Are you running a business plan that has given you a clearer sense of direction and purpose in your business? Or are you like I did when I first started my business running the hope plan. The hope plan is when you cross your fingers, get to enter financial year, hoping that it all worked out in your favor.
Now, if you are owning the hope plan it’s not too late, and you know you can start right now to make some differences and changes in your business. Now, if you’re not tracking things such as you know, firstly, if you don’t know what your business wants to be turning over financially for this financial year, that’s a real concern because how do you know what your weekly targets, your monthly targets are, if you don’t know what you’re financially trying to achieve. Now, I’ve lost count the amount of times that I’ll speak to somebody in business and trainers, personal trainers will go, “I’m not in it for the money” that’s not the best mantra to be walking around saying. “I’m not in it for the money” now, what they’re really saying is that money’s not the thing they want you to know that they’re focusing on, that they’re a good as a person and they’re not doing for the money.
Well, yeah, I know that. You know. Yeah, like anybody who’s obtained some wealth or you know account riches. And no, they’re not in it for the money, it’s got to be more than just the money. So, it’s not the greatest mantra there’s nothing wrong with it. But the other thing is that I always smell a rat when someone says, “I’m on it for the money” oh okay, we’re worried what you’re looking for” and they tell me but you know but you still got a lifestyle right? You got a family, you want got holidays, you got your life to live right? Even a mortgage. So, like it or not the business needs to make a certain amount of income to provide a lifestyle. Now, the first thing is if you haven’t designed your lifestyle, so what is it that you want from your business? What does it need to provide to, you know? And so, I mean people in amateur don’t even do this. They don’t go right, how many you know, how many holidays I want to take this year. So, you know, I’ve had trainers go up and take a holiday for years you know. I go, “Why is that?” so you know how many holidays we’ll take per year. You know, do you have a house for mortgage? Have you worked out all your costs, you know personal living expenses? And then work out where your business actually needs to make.
Now understand that I’m not surprised how many people don’t have this people who haven’t separated personal expenses and business expenses. So, there’s been many times we sat down with somebody and go, “let’s work out your personal expenses”, and they’ve worked it out. So, there’s car, they get honest about how much they actually spending when they’re eating out during the week going out, doing social activities, rent or mortgage or food. And you know, it’s been several times that when we’ve worked it out, they’re sitting there right in front of them, they’re shocked look at that, no not even breaking even. They’re in debt you know and there’s credit card debt and all this other stuff.
So, my first tip that is if you haven’t design your life, look at like, you go how many goals you want to take? What’s that gonna mean? What do you want to do? How you want to work? Figure out all of that stuff first and then then you can work out, what is my personal expenses? So, sit down if you haven’t already work out what are they actually. Not what you think they are, not you’re guessing they are, actual expenses. Work it out so you know, what’s my rent what’s my mortgage. You know, give myself allowance and I’ve actually given myself an allowance to spend each week or do I just spend money like it’s gone out of fashion. You know what other expenses do you have and then check it out and then you’ll be able to know this is my fixed expense. I also to give you some insights to go, where am I spending money that maybe I don’t need to or I’m overspending. Even to this day I’d give myself a budget a weekly budget to spend because I know if I don’t then I could quite easily go over it. So, what is your budget? Do you pay yourself a wage or do you just treat all the money that come into the business like it’s yours? So, these are all very important questions that work out your personal and your business expenses. And so, you’ve worth it your personal you go, “right this is what I actually need to live in a bare minimum “What is the business currently making so, what is the business currently making? And you can work that out what am I cost for the business and then you work it out. But separate it so many people don’t separate the business and personal expenses and all their money going at one account or the store collecting cash and it’s a mess.
