Live Q&A: How Much Money Am I Actually Making in My Business?Jan 06, 2023
As an entrepreneur, it may feel like you never know how much money you're making! When you don't know how much you're making, it's hard to make good decisions in business and in life.
When can you take time off? Can you afford to hire a new employee? Will you make enough to pay yourself?
It all come down to cash flow. We're covering how to manage and track cash flow so you can make informed decisions. Tune in for tools to help and strategies you can utilize.
Check out all of Shannon's recommendations: www.fitnancialsolutions.com/recommendations
"The same flexibility, adaptability, and scrappiness that led us into here, you have to kind of reapply that and go, okay, what resources do I have available? If this is overwhelming, who and what do I have that will make this easier?"
What you'll hear in this episode:
- What has been one of the biggest challenges in starting a business?
- How to use QuickBooks online to track your finances.
- Being self-aware is how you learn best.
- How to start a cash flow forecast
- The importance of having a cash flow forecast.
Here are some brief snippets from this episode:
Ruth Dulce Peca is a licensed social worker in Cleveland, Ohio. Her private practice is called Corru wellness. The name Coru is borrowed from the Mauri culture in New Zealand. She uses somatic modalities to help adults feel more embodied.
After the Pandemic, we realized that we can do telehealth. Because of my husband's severe health issues, I was forced to leave that world and start my own private practice at home. This is the most exciting thing about what I do, which is helping people who have a bigger mission be able to execute it without worrying about the money side of stuff.
On that note, let's talk about the questions that you still have related to your business. What has been one of the biggest challenges in starting up the business? Is the infrastructure having some systems in place, organization?
When circumstances change, you have to recalibrate your money metabolism. I feel a lot more grounded when I have some idea of what's happening around me. Not knowing it is paralyzing me because then I insecurity on it. I just want to be educated and empowered.
Do you have any aversion to a software platform to do bookkeeping as opposed to the spreadsheet? My fear is to not knowing how to do the technology side of it. My favorite is QuickBooks Online, but it's not for everybody.
You can pay someone between, I would say between $30 and $75 an hour of their time. If you learn better in digestible chunks, guys, get creative. The key thing here is being self aware to know how you learn best.
You have the books, you have the income and expenses track what's called profitability. It answers the question, am I making money after my expenses? Am I generating something that is net positive? That is the fundamental question of health.
The concept of measuring cash flow is not that complicated. I recommend starting with four to six weeks of a cash flow forecast. And ideally this is a great way to do it too. It's like recurring customers. Then every month this is how much it's going to come in.
How much money do you need to take out of your business each month in order to fulfill your goals? If you're profitable but you're taking out more money than your profit, then your cash is going to be depleting. Early stage entrepreneurs can put this in their toolkit within their first couple of years.
If I have some idea of what money I actually have, are there other things that I could dabble in or learn about? Just having that foundation might make it easier for me to also think about what other options may be within the things I enjoy.
So we have to make sure we account for how much money are you taking out of that profit. How much money do you need that profit to be to live your lifestyle?
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The information contained in this podcast is intended for educational purposes only and is not individual tax advice. Please consult a qualified professional before implementing anything you learn.