Tag: protection

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Most of my clients have lasting results with the money changes we make. But what makes some clients more successful than others? I don’t judge success by dollar amounts of debt paid or profit made. Some of my most successful clients had overall smaller dollar changes.  I judge success by my clients reaching their financial goals, staying protected at their income milestone, paying themselves and having great job satisfaction. If my clients can remove the stress and uncertainty that can come up around money, I call it a win.  But my most successful clients all have three qualities about them that made them “extra” successful.

1 – They have a money goal and a purpose for the money.

My most successful clients have a money goal. Saving to buy a building, leave the 9 to 5 job, open a day spa in 3 years are all examples of my client’s goals and purpose for a set amount of money. These goals aren’t fuzzy. They know how much they need, and they have a timeline to make it. If they don’t start that way, they get it when we work together. If your money goal is “as much as possible” or “as much as I need to cover overhead” you likely don’t have the same laser focus to create and make money as my most successful clients do. The truth is, if you aim at nothing, you’ll hit it every time. You need to define and write down your goals with a plan to reach them. Not that plans can’t grow, change, and evolve, but if you don’t start with one at all you aren’t going to be able to really measure your progress.

2 – They take immediate action to control their money.

They opened the holding account, they took the utilities off autopay, they started tracking income every day. Some of my clients have done those tasks the same day we have our session! Keeping their laser focus on the goal they take quick action and have wins immediately. I have seen less success with entrepreneurs who are slower to make necessary changes. The motivation to get it done quickly goes away, and often only about half of the recommendations make it into the business. They may pay their expenses intentionally, but they don’t make the time to create a monthly spending plan (budget). My most successful clients commit to making changes with their money quickly, one step at a time, and they follow through right away.

3 – They celebrate every financial win and use them to stay motivated.

Let’s face it, saving 5 years for a building can get a little boring. Every $200.00 deposit seems tiny in the face of the price for a building. But my most successful clients celebrate every single win, whether it is a deposit into a building fund, or a payday when they proudly sign both the front and the back of their paychecks. Staying motivated can be difficult sometimes, and we all have to deal with the sometime lack of motivation. Celebrating the little things brings joy into the progress, not the end state. If you aren’t celebrating and doing a little dance after every sale or payday, I challenge you to start today. Find a small money win and recognize it with gratitude.

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 Many people find business tax stuff difficult, and for the most of my clients it is a matter of organization.

Using these four categories of information, you can set yourself up to make taxes in 2021 stress-free.

 

  1. Track all of your income this year in a single place.

Some people like to use software, some like excel sheets, some get reports from PayPal for example, and some use good old-fashioned pen and paper. You need to account for every dime coming in, and it’s best to look at it month by month. I meet way too many entrepreneurs who don’t actually track the money coming in.  They just set expenses up on auto pay and use a credit card to cover any negative cash flow. The issue with this approach is that you can’t track trends or opportunities to make more money. It further makes quarterly tax deposits a pain. I recommend to my clients that they take 10-15 minutes every week to figure and track that gross income number.

 

2. Keep your routine expenses organized.

You need to keep everyone and everything you pay every month in one place. This serves two purposes. First, you don’t forget to pay something, and you have all of the info at your fingertips if we need to contact a creditor. You can get a free expense organizer from me by visitinghttp://entremoneycoach.com and you will have everything ready to go in about 30 minutes. As a bonus, complete the Breakthrough Number worksheets, you will also know the minimum amount you must make every month to breakthrough to profit.  That B-Number has the added bonus of reducing stress and frustration around your expenses.

 

3. Organize your other receipts by month.

Just take an envelope and write the month on the front. Every expense receipt for the month goes into the envelope. Then the receipt amount and purpose of the expense goes on your monthly tracking sheet. If you buy ink for the printer, for example, write “ink” on your tracker, and put the receipt in the envelope for the month. That’s it! At the end of 2020 you will have 12 envelopes with every expense and 12 months of tracking. This can be used to spot trends in costs and other things that you can use for business planning, as well as for filing taxes.

 

4. Enroll in EFTPS and deposit your self-employment taxes online.

Take the time now to enroll in the Electronic Federal Tax Payment System at https://eftps.gov Once you are enrolled you can log in every time you write yourself a paycheck and deposit your taxes. Rather than making quarterly deposits (and perhaps accidentally spending the money), make your smaller deposits, perhaps every time you write yourself a paycheck.  For tax time 2021 you will just print out a summary of payments to the IRS and include it in the documents you give your accountant. Easy peasy.

 

By taking these few actions above, and consistently tracking your income weekly and your receipts once a month, you will be organized and ready to provide everything to your tax pro in 2021.

