? 193 00:12:12,421 --> 00:12:16,501 If your offer has been crafted or do you need help on generating leads? 194 00:12:16,501 --> 00:12:17,401 Make that decision. 195 00:12:17,704 --> 00:12:21,621 And once you have that in mind, then you're able to go from there. 196 00:12:21,661 --> 00:12:23,441 That's how you kind of practically think about it. 197 00:12:23,571 --> 00:12:24,221 That's how you think about it. 198 00:12:24,241 --> 00:12:29,431 Of course, you have goals explicitly labeled or written out so that you're 199 00:12:30,504 --> 00:12:32,504 identify what you need in your business. 200 00:12:33,284 --> 00:12:37,254 And then of course you want to take some time to research on who is 201 00:12:37,254 --> 00:12:41,224 the best fit for this particular investment so that you're able 202 00:12:41,224 --> 00:12:43,634 to say, okay, I did my research. 203 00:12:43,684 --> 00:12:44,744 I did my due diligence. 204 00:12:44,754 --> 00:12:45,904 I looked at reviews. 205 00:12:45,934 --> 00:12:47,404 I looked at how they offer it. 206 00:12:47,704 --> 00:12:50,324 They particularly do well with people like me. 207 00:12:50,704 --> 00:12:52,164 And it would be a great fit. 208 00:12:52,769 --> 00:12:53,729 Things of that nature. 209 00:12:53,929 --> 00:12:57,849 So the second part of the framework, after we identified how it fits 210 00:12:57,859 --> 00:13:03,929 into our big picture goal, we want to understand the financial impact. 211 00:13:04,209 --> 00:13:07,699 So remember the question that I asked a quick with a spreadsheet question. 212 00:13:08,544 --> 00:13:10,924 Zero, like your new zero. 213 00:13:11,004 --> 00:13:14,634 Does it impact your profit margin or does it avoid you? 214 00:13:15,634 --> 00:13:18,434 Does it impact you breaking even does it impact you from? 215 00:13:18,588 --> 00:13:24,077 Paying yourself things of that nature so we need to Evaluate the cost versus the 216 00:13:24,077 --> 00:13:28,997 benefit So the immediate cost of course is if you have paid in full bonuses and 217 00:13:28,997 --> 00:13:32,497 you want to do something paid in full Within a few months later you're stressed 218 00:13:32,497 --> 00:13:35,827 because now You've done the investing and now you feel like you're underwater 219 00:13:35,827 --> 00:13:42,684 with your cash or If you have a credit card like an amex card And while it's 220 00:13:42,724 --> 00:13:45,974 cool, it's sexy little platinum card You got to pay that off in full the next 221 00:13:45,974 --> 00:13:47,504 month, but you don't have that right? 222 00:13:47,784 --> 00:13:48,914 So identify. 223 00:13:48,924 --> 00:13:50,264 How does it fit? 224 00:13:50,464 --> 00:13:54,564 Into your world financially where you are now if you don't make any 225 00:13:54,564 --> 00:13:58,844 more sales How does that fit right if you make the same sales within 226 00:13:58,844 --> 00:14:01,444 the first three months because it's going to take a little while, right? 227 00:14:02,034 --> 00:14:06,364 I know as entrepreneurs we have that innate ability to say believe 228 00:14:06,364 --> 00:14:07,884 in yourself for sure, right? 229 00:14:08,144 --> 00:14:12,984 Also have the idea that if nothing changes within the first 90 days, how will 230 00:14:12,984 --> 00:14:14,744 that impact your business financially? 231 00:14:15,344 --> 00:14:18,674 And then the long term benefits and savings, like long term, right? 232 00:14:18,684 --> 00:14:22,187 So say within the next six months, maybe you will see that change, or you 233 00:14:22,187 --> 00:14:26,737 know, I've seen programs where people get their money back in 30 days, but 234 00:14:26,787 --> 00:14:28,777 that's not typical potentially what if. 235 00:14:28,991 --> 00:14:29,821 That doesn't happen. 236 00:14:30,141 --> 00:14:35,594 So you want to be really careful of putting so much pressure on yourself to 237 00:14:35,604 --> 00:14:41,394 get what you need, to kind of make that money back, but then also put enough fire 238 00:14:41,434 --> 00:14:45,864 under yourself so that you're not sitting on your hands, waiting for things to grow. 239 00:14:45,864 --> 00:14:48,557 You just kind of wanting someone to do the work for you. 240 00:14:48,557 --> 00:14:50,527 So there's a balance between those two things. 241 00:14:50,727 --> 00:14:54,717 And we talked about this before, the financial implications is, do you need 242 00:14:54,727 --> 00:14:58,497 someone else on your team to implement these things that you're learning? 243 00:14:58,797 --> 00:15:02,047 Do you find that you're hiring contractors, but they're doing like 244 00:15:02,047 --> 00:15:05,517 multiple people's jobs and it's not working out, how does that fit into 245 00:15:05,517 --> 00:15:07,342 play when it comes to your business? 246 00:15:07,839 --> 00:15:11,139 The next part of your framework is making sure that you're able to 247 00:15:11,199 --> 00:15:14,569 execute on that program entirely. 248 00:15:15,156 --> 00:15:19,496 I talked about this before and I've experienced this where I invested in 249 00:15:19,496 --> 00:15:23,981 something, paid it off, but I didn't even implement, but that was on me. 250 00:15:24,181 --> 00:15:24,891 That was on me. 251 00:15:25,291 --> 00:15:29,541 So you got to really, the third part of the framework is after you know 252 00:15:29,541 --> 00:15:33,801 how it fits into your big picture, the financial implications of it, now 253 00:15:33,801 --> 00:15:39,121 you need to be very clear and very truthful with yourself on if you're 254 00:15:39,141 --> 00:15:41,421 actually able to implement at this time. 255 00:15:41,741 --> 00:15:44,591 If nothing else changes with your schedule, will you be able 256 00:15:44,591 --> 00:15:48,511 to implement these strategies or get the best out of the service? 257 00:15:49,031 --> 00:15:52,991 So following through on your investment is your job, right? 258 00:15:53,221 --> 00:15:56,141 We talked about you releasing everyone else's urgency. 259 00:15:56,381 --> 00:15:59,641 But it's time to actually put urgency in the things that you actually 260 00:15:59,641 --> 00:16:03,251 invest in, because you want to give it your all, give everything your 261 00:16:03,251 --> 00:16:06,711 all, because if you don't, you're going to end up resenting the offer. 262 00:16:06,721 --> 00:16:08,931 You're going to end up resenting the service provider and you're 263 00:16:08,931 --> 00:16:12,011 going to end up resenting yourself and the business entirely. 264 00:16:12,181 --> 00:16:17,939 So be mindful of if you have the capacity to commit to 265 00:16:17,939 --> 00:16:19,419 something new in your business, 266 00:16:19,769 --> 00:16:27,404 in episode 5, Nagina shared how using her trends and understanding her numbers was 267 00:16:27,424 --> 00:16:32,944 able to get her from 30 percent profit margin on average to 72 percent profit 268 00:16:32,954 --> 00:16:35,884 margin on average before she paid herself. 269 00:16:36,304 --> 00:16:40,404 I remember when we were talking specifically about her business model 270 00:16:40,874 --> 00:16:46,484 and the business model that she was on, she prematurely hired staff and 271 00:16:46,494 --> 00:16:48,534 that highly impacted her profit. 272 00:16:48,786 --> 00:16:54,726 she was able to use that data, refine her offer and lean out 273 00:16:54,736 --> 00:16:58,632 her team, so that she was able to produce that high profit margin. 274 00:16:59,012 --> 00:17:03,569 That's not to say that you're putting all the work on one person, but maybe 275 00:17:03,569 --> 00:17:07,929 you have multiple people on your team that are doing similar things. 276 00:17:08,349 --> 00:17:13,572 And now you're feeling the pain of plummeting profit because you have 277 00:17:13,572 --> 00:17:15,152 too much team for your business. 278 00:17:15,452 --> 00:17:18,902 So this is a good rule of thumb for anyone who's thinking about hiring a team 279 00:17:18,902 --> 00:17:24,436 member for every 250, 000 that you make in revenue, you can afford potentially 280 00:17:24,466 --> 00:17:26,046 to have a full time team member. 281 00:17:26,336 --> 00:17:31,856 So say for instance, if you make 500, 000 besides yourself as a full team member, 282 00:17:32,126 --> 00:17:34,286 you have space for one other team member. 283 00:17:34,641 --> 00:17:39,061 Full time specifically that does not include like your contractor. 284 00:17:39,711 --> 00:17:43,661 So use that framework to kind of see if you're able to afford a team member. 285 00:17:43,764 --> 00:17:47,394 also you want to normalize fluctuations in your business, it's going to be 286 00:17:47,394 --> 00:17:51,154 times when you have high revenue, especially when you're launch. 287 00:17:51,439 --> 00:17:55,039 And then the next month or the next couple of months, it goes down. 288 00:17:55,049 --> 00:17:58,949 That is normal, especially if you have a launch based business. 289 00:17:59,329 --> 00:18:02,859 Now, our goal is to help our clients increase their monthly recurring 290 00:18:02,859 --> 00:18:07,899 revenue so that we do have some control over that fluctuation, but don't 291 00:18:07,909 --> 00:18:11,659 be disheartened when you have that difference in between your launches. 292 00:18:11,659 --> 00:18:16,139 I talk about this in episode nine, and I talk about how do we 293 00:18:16,139 --> 00:18:19,709 stop idolizing selling, and that will help you be able to like. 294 00:18:19,909 --> 00:18:25,039 Detach yourself from idolizing selling and idolizing worry when things go awry. 295 00:18:25,439 --> 00:18:26,209 Okay. 296 00:18:26,279 --> 00:18:33,339 So part three are some practical tips to help you understand how to spend 297 00:18:33,349 --> 00:18:37,239 money in your business or how to control what you spend in your business. 298 00:18:37,479 --> 00:18:41,932 So typically when people learn these tips they don't take action. 299 00:18:42,212 --> 00:18:43,082 That's not you. 300 00:18:43,316 --> 00:18:48,932 the first thing that you should be doing, What my approach is practically, after 301 00:18:48,952 --> 00:18:55,286 you've gone through the framework, You want to have a cash flow forecast in 302 00:18:55,286 --> 00:18:59,886 your business, if you want to grow a multi six figure, multi seven figure 303 00:18:59,886 --> 00:19:06,116 business, your business absolutely needs a projected cash flow forecast. 304 00:19:06,489 --> 00:19:07,339 At least monthly. 305 00:19:07,954 --> 00:19:13,524 at least monthly, if not weekly, this will allow you to be able to have 306 00:19:13,524 --> 00:19:17,764 visibility in every single aspect of your business cashflow wise. 307 00:19:18,124 --> 00:19:23,944 So I have the harmonious cash planner and that allows you to be 308 00:19:23,954 --> 00:19:28,324 able to see from a monthly basis, how cash moves in your business. 309 00:19:28,334 --> 00:19:31,434 And with personal, with our clients, we do weekly. 310 00:19:31,634 --> 00:19:37,964 Another way is profit first, and that gives you specific categories or different 311 00:19:37,974 --> 00:19:43,514 bank accounts to, without thinking so much about it, leave out the emotion, right? 312 00:19:43,924 --> 00:19:47,114 To know where exactly your cash should go in your business. 313 00:19:47,374 --> 00:19:51,314 So with profit first, you must first understand your guidelines. 314 00:19:51,324 --> 00:19:55,234 So I have a profit guideline sheet that I share with my 315 00:19:55,734 --> 00:19:57,904 email list on lovelyfinancials. 316 00:19:57,904 --> 00:19:59,104 com slash wealth. 