Feel Confident in Your Business Finances
As a service-based business, scaling up from remote work to an office space or adding team members and learning how to budget for it all can feel daunting, to say the least!
I’ve learned so many lessons along the way in entrepreneurship and made some mistakes that I want to help YOU avoid! Today, we’re diving into why financials matter and discussing some practical tips on how to take charge of your finances and feel confident in growing your business.
Tip 1: How you price yourself is dependent on your mindset, so there are some big questions you need to ask yourself; What’s the big vision for your business? Do you still see it being around in 10 years? It’s tough to do, but you have to price yourself now to prepare for your big dreams. When you have an idea of where you’re going, it gives you a much better roadmap of how to get there.
Tip 2: You have to understand your finances; sticking your head in the sand won’t help you (in fact, it’ll most likely hurt you in the long run!). Stop guessing whether you can afford something and start writing checks for your growth in confidence. How do you get started in this? Seek out professional help! Find people who can help you get ahold of your finances and create budgets & financial forecasts.
Tip 3: Make a list of all of the expenses in your business – subscriptions, marketing materials, ad spend, etc. to determine what your overhead is at different rates.
Next, create a list of what it costs to have clients – proposal softwares, email systems, etc. that you only have because you have clients.
The overall cost of these expenses should be 30% of your pricing apiece; this is what we call the “Rule of Thirds:” overhead, COGS, & income (including taxes & savings) should each get ⅓ of your total revenue.
None of us are taught this, which can make it tricky to figure out! But you’re not in this alone; listen in, reach out for help, and watch your business soar.