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Reverse Engineering Your Income

30 August

Piggy savings bankMany small business owners get started in business because they have something they’re good at, trained for or love to do and their dream is to do it full-time. Usually what they don’t love is running the business side. Some do. Most don’t. If you fall into the ‘most don’t’ category, let’s take a look at a way you can figure out what you must do to realize the cash flow you need to keep your business thriving and you doing what you love – focusing on your product or service and being an independent business owner who calls their own shots and makes their own decisions about what to do when and how.

Start by writing down all your expenses and knowing your monthly ‘nut’. The nut is what you need to generate in order to pay your business expenses and pay yourself.  If your business is your sole income, it’s good to know your personal ‘nut’ as well. How much money do you need each month to pay your expenses? Include everything – rent or mortgage, gas, food, clothing, entertainment including meals eaten at restaurants – all of it. Don’t forget taxes (I know, no fun, but you can’t overlook them).

Now that you know what you need each month, calculate how much of your product or service you have to sell in order to realize that dollar amount. For example, let’s say you’re a massage therapist.  Calculate what it costs you each month in supplies, rent (even if you work out of a home setting), utilities and any other expenses you have. Now look at your week. How many clients can you realistically serve – considering your own body, time available and also factor in any time you need for administration – billing, talking to clients, booking appointments, whatever you actually need to get done in your week?

Let’s say you decide that each week you can see 20 clients for an hour each and you charge $60 for an hour massage. That means you can bring in $1200 each week. If you need or want more income than that, you have to work more hours, sell other services or products, hire someone to do administrative work and free up time, expand your clinic and hire other therapists, or charge more money.

Now you know what you can make and what to aim for.  It may seem simple but many business owners have a hard time putting this equation together. Knowing these numbers in the beginning will help you to realize your vision and know where you’re going.

Some businesses, like personal service businesses where you charge by the hour or the session are limited by the number of hours you work or the amount you charge. Businesses that sell products have a different equation. Both businesses need to have plans for expansion and know how they can find clients and customers to buy their products and services.

 Certified EFT Intuitive Mentor & Coach for Heart Centered Solo-Entrepreneurs –  Reeny Barron empowers transformational entrepreneurs to achieve their life and business goals aligning purpose, passion and mindset – Connecting Heart and Business to Attract the Right Clients, Opportunities, Income and  Lifestyle.

Take the time to develop a business plan that feels authentic, and then develop a clear plan of implementation. When you understand that the foundation of business is to share value with someone else, you come full circle with a heart-centered spiritual practice.      Her blogs, includes inspirational articles showing you how to use your business to create your ideal lifestyle.  Grab the full article, “the Top Ten Reasons  your Spiritual Business is Keeping you Disadvantaged and Broke , at www.passionandpossibilities.com

Like us on Facebook  as we are   soon releasing an e-book/workbook that will get your head and heart thinking seriously connected.

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