TC: THE START TO NEW GROWTH
There has to be a starting point and for our system the start consists of setting a monthly financial goal. As small business owners we have two categories in which we have to set financial goals: personal and business.
In order to keep it simple please do the following:
- List all your re-occurring bills that are the same each month such as mortgage payment, rent, car payments, all insurance payments, etc.
- Make a list of all debts, credit cards and loans, and determine a fixed monthly payment for each of them
- Next make a list of essentials such as food, entertainment, children expenses such as school, clothes, etc. personal and household expenses, etc. Use your best judgement as to the monthly amount needed each month.
- Savings and retirement accounts. Add up the totals for the three categories and add another 10% of that total to be put into savings.
- Itemize all your business expenses including, but not limited to: loans, memberships, subscriptions, marketing, printing, office supplies, etc.
- To the above total add another 10% for a business reserve account.
- Last add an estimated tax liability and show it as a monthly expenses.
The sum of the personal and business expenses is your minimum monthly income needed for survival and growth. The only reason you are in business is to generate a profit, so add another 4% to this sum as a profit goal.
This is such an important part of this process, but I don’t want you to spend days and weeks in the development of your required incomes. If necessary, estimate as best you can and make adjustments in the future. Please use a credit card for all your purchases. This will allow you to update your actual budget over the next few months. Yes, please have a different credit card for personal use as well as one for your business.
If you don’t have these figures, not only on your mind, but also on paper, you will never know if you are reaching your objectives. With these numbers, now a viable action plan can be developed and implemented.
Please spend the time necessary today to complete this challenge.
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