As soon as I utter the words finance, profit or budget, I can see many business owners shudder. In today’s episode I make it really simple and break down how to get started if you want to improve your relationship with money in your business.
In this Episode:
02.17: Committing to the money making process
03.45: Making time to learn about finance and work on your money
06.12: The key business numbers you need to know
As soon as I utter the words, finance or profit, or budget, I can see many business owners shutter, and I get that if spreadsheets or numbers aren’t your strong point, that even knowing where to get started can feel overwhelming. In today’s episode, I’m going to make it really simple and breakdown how to get started if you want to improve your relationship with money in your business.
Hello, and welcome to The Clare Wood Podcast. This is your weekly dose of all things money, to help you intentionally create a profitable business and a life you love. I have the difficult conversations about money so you can make more money with ease. Each week, I share how you can use mindset and the practical foundations of finance to elevate your earnings without sacrificing the things that are important to you, because you can and should be making more money.
Today’s episode is brought to you by my brand new three-day challenge, which is called Profit Booster Challenge. I’ll be coaching you live inside this challenge and showing you over three days:
- Why your business isn’t making more profit
- We’ll be identifying your money leaks and how you can reduce these to maximise your profit
- I’ll be showing you the simple tools and my 9-step framework to get you right across your finances.
This training is completely free, and you can sign up via the link in the show notes for today’s episode.
Let’s dive into today’s episode, chatting about business finances. Today’s episode is going to be focused on helping you get a better handle on your numbers, and where you should get started if you want to improve your understanding of your business finances but don’t know where to get started.
Committing to the money making process
The first step you should take if you’re wanting to get better with numbers is to make a commitment that it is important to you and recognize that you’ll need to invest time and probably money into learning the new skill. Think about it. If you want to learn how to salsa or learn the guitar or learn how to drive a car, what’s the first step in the process? It’s about making our decision and saying, “This is something that I want to do,” and being really clear about the why.
When it comes to making any big shift in your life, it’s so important to lean into the why and understand the reasoning that you’re wanting to create the shift, because mindset really is the foundation of change. Diving to some of those reasons, why do you want to get a better relationship with your business finances? Perhaps you’re sick of unexpected bills popping up. Maybe you want to feel really confident about the investments in your business. Maybe you want to cut back your working hours and you’re not sure if your business can actually sustain that. Get clear on your reasons for wanting to get across your financials, because having that clarity will drive you forward when it feels a little bit overwhelming.
Making time to learn about finance and work on your money
After getting clear about your commitment to learn this new skill, what would be the next steps? Well, let’s think about if you were to learn any new skill. What would be the next steps there? Well, the first step, as we said earlier, is to decide it’s something you want to do, and then the next step is probably to sign up for lessons, and you would pick a dedicated time to commit to go along to your classes.
You wouldn’t skip your classes, you wouldn’t do one class, then decide it’s all too much, and pull out, and then spend the rest of your life wishing you’d learnt how to play guitar. When people want to learn about money, about business finances, I tell them it’s a process. It doesn’t happen in 20 minutes. It takes time to master a skill, and I also highly recommend when you are learning something new, that you learn it from an expert. Knowing that a new skill takes time.
It’s really important that you carve out the time, both the time to learn the skill and also the time to practice. Little known fact, I was a clarinet player at school, and I didn’t just show up to my music class once a week, I used to practice almost every day because I wanted to get better and I knew that practice makes perfect. When it comes to your money, one of the best ways I recommend that you get better is dedicating time to working on your money. Firstly, investing the time into learning how to manage your money, how to understand what business financials are, and then equally dedicating the time to putting these skills into practice. One of the ways that I recommend that people do this is through money meetings.
Inside my course, The Profit Academy: Foundations, I show you exactly what money meetings I recommend that all business owners have regularly, who they should have the meetings with, and what exactly to cover in these meetings to make sure that they are right across their money. Step one, make the decision to learn the new skill and get clear on your why. Step two, carve out the time, both to learn and to work on your money.
The key business numbers you need to know
What are the key areas of business financials that you need to be across to become a money master? Well, there are lots of different metrics that businesses should look at, and of course, there’s not a one size fits all.
However, these are the primary numbers that I recommend that you get across if you are a small to medium size service-based business owner. First and foremost, your profit. Tina Tower has a saying that I love, which is, “Sales are vanity, profit is sanity.” Perhaps you don’t even really know what profit is or how to check in on your profit. Don’t feel embarrassed if this is you. Learning about profit is a skill, and it’s a skill that everyone can learn. If you’re wanting to upskill your knowledge around profit, and specifically around how you can boost your profit, I really suggest you sign up for my free three-day challenge that is coming up very soon. Inside this program, I’ll be explaining profit in more detail and specifically how you can grow your profit, so make sure you check out the Profit Booster Challenge. The next metric I suggest you familiarize yourself with as a priority is your cash flow. Cash flow can be something that cripples even profitable businesses. The last thing that I suggest that business owners familiarize with is budgeting and forecasting, as this teaches you the skill of how to make business decisions with confidence.
When it comes to making a decision to hire a new team member, invest in a course, run a retreat, knowing how to calculate if this investment will be profitable is huge. It really gives you the confidence to make big decisions with clarity. There are, of course, many other money metrics that are important to small business owners, but I believe these are the key foundational areas that you should start with. As I mentioned many times throughout the podcast, if you are feeling excited and inspired about what is possible when it comes to managing your money more effectively, make sure you sign up for my free three-day Profit Booster Challenge via the link in the show notes for today’s episode. Over the three days, we’ll be covering why your business isn’t making more profit, what your money leaks are and how to reduce these, and I’ll also be showing you my nine-step framework to get right across your numbers.
This training is completely free, and you can sign up via the link in my show notes for today’s episode. To sum up today’s episode, if you’re wanting to learn any new skill, it’s important that you invest both the time and the money into creating the change that you want. Firstly, make the decision to change. Secondly, commit the time and invest to learn the skill from an expert, and the last thing that I mentioned in today’s episode is that there are a couple of primary numbers that I really recommend you get across, which is your profit, your cash flow, and your budget or your forecast for your business. Managing your money does not have to be hard when you know how.
Thank you so much for tuning in to today’s episode. Chat to you next week.
I hope you’re feeling inspired and excited about what is possible for you when it comes to money. It takes a lot of time and energy to create a podcast, so I’d be very grateful if you could take the time to hit subscribe, write me a review, and share any of your favorite episodes with your audience on social media. The more people that we can reach, the more people we can empower to earn more in their business, because you can and should be earning more money.