​How to Get Your Income Unstuck

How to Get Your Income Unstuck

As a business owner, you have to make sure that you are receiving your income regularly. This is a process that should be done with continuity so as not to be stuck on your business. With this, increasing your income will be done by being on the right track and deciding what will be the best for your business.

In today’s podcast episode, Annette will get us through your income and how to increase your take-home. Also, she will give further details about other expenses that you make on your business and Annette will share an exercise on keeping tabs on your money leaks.

Highlights of this episode:

  • Two important things you need to increase your take home
  • How to make sure your expenses are delivering a positive return
  • Why do you need to be consistent with your growth strategy
  • What do you need to do to get your costs under control

Resources:

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Introduction

Maybe you've had success for a certain period of time and feel like you've got to a level where you're butting up against the ceiling and just can't break through. In terms of revenue levels for many businesses that can happen at around the 100,000 a year revenue. It's often a big target for people and it takes a lot to get there, but once there, it can be really hard to know how to move beyond that. Because as we know, what gets us to one level in business will rarely get us to the next level. The reason is that it's often different things than you think,  that our triggers to unlock that next level. But I don't want to focus on the revenue level of your business, today. Perhaps I need to do a separate episode on that. In today's episode, I want to focus on the take home income, which can also get stuck even with growing revenue.  You can keep growing your revenue, yet your own personal take home income stays the same. And is often the case the unlock here is typically a mix of mindset and strategy. For those of you that are new here, my name is Annette Ferguson, I am CEO of Annette and Co, a UK based accounting firm. I am a chartered accountant, Profit First professional and growth consultant for small business. And please do make sure you subscribe to this podcast. 

What are the two areas that a business owner needs to be a master of? (Why is being a master of both necessary?)

So 90% of self-made millionaires do it in their own business. Not that you need being a millionaire as your target, but it does show how much more likely it is in a business rather than in a job to reach higher take home income levels. So it's really