For a lot of business owners, the idea of “building wealth” means working as hard as possible to bring in as much revenue as possible and HOPING there will be money left over to enjoy.
But how could it feel to feel confident in your financial position – to KNOW that you are set up financially…without compromising your happiness now and spending absolutely nothing.
I’ve worked with lots of business owners JUST LIKE YOU, helping them be confident in the financial future they are building and wanted to give you my top 5 steps to building financial confidence!
The #1 thing that creates confidence is actually knowing what you need to achieve in order to get the result you want. So I’m going to ask you to sit down and do something you may have never done before. (And if this feels overwhelming, my favorite way to do this is at café with a delicious cup of coffee, or a bar with a cocktail #nojudgement – make it a fun “money date!). Look at your current financial position and understand exactly what your life currently looks like.
Total up all of the financial necessities in your life for a year.
This should include ALL of the following:
Once you know what these numbers are, add them up!
From here, you can create 2 metrics for yourself. Create both a “Floor” number and a “Goal” number for yourself. The “floor” is the minimum you need to pay your bills and the “Goal” number is what you need to achieve everything you want in your life!
Once you know how much money you need to be taking home to meet your financial goals, the next step is to determine what your business needs to make to get you there. Now we all know that we don’t take home every dollar from our business (I wish!!) so our revenue goals must take into account the business expenses.
Take your revenue goals and add back the following:
Once you have this number, you now have a “Floor” and “Goal” for your revenue. This knowledge will help you make decisions like what projects you might need to take on even if they aren’t “dream clients” or if you can afford to turn work away!
Ok, I know this is a broad statement, but the great part about being a business owner is you can create a business however you want. So if you want to have 2 super high ticket clients or 17363 low ticket products – THAT IS UP TO YOU.
However, you do need to create a business plan outline how you will achieve that revenue goal so you know its attainable.
Your business plan should take into account your
As we all know, you can create the best of plans, and things still go wrong! The most important part of building wealth is creating backup plans so that if (truly when) things don’t go according to plan, our entire plan isn’t blown up and we can get back on track.
The best way to do this is having an emergency fund that we can dip into during a slow time. (Now, remember this is for true emergencies and not a “I really want to buy this new handbag” emergencies 😉). My preference is that you keep 3-6 months of business expenses in your business emergency fund and 6-9 months of business expenses in your business account. If your business is very seasonal this may need to change, but that is a good starting point!
It seems easy to sit down and say “I will only spend xx each month” or “I will save xxx into my retirement account so I can build wealth for my future”, but it’s a whole different ballgame actually doing it! Money is inherently emotional, which means it may be difficult to make a logical decision about money in the moment, so the best thing you can do for yourself is develop systems to make your plans happen automatically. Here are some of my favorite systems I have in place to keep me accountable.
While it may feel like you are currently living in a feast or famine cycle, there are ways to feel like you have a steady plan you are confident about that will help you build wealth! – Start with these 5 steps and you will be well on your way!
This featured article is brought to you by: Christy Bowie, CPA & Financial Consultant
Christy is a CPA & Financial Consultant who empowers service-based entrepreneurs to grow their business by taking away the stress of finances & creating strategic plans to scale. After starting her career at Deloitte where she served some of the world’s largest private equity companies as well as high net worth business owners and investors, Christy learned the powerful strategies that successful CEOs use to scale.
Christy has served hundreds of small businesses in various industries, stages of businesses, and revenue ranges and has a passion for helping founders build legacy businesses that can provide generational wealth and a lifestyle they love. Christy also hosts a podcast called The CEO Wingwoman where she brings on guests to discuss important topics about scaling a large business. Christy’s goal is to help you feel empowered as a business owner & get back to being the CEO instead of stressing about details.
>>>>>> Access Christy’s FREE workshop here: “Can My Business Afford This?” to learn how to determine what you can afford in your business while still paying yourself, paying off debt, and growing your company. If you’re needing guidance on your financial planning for your business, this is the workshop for you!!