Business money management doesn’t have to be intimidating or complicated. I’m going to give you a four-step foundational framework for your business that covers the four key areas that I believe are the most important to help your business thrive financially. This framework can easily be remembered using the mnemonic “DECK.” Discover your Breakthrough Number, Establish your financial protection, Create your money management system, and Keep more profit. 


Discover Your Breakthrough Number


This first step is critical to knowing your numbers. You cannot begin to plan or to project anything without knowing your minimum number that you need to bring into your business. This number consists of your four walls of business; access to buyers, critical operating expenses, inventory and product spend, and payroll and payroll expenses. This is the first number that tells you how to be self-sustaining and includes your own paycheck and taxes.


Establish Your Financial Protection


Now that you know how much it really costs to stay in business every month (at the bare minimum), how do we protect it? Creating a cyclical fund for annual expenses and an emergency fund are two ways to protect your operating account and monthly cash flow. The Cyclical fund is created by making twelve small monthly payments to cover the amount you need for those larger annual expenses. Just add up the license renewals, memberships, and other fees you pay annually or semi-annually, divide by 12, and deposit that littler amount into a fund every month to cover expenses without a huge hit to the budget.


For the emergency fund, your first goal should be about three times your breakthrough number. This will ensure that you will cover all expenses including your paycheck. That number may look at little big at first, but adding a little to the fund each month, or committing to a percentage of profits until it is full will get it filled quickly. Once it is full, it just sits there! You don’t have to do anything with it, unless there is an emergency.


Create your Money Management System


This is the step that many people overlook or ignore because it may seem intimidating. You don’t need fancy software or complicated spreadsheets with calculations to manage your money. You must have a system to track what comes in and goes out (every dime) and a system to plan for future expenses and projects. Because you have your breakthrough number already, you know what your minimum expenses are. We add in any debt payments or project costs here, and make sure that we have a written spending plan.


How you write it is up to you! Do you like using an app on your phone? A spreadsheet? A notebook? A template you created?  The beauty of this step is that you decide which tracking and planning system works best for you!  The key is to find the system you will love and use again and again.


Keep More Profit


My first rule of business is, “don’t lose money.”  My second rule is, “keep your profit.” The first one everybody gets. It’s the second one that I find people tend to overlook. Once we start making money in our business, we seem to find a place to spend it! It seems that there is this point, a bottleneck if you will, where everything coming in is going out. Knowing your profit on everything you offer is critical to avoiding this issue. You must make profit on everything, but the profit doesn’t have to be equal across things. For example, you can have a 10% profit margin on one thing and a 25% margin on another. It depends on what you offer and what it costs you to provide it.


My challenge to you is to have a profit figure in mind that you want to keep every single month.  Next step is to create a plan to get there. For example, if you want to make $1,000.00 in PROFIT (not income) what do you have to sell, and how many, to see that figure? Having profit in mind and not just income will give you the money you need to expand and grow and turn your business into your vision.


You can find information on each of these steps inside the Facebook group: Stacking the Financial Deck and in the First Steps to Profit Course which is available for a limited time for $27.00.

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