Our country has more and more people working for themselves. Maybe you too! Or maybe you have plans to start your own business. But how do you do it financially, what is involved on the money front and how can you tackle tricky issues – such as pricing? Marissa from The Money Mate is here to help! Read her blog for ELFIN here: 7 tips for a better financial routine
Psst: Did you know she is coming Nov. 19 to host a master class for ELFINNERS? Become an ELFIN member too and learn all about the financial aspect involved in entrepreneurship from Marissa.
7 tips for a better financial routine
Routines may sound boring, but the benefits are endless. It gives you control, reduces stress, allows for better decisions and less ad hoc work so you have more time on your hands. And better decisions, in turn, are more profitable choices, and I could go on and on.
Endless, then, the benefits of having a financial routine. But how do you build a fine financial routine that also works for you? I’ll give you 7 tips.
Tip 1: Provide tools and support
What do you do when you want to learn a new sport or when you suddenly think you would like to learn to paint? Right. You go to classes, hire a trainer or at least surround yourself with like-minded people who also want to learn this. So isn’t it a bit overconfident to suddenly think that you are going to master that financial routine overnight without getting support or at least some tools to help you do it? Start working with an accounting program, automate as much as possible or find a buddy with whom you have a weekly money date.
Tip 2: Show up and be patient
Learning new behaviors does not happen overnight. If you want to run a more profitable business and have more insight into your numbers, you need to take this decision seriously. Scientific research shows that behavior change often takes 100 days. And you think you can get it done in 1 afternoon? So persevere and persevere.
Tip 3: Take leadership
It is your business and therefore your responsibility. Maybe you don’t like grades and would rather just be busy with your craft? I get that. But the days of “oh well every month the salary comes in anyway” are over. To start making more money, you need to embrace getting a grip on your numbers. And that’s something YOU have to do and you can’t pass it off to, say, the accountant. And don’t get me wrong. I’m actually quite a big proponent of outsourcing your accounting and tax returns. Then you can be sure that it goes according to the rules and no mistakes creep in. In addition, it can be an added benefit that an accountant is partially chasing you that you really need to send all the receipts for the VAT return.
But, there is one big but. Outsourcing your accounting is really completely different from outsourcing “the financial routine, making good money and being a financially strong business.” You should not and cannot assume, because it simply does not happen in 99% of cases, that the accountant will keep a grip on your numbers.
It’s kind of like, ah ok but I hired a personal trainer now, now I’ll get fit. No you really have to do it yourself. My own coach always says, “You have to be the driver in your own company, and not a passenger. Stay at the helm and so don’t shove it off.”
Tip 4: Think of your numbers as your favorite customer
Schedule your money dates at set times. Make it a fun moment. Perhaps in a coffee shop instead of at home? Really see this meeting as important and actually schedule it, in your calendar. And then don’t cancel, but think of it as your best external customer. After all, that’s when you always show up!
Tip 5: Ask questions
Are numbers not your thing? No problem, everything can be learned! Ask questions, be a good student, practice and go for it. And if you don’t understand: just ask the questions again.
Tip #6: Do the same thing every month
A financial routine should be boring. A bit like brushing your teeth. And it gets boring by doing the same thing every month. For that matter, it immediately becomes a lot more useful. So don’t look at your revenue one month, your expenses the next, and another month whether customers are actually paying the invoices. Sales and profits are important to every entrepreneur. In addition, you have by type of business to a few key “numbers.” For example, the gross margin for entrepreneurs with a physical product or your average hourly rate for service providers. Just when you start looking at the same thing every month you start to discover patterns. And beware, before you know it, you’ll be having fun with the financial routine.
And then measuring really becomes knowing!Taking your decision seriously and growing really strong financially becomes a lot easier with a good financial routine. Routine is indispensable for more peace of mind and healthy financial habits. So the trick is to program a routine that makes financial success inevitable. Because ultimately, it is the constant routines that determine whether you will be successful, and not the fleeting moments when you are momentarily super motivated.
In creating a financial routine, you may take small steps. No one went from “never looking at their numbers and not finding out until six months later whether they actually made a profit or loss” to “knowing the exact numbers every day instantly and making decisions based on that.” in one day.
Tip 7: Above all, make it YOUR routine
The trick is to create a routine that completely suits you and you can maintain effortlessly. Setting financial goals, making a plan and really looking at your numbers may be done entirely your way.
- You don’t have to convert 10K just because everyone else wants to.
- You don’t have to double your sales every month.
- You don’t need to invest in a coach if you prefer to invest in outsourcing to an expert.
- You don’t have to update your paperwork every Friday if you prefer to do it in your pajamas on Sunday.
- You don’t have to use a particular accounting program. Ok, an accounting ram
Above all, you need to create a routine that completely suits you. Oh, and now if you’re going to tell me that your routine is one of ‘I put all invoices in a shoebox and never look at them again’…You get me;)
