#7: ROCKET WITH PROFIT

In today's episode, I’m diving deep into the power of being intentional with your profit to drive your business towards success. The topics included in today’s episode are: 

·         Knowing your profit

·         Being intentional through budgeting

·         Allocating Profit

·         Owner’s Draws

·         Debt Payoff

·         Savings Goals

·         Fun goals like education and travel

This episode is packed with actionable advice to help you get clear on your profit, align your budget with your goals, and ultimately rocket to your goals with intentionality. Whether you’re aiming to scale your business, enhance your personal finances, or build an empire, I’m here to guide you along the way. Tune in and let’s get financially adjusted!

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Disclaimer: This content is for educational and informational purposes only. Please consult with an accounting professional for direct advice based on your specific business situation.

Transcript

Hello my entrepreneurial friend. You are listening to Financially Adjusted and I'm Leslie Roth your host. Today's episode is all about profit and being intentional with it so that you can propel yourself towards your goals. The number one most important step to take when it comes to this is to first know what your actual profit is each month. If you're truly being intentional in your business, you will first have a rough estimate of your profit via a budget.

It's important to map out your money and your goals by having an up a date monthly budget that projects how much margin or extra you have to allocate towards your business goals. When you then obtain your monthly profit and loss statement this is going to give you the actual amount of was generated in your business It's always a good idea to be comparing your actual monthly profit with your budget to make sure that you keep your budget as realistic as possible and you're aware of anything that threw it off. So that you can tweak this and correct it for future months. Knowing what your actual profit is will allow you to specifically allocate every single dollar of profit you have to whatever goals you have in your business. For instance, if you have a landscaping business and you have a goal to upgrade your lawnmower, you might need to allocate profit toward that savings goal until you've reached it.

There are many different ways that profit can be allocated, and how you do this is completely dependent on your specific situation. Some of the different areas you can allocate your profit to are owner's draws, debt payoff, specific savings goals for equipment, whatever else you need to run your business, education, consulting, coaching, or just general reinvestment in savings so that you have that for whatever you need that for in the business in the future. We'll get into each one of these today a little bit. But when it comes to owner's draws this going to be the money you are personally taking from your business. So, having a goal of paying yourself more in your business is really one of the ultimate when it comes to having the business in the first place, right? This can greatly improve you and your family's life and having a steady draw that you can take each month will add a ton of stability to your personal finances and help drive you towards your personal goals. If you're in personal debt steady and increased draws can mean reaching your debt free status that much sooner. And while we're on the subject of debt I'd like to talk about business debt next. If you have business debt whether small or large you need to have a solid plan to pay that off. Closely monitoring profit and allocating as much as possible to debt payoff can absolutely get you there faster.

The faster you get debt out of your life, the faster you can reach other goals without debt payments holding you back and eating away at your profit. Until you have debt paid off, come in minimizing other areas of profit allocation where you can. Only take as much from the business personally as you need to live on and hold off on saving for things in your business that are absolutely necessary for operations. I recently spoke about savings priorities in episode six so if you haven't listened to that one yet definitely go back and do that after this episode. But you always need to be saving for taxes based on your net profit.

And you want some emergency savings and operational cushion as well. But debt payoff is going to be a priority before most other savings. 

Debt emergency funds and operational cushion is just not that much fun to talk about even though it's absolutely necessary, but let's get into the more fun types of savings goals and how you can use your profit to rocket towards them. I'm going to talk about what I consider to be probably the most fun business goals in my opinion, and not saving for continuing education and travel. For you that may look different as far as your fun goals in your business but I think for a lot of entrepreneurs, that is kind of an exciting thing to be able to do, whether it's travel to  an educational seminar or webinar or just taking an online course that you're really interested in. I don't know about you, but I am addicted to learning and I want to buy all the courses and then attend all the seminars and the conferences.

I could definitely go a little crazy in this category. I'm personally still in the emergency fund building an operational cushion building mode, but I already have three courses and conferences lined up that I want to invest in for the future. Some of the education I wanna purchase is in the online space but there are also conferences and events that I'd love to travel to and experience in person. One is QuickBooks connect in Las Vegas which happens annually, and the other is a live event with Brendan Burchard. I subscribed to his membership called Growth Day. If you haven't heard of it or check it out yet do yourself a favor and do that immediately.

I'll drop the link in the show notes below, but it's been one of the best growth tools for me personally and professionally. After I've saved what I need for emergencies I will definitely be aiming my profit towards these two events first. And there's many others I would love to do but I would start there once I'm in that place in my business.

It gets expensive when you pay for events or training, plus you have to pay for travel around the event so I think it's a great idea to make sure you have this included in your budget and have the margin to do it. When you don't plan proactively, most times these business trips eat up a whole lot more of your profit than you think they will.

If you have it in savings, then you don't have to worry about those extra costs making your profit go away that month. If you are a service-based business that generates revenue only when you are physically there to run the business, then you also need to factor less revenue into your budget for those times that you're traveling and won't be there to operate in your business. For some of my chiropractor friends this could apply to you if you don't have an associate dock in your business. If you financially plan out your trip, with all these factors in mind, you'll likely have more fun and peace of mind while you're on the trip. And even though things like this in your business might not directly generate revenue, indirectly they are going to increase your revenue because you are educating yourself. You are advancing yourself and that is incredibly important in your business. So ultimately, it'll help you to be a better business owner and to build a business that is more successful and does generate more revenue. So, it may be more of a an indirect rocket with profit, but it will help you advance your business which is eventually going to help you rocket your profit. You could even plan it out to save extra if you wanna take a spouse, partner, employee, whoever, but definitely keep these factors in mind. When you are doing something like that so that you don't just see your profit drop without having any plan for that. But whatever your fun or your necessary goals are in your business, being intentional about them is going to make them much more likely to happen. And will get you there a lot quicker. And no matter what your fun goals or your necessary goals are in your business I challenge you to start budgeting if you haven't done that yet.

So, I'm absolutely a broken record when comes to budgeting but I strongly believe that everyone needs a personal and a business budget. This is absolutely the best way to navigate to your goals. Do yourself a favor and give some direction to those hard-earned dollars. At the end of the day really that is the goal is to budget so that all the hard work that you're putting into your business is getting you to where you wanna be at the end of the day. It's helping you rock it with your profit to whatever you wanna rock it towards. So, whether that's just increasing that revenue and scaling your business or getting to a point where you are enhancing your family's life and taking more money personally from the business, you might be somebody who wants to just reinvest and build something much bigger build an empire. But just get clear on your goals, get clear on your profit and get really clear with your budget and how you are aligning all of your money to meet those goals. I hope this episode inspired you to take action in your home business when comes to allocating your profit to align with your goals. Have a great day!