 

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I am a multi-passionate entrepreneur. Across the businesses I am a teacher, coach, and cheerleader, but my businesses are very different and have very different audiences. I teach and coach entrepreneurs with their money and strategy, I tutor and coach non-traditional law students through school and the bar, and I teach ballet, tap , and jazz one day a week. And I am passionate about each one of my ventures. I know there are some of you out there who are just like me. I wanted to take a minute and support you by providing a few tips and tricks for balancing the finances across entrepreneurial pursuits. We will start with the “rules.”

 

Rule number 1: Every venture is different; you must separate your finances. Period. I have accounts for each business. I have check books for each business. I go so far as to have Stripe for one and PayPal for another to process payments. The money is earned in different businesses. By using PayPal, I can also “park” the money until I need to transfer it. No co-mingling. I keep everything absolutely separate. So should you.

 

Rule number 2: Expenses are different and should be tracked for each venture separately. This is as easy as putting all the receipts in a different folder, one for each business. Make sure that you pay the right expenses from the right account. Another benefit of PayPal is I can send money directly from the business account to pay expenses. You can set up the same for your businesses. Keep them separate.

 

Rule number 3: Taxes are separate in each business. You must pay the self-employment taxes on each venture. If you are a sole proprietor in the US, you will have one EIN if you are operating with your own social security number. You can make a single tax deposit online to cover the taxes for all three, but you must keep withholding separate in your tracking. You must file a “Schedule C” every year for each business that you own as a sole proprietor on your taxes.  If you are an LLC, Limited, Corp or any other structure you must absolutely deposit your own taxes but let your accountant do the K-1 filings at the end of the year.

 

It doesn’t have to be complicated for the multi-passionate entrepreneur. I sit down and handle each business separately and in turn. I have a written spending plan for each, and the B-number that goes with them. I spend less than 1 hour a month on the financial planning and management of the companies.

 

How to do it:

 

  1. Have Your B-Number. Know your B-Number for each business separately and have a written spending plan for each. I’ll say it again, know your breakthrough numbers and have a plan for the money in each business. If you need to calculate your breakthrough number get the free workbook at entremoneycoach.com. This step will save a ton of stress and crazy. You know what you need to make, what you need to pay, and where your money is going.

 

  1. Use color coding. I have different colored folders for each business. I mark receipts as I have them and place them in the correct folder by color. To avoid payment errors, I have checks in different colors with a little icon in the corner. Color coding keeps everything easy and organized. You can find different colored folders at any office supply store.

 

  1. Delegate what you aren’t good at, or don’t like to do. Stay organized with a virtual assistant, bookkeeper, accountant, etc. The actual bookkeeping for my businesses is very straightforward, and I don’t do it, and it takes less than 3 hours a month for all the businesses. I only manage the income and planning.

 

  1. Always have a plan for your money. Don’t let your money run off and spend itself. Know what each business’s income is for. Your money every month needs to have a purpose. You may decide to take a salary from one business, with the intent to use the money to grow a different one. Have a plan, withhold your taxes, and use your money strategically.

 

I celebrate multi-passionate entrepreneurs like me and understand that being organized can sometimes be a challenge. But take these few steps above to make managing the finances across multiple businesses easier. Happy entrepreneruing!

I’ve developed the concept of the business 4 walls from the Dave Ramsey 4 Walls approach, which makes sense, since I started my practice as a Ramsey Financial Coach. Imagine the 4 walls are the sides of a box, and you will consider the things on the inside of the box more important and needing protection than things on the outside of the box. That is how you need to view your business. You need to protect the things that keep the doors open and keep you able to continue to make money. The inside of the box.

We protect those walls by prioritizing what gets paid when. You control the money. You also decide who gets paid, “how much” because the reality is that many times businesses have to juggle when invoices are paid late, or cash flow is tight. More than once I paid the electric bill in two halves instead in one payment when we first started UNEQ consulting. And it saved our cash flow.

Here are three simple steps you can take now to secure your business 4 walls.

1. Take the bills off auto pay. I am a huge proponent of intentional business money management. I want you to pay your bills intentionally. And limit electronic access to your operating account so you can control all of your money, and pay halvsies if necessary.

2. Prioritize your expenses. Organized into the four walls, you pay the bills in this order:

Wall 1. Rent or internet, and utilities, your access to your buyers
Wall 2. Critical Operating Expenses that are required to keep doors open
Wall 3. Inventory or products to sell or provide services with
Wall 4. Payroll and payroll expenses

This includes paying yourself. And not out of the till, writing a paycheck and withholding taxes. For more on this approach, and calculating your B-Number, grab the free e-book at www.entremoneycoach.com

3. Start an emergency fund. You need to protect your four walls and pay these expenses every month, even if the sales are slow or money is late to the table. This is the quarter where many businesses make a bulk of their earnings. Hold some back for the slower months of January and February. Try to hold back the amount you need to cover your four walls, so you continue to be able to get a personal paycheck in 1st Quarter 2020.

If you take these few steps you will be protecting your business, your ability to make money, and your personal income.