Money, money, it’s such an interesting subject
Mention the word money to someone and see what their reaction is. Then ask them how much they make a year and watch their reaction. Ask them if they think they are great money managers and listen closely.
Money is a touchy subject. Often we look at things in black and white. Those who have it and those who don’t.
Are you someone who wants to have more money? If you answered yes (and I can’t imagine that you wouldn’t) what is it you really think about it? Do you love money or do you hate it? Are you thinking “of course I don’t love money”? And if you said “I love money”, are you feeling excited and elated about that or are you secretly thinking “um, that feels really strange”?
The importance of your relationship to money
The way you feel about money is the way your relationship is with it. Yes, you do have a relationship with money. As a business owner, this plays a huge role in your success and of course, in your profitability.
If you have a negative relationship with money you might bury your head in the sand when it comes to knowing your financials. When you do that, that just leads to disaster.
As a business owner, not knowing your numbers means that you cannot create a healthy business. It means that you may even be working for free. Now I know you don’t want that to happen, so it’s imperative that you know your numbers.
How to know your numbers
Here are simple steps to get your started:
- Gather your income figures for the last 12 months
- Gather your expenses for the last 12 months
- Add each of them up to get a 12 month total and then subtract your expenses from your income
- Ask: what do these figures mean for my business?
After you get your figure, hopefully you’ll be in the green, but if you aren’t take a deep breath. This may be the first time you have seen everything in one place.
The reason you want to ask what does this mean for my business is so that you can take a look at what is going on. You may need to go through your expenses to see what needs to be eliminated but you also may need to increase your income. If you do this, one thing is for sure, you will have a good financial picture in which to begin to make changes to lead you to profitability.
Can you see how knowing your figures will help you determine your outcomes? First you need to see what is going on, then you need to make adjustments and then from there you can begin to work on making a profit.
Give yourself a pat on the back for doing this. This may be a new behavior for you and you want to make sure you congratulate yourself for taking this action!
My free e-book will give you a step by step guide to creating a successful and profitable business as well as a life! Download my free e-book now! It even has a companion workbook that you can use to get starting immediately.
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