Why Managing Your Business Finances is So Important
And what about the months when there isn’t anything leftover in your business account to pay yourself with, what do you do then? You may not realize it but this is an all too common scenario. Why? Because many people don’t realize the importance of managing their business finances. It’s YOUR business, why shouldn’t you know whether it’s making money or whether you’re actually running something that’s costing you every month. There are a number of reasons why business owners need to be more involved in their business finances. Here are some of the reasons why it’s important to manage your business finances:
Releases blocks that you're not good with money
You think you’re not good with money so you don’t look at your business finances and because you don’t know how your business is doing, you make yourself believe that your business is losing money because you’re not good with money. What a horribly vicious circle. Actually creating financial systems and other processes that are fool-proof and make it easy for you to be good with money is one of the easiest ways to let go of this block. You may be hesitant because you have not been taught how to or your current money management systems, if you have any, result in stress as opposed to ease and abundance. But once you begin to implement systems that are designed for abundance, you will automatically start making abundant financial decisions which in turn will help you grow an abundant bank account. And you don’t have to implement everything all at once, start with a monthly money date or put together the right finance team to review your business finances every month. By taking even small steps you’re going to start realizing you are in fact good with money.
You have to boss up to build up
It’s so much easier to implement business finance systems while your business is just starting and headed into a growth phase. Put them into place as you're starting out and they will be on autopilot as your business grows. That way you can actually focus on the growth of your business as opposed to the growth of your debt which means your finances will be a mess and you have to hire a team to fix them. Having to hire a team to fix your financial mistakes only does one thing. Can you guess? Refer to the first statement about the importance of managing your business finances; releasing money blocks. Why avoid decisions that need to be made now only to have to hire to fix them afterwards? You have to get serious about building a business that makes consistent profit and income. By putting off important decisions early on just means you’re not ready to step into the CEO identity you are seeking. There will come a time when you’ll have to put your big girl panties on - and that time is now.
You are worthy of wealth
This one is taken from my own personal toolkit. If you’ve been here a while, or even if you’re brand new, you will know how important it is for me to reiterate that you are worthy of wealth.
There’s a reason, or many, why you started a business. Maybe it was to create the money, time or freedom you desire for your family and for yourself; maybe it’s a combination of all three. When you think of a business owner, do you think of someone who works when they want to, takes vacations when they want and most importantly has no ceiling attached to their income? I know those are all the things that come to my mind. But you need more than just an income; your CEO vision requires wealth. Desiring a business to give you more income is a scarcity mindset. Income is for you to live, wealth is for you to build - whether it be building assets, freedom, a legacy, etc. True financial freedom is achieved by building wealth, and THAT is what you are truly worthy of. Managing your business finances is going to help you forever change the financial footprint for yourself and your future generations.
Because it's what your CEO self would do
Remember when I mentioned that your CEO vision requires wealth? That wealth doesn’t happen by ignoring key components of your business, most importantly your business finances. By managing them you can easily see how your business is really doing and based on that, make key decisions on what expenses you can cut out, what revenue streams you need to double up on or get rid of, etc. You can also see how much you can pay yourself each month without guessing or paying yourself with financial scraps left over from the month. You can set aside money for taxes, reinvest in your business growth and hire a team. These are the types of decisions a CEO makes and these are the types of decisions that lead to wealth instead of just an income. And one of the easiest ways to answer all of these questions and know where you are financially is to look at your Profit and Loss Statement.
But that is only going to help you if you are managing your business finances regularly. If you don't manage your business finances none of the decisions, mindset shifts and wealth building are even possible!
If you know in your heart that your biz is not making the money you desire, that you are still battling limiting beliefs that block your income potential and if P&L sounds like a foreign object and you’re living lost and confused about how to manage your business finances, then this is your time to BOSS UP TO BUILD UP!
Inside this FREE 2-part mini course, you will
boss up your business finances and build a CEO mindset.
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