Now, if you’re in business I’m assuming you got the business for a variety different reasons people do, it has to be profitable. And so, one thing when you figure that out, you can then start to go, “okay, well now it’s right in front of me, am I okay with that? Is this being just what I want to be earning, am I earning enough” you know, “what is it that I want for my life? I got kids. I got a family or want to start a family or buy a house.” so what am I striving towards with my business, in my finance. What am I trying to achieve here? And again, if you don’t have this stuff in place, it’s very hard for your business to run and that’s why it called the hope plan because you’re just hoping every year that it pans out okay. Now for me the reason you set financial targets in business is quite easy it’s because you know per week, we’re going to be bringing in, per month what’s the business to be doing? How much you want to put aside a profit? How much do you need to put us off a tax, to ST, into your trading account, like what is this and again you’ll find that your business on so much smoother when you have this stuff to sorted. And again, I really have encouraged not to let another year go by.
If you haven’t been keeping up to date with your financial sort of things that you really change it because it’s not just about of course the money it’s about knowing what’s going on in your business, what to change, how to grow, where’s this room for improvement. If I had a, you know, if I had a price increase of even ten dollars, what would that mean for the business in terms of your increase profitability, all that stuff. You know, it’s very very important, but again it gets neglected. And it isn’t any wonder why you know I see, we see so many businesses that are going and they’re not profitable. And for me if you’re in business it’s not just how much money you can make week to week, it’s how much money you can farm aside that’s going to be the real important thing. Now, I’m not claiming to be a financial advisor, I’m not giving financial advises. I’m giving you my experience and my opinion on what I’ve experienced, I’ve had personally saying and achieved. And so, I’ve had plenty of people come to me, they’ve been in business for ten years and they don’t have a cent to show for it and I go, “not one cent?” so I go, in that ten years that your business was making extra amount of dollars, you haven’t made any profit, there’s no profit, where’s the profit from this business? My god well I haven’t gotta go well or they’ve had this been on cars and stuff you know, stuff they can’t really show for, And I go, so when you’re retired what are you having to retire on? And like this is a topic that, money and sex, the two topics are people get really awkward they’re talking, that I want to switch off and on and know about it hope it all works out but it’s not gonna all work out so you need to take yourself control of it. God, it’s like I’m bit like lecturing and preaching here now but I really care, I really care about people getting this side of their business sorted and so as an example if that same person over years that hadn’t put any profit aside, if they if they even were smarter, I’m not talking about shares, I’m not talking invest, I’m just talking about even if they had a bare minimum, this same person who I spoke to that it had zero after years, zero profit at all they’re nothing to show for it, had even put twenty thousand dollars aside until you in an entire in years’ time of doing that, they would have had grands in there, but you know, they got at the moment they got zero, they’ve got nothing, absolutely nothing. They’ve just been living this life off the business but not answer profit to show for it. And so, when we don’t take care of this other business, it just becomes very hard.
So, look my tip today is, like you know if you don’t have a plan in place, you haven’t done your financials sit down and make a time to work out your personal expenses, what are they? Work out then what are your business expenses and look at where you’re actually tracking, the next thing will get go, how do you want to improve the share in your business? Do you want to earn an increase turnover by %, %, %, coming to this financial year because we’re coming up to the you know journey that this last financial year but what am I building for the following financial year and how can I increase this one as I got it right now? I remember like back when I was you know first starting my business, I had someone you know, run the talk past me and I just you know just discounted it you know, I didn’t want to know about it and you know if I look back now, you know, if I had some of that insight that I actually apply that I was told back then I would have been even in a better position, you know, so I really do encourage you to start you know if you’re not already addressing that part of your business. Look you know, look at what is your financial targets. Okay, how much you can farm across and to some kind of profit, how profitable is your business, are you paying several wages. Now, a lot of these things are talking about, if you don’t have knowledge of it that’s what you speak to your accountant, you know you know your financial advisor. Somebody can advise you properly in it but you know if you don’t if you’ve been running a business that’s doing quite well, you need to look at it, you need to look at if it structured right, you know. Do I need to be paying myself a wage, you know? I’ve had plenty of trans can pass to making like grand a week, not putting the right tax aside for it, so they’re always under tax issues come that. They’re not putting GST aside or they’re doing mainly, they’re taken mainly cash because they don’t to pay the GST and when it comes time to buy a house, they can’t do that because that they’re not showing that they’re making enough.
So, it is really important that we you know get this side of our business running effectively. All right that’s it for me stay more for live videos real soon.