Make your business profitable with only a few steps. I learned this really exciting method from Mike Killen at WP Elevation yesterday and can’t wait to put it into action.
Here I’ll give you just the nutshell and what you can do right now.
Your business does not become profitable with bigger clients and larger projects. There’s a massive barrier to scale and profit and that is usually YOU.
You can’t sell a business that isn’t making profit and you wouldn’t want to sell a business that makes profit either.
If you find you’re working harder than ever, but not drawing a profit and not getting a salary, then you need this course. (but I will tell you here in a nutshell what you can do right now)
– The RULES for profit that every business must follow
– Why you’re already profitable (you just can’t see it)
– The options you’ve got to start building profit
What is profit?
Profit = Income – Expenses
Wrong! This is what we all have been taught, and this is probably why lots of us never make much profit …
Why? Because here, in this winning model, you pay your profit first!
Then you pay yourself.
Then you pay your expenses and taxes.
Income – profit = expenses
Not the other way round.
Ha? How can I possibly do that? Don’t I have to pay my suppliers first? No, you don’t. Your suppliers will come after you, no
So pay yourself first. Your profit.
Here is how to do it:
From every money you get coming in you send a percentage straight away to your profit account, another percentage to your personal account as your pay, and another percentage (the rest) to your expenses and tax account.
Here Mike suggests 5% (or 10% if your income is over 500K) to your profit, 50% to pay yourself, 30% for expenses and 15% for tax.
And here is the really cool ‘trick’ (well, I love this one): organise your money in 4 different bank accounts.
- for Income and Expenses: All the money that you get from your business gets paid in there and all the expenses for your business go out from there.
- for your Profit: Might be an ISA in the
UK,or another account where you cannot easily get into. You pay your money in there and you leave it there to accumulate and grow.
- your Personal account: Separate from your business account.
- your Tax account: You won’t touch that until you are due to pay your taxes and you won’t find yourself in a panic when tax paying time comes.
Ask your bank to open those different accounts under one Master account so you only pay charges for one account.
This is a pretty neat plan, isn’t it?
Of course, it takes discipline to keep this up but I think it’s worth the peace of mind and clarity.
Go get profitable!
Many thanks to WP Elevation and Mike Killen!
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