317 00:19:59,524 --> 00:20:02,384 And I give that as a way for you to understand your profit 318 00:20:02,384 --> 00:20:03,444 for the past six months. 319 00:20:03,674 --> 00:20:07,054 So once you understand your profit for the past six months, you're able to then 320 00:20:07,304 --> 00:20:12,404 implement profit first in your business, because now, okay, team is X percent. 321 00:20:12,714 --> 00:20:14,844 Your operating expenses is X percent. 322 00:20:15,544 --> 00:20:19,504 You pay yourself X percent of your revenue and so forth. 323 00:20:19,934 --> 00:20:25,373 I like to use account as my guilt free spending in my business. 324 00:20:25,573 --> 00:20:28,633 And finally, we talked about this before, and that is your 325 00:20:28,643 --> 00:20:30,833 bank balance, your new zero. 326 00:20:31,283 --> 00:20:33,013 Don't spend it till you get to zero. 327 00:20:33,193 --> 00:20:35,703 Have a new zero, whether that's a hundred. 328 00:20:36,308 --> 00:20:42,345 200 going to 500 going to a thousand and growing to five maybe even aiming 329 00:20:42,395 --> 00:20:47,475 to go to no less than a month's worth of expenses and cash on hand 330 00:20:47,485 --> 00:20:48,905 in your business at all times. 331 00:20:49,405 --> 00:20:53,745 A final insight that's really important is always go to the Holy Spirit when 332 00:20:53,745 --> 00:20:59,265 it comes to what you should be spending your money on, and sowing into things 333 00:20:59,265 --> 00:21:04,335 like ministry, helping the poor, things of that nature, because a generous giver 334 00:21:04,385 --> 00:21:07,005 is going to be an amazing receiver. 335 00:21:07,215 --> 00:21:13,025 So I shared tips and how to have a framework for spending in your business. 336 00:21:13,495 --> 00:21:15,665 Which one resonated with you the most? 337 00:21:16,025 --> 00:21:20,075 Is it seeing how the investment fits into your big picture, understanding 338 00:21:20,075 --> 00:21:25,285 the financial impact, or ensuring that you're able to execute on it or all three? 339 00:21:25,750 --> 00:21:28,430 Let me know in the comments below if you're watching on YouTube. 340 00:21:28,773 --> 00:21:34,363 If you're ready to join a community where women are striving to heal their 341 00:21:34,363 --> 00:21:38,653 relationship with money, grow their business, and create personal wealth, 342 00:21:38,663 --> 00:21:42,973 then join me on the Wealth Within series. 343 00:21:43,363 --> 00:21:47,043 Each week on the Wealth Within series, I will share tips on how to face your 344 00:21:47,043 --> 00:21:50,963 money, grow your profit, and manage the cash flow you already have. 345 00:21:50,963 --> 00:21:52,353 Go to lovelyfinancials. 346 00:21:52,353 --> 00:21:53,633 com slash wealth 347 00:21:54,420 --> 00:21:58,510 you're a woman growing both your business and family and you're ready to release 348 00:21:58,510 --> 00:22:02,313 the anxiety around money so that you can grow your personal wealth And 349 00:22:02,313 --> 00:22:08,288 create a legacy Join me every week on Harmonious Wealth subscribe on YouTube 350 00:22:08,348 --> 00:22:10,888 or wherever you listen to podcasts on. 351 00:22:11,288 --> 00:22:15,538 I'm on a mission to help 100 women reach at least 1 million in net worth 352 00:22:15,818 --> 00:22:20,918 to create generational wealth and obliterate generational patterns. 353 00:22:21,188 --> 00:22:24,478 If this aligns with you, I'd love for you to be a part of the community. 354 00:22:24,968 --> 00:22:27,528 Tune in for more episodes of Harmonious Wealth. 355 00:22:29,138 --> 00:22:32,288 Hey there girlfriend, if you're ready to finally have the lifestyle 356 00:22:32,288 --> 00:22:35,788 and legacy to show for your business success, I would love for you to 357 00:22:35,788 --> 00:22:39,578 click that subscribe button on your favorite podcast app or YouTube.