62. What do I do with profit?
November 15, 2019
Hey, are you wondering how well you’re doing with your bookkeeping? Maybe you’re at a total loss of where to begin. Maybe you’re not sure how well you’re actually doing. You just need to know the next steps to take.
During a bookkeeping strength assessment, I work with business owners one on one for about 30 minutes and identify what their next step needs to be. I’ll lead the conversation by asking some open-ended questions and then ask ten laser focused questions so I can pinpoint exactly what you should do next and how strong you are with your bookkeeping. Business owners find this to be the boost of confidence they need to tackle their bookkeeping head on.
To get on my calendar for a free session, you can email me at firstname.lastname@example.org or message me on Instagram @lydia.miller.mba. Now on with the show.
Welcome back to the podcast!
We are in the middle of our series on profit. Last week I talked about how to become more profitable in your business and how you can budget and plan for profit no matter what stage of business that you’re in.
This week, I want to talk about what do you do with the cash profit in your business.
Remember, profit is defined as revenue minus expenses.
The cash you have left over is the profit.
So here are 10 things that you can do with profit in your business.
1. Save for taxes. We all know that we should do this, but it’s so hard to do! After all, who wants to just send their hard earned money to the government. Not I. One of the best ways to make this less painful is to open a separate checking account and put in a percentage of your profit each month into this account. It’s painful, but necessary.
2. Pay off debt. If you’ve taken out a loan to get started or ran up some credit card debt, you’ll want to pay this off as fast as possible. Debt promises your future money to someone else, and you don’t want that stress and liability in your business.
3. Save for emergencies. Just like you have rainy days in your personal life, you are going to have rainy seasons in your business. You want to have enough saved so that you can operate for at least 3 months if you get no money from customers.
4. Pay yourself! Yes, you can take money out as a bonus for yourself, even if you spend it on something fun! I took some of the profit that I had saved last year and went on a little shopping spree earlier this year. It was so fun and rewarding knowing that I had put the money aside specifically for me.
5. Buy new equipment. The equipment for you may be a new camera or a new computer. If you’re wanting to upgrade something in your business, you can save your profit to do just that.
6. Invest in a new revenue stream. It costs money to make money sometimes. If you’re wanting to expand your inventory or add on a new product line altogether, you’re going to have to front the money to do that. Once you’ve done your market research and you know that it will be profitable, invest your profit back in your business to expand and grow!
7. Invest in yourself. Are you wanting to go to a seminar or a conference to grow yourself? You are the best employee that you have and the most important. Investing in a course or a conference is a great way to grow personally and something that is worthy of spending your profit dollars on.
8. Invest in a contractor. You may be wanting to hire a contractor for a 6 month period to solve a specific problem in your business. Maybe you need better systems, so you bring on a director of operations for 6 months, or maybe you want to get your bookkeeping streamlined so you hire a bookkeeper for 6 months for just that project. Hiring for a project is a great way to gain traction in your business without having to do all of the work yourself.
9. Upgrade your office. This is something that I did at the very beginning of my business. I upgraded all of my office furniture to iKea, not a huge upgrade, but still, and I love the look of my office. I walk in each day to place that I love to be and that was totally worth it.
10. Focus on your next goal. If you’re like me, then you’re setting goals in your business. One of the goals that I have for 2020 is to streamline my branding and social media presence. I know that I need to have brand photography and simplify my graphics and so on, but it all takes money. Whatever that goal you have in your business; you can invest your profits in reaching that so you can ultimately bring in more revenue and more profits.
I hope those were helpful ways of what you can spend your profit on in and outside of your business!
Are you still struggling with finding out how much profit you have? Are you worried that you’re falling behind or spending too much or not investing your profit wisely?
I’d be honored to work with you. To get started, email me at email@example.com with the problem you’re having and we can discuss the best way to get to a solution in a bookkeeping strength assessment call.
If you are ready to use your numbers to help your business, please subscribe so you will be notified when the next episode drops.
I would love to connect with you. You can find me on Instagram @lydia.miller.mba and always by email firstname.lastname@example.org.
So until next time, go, make it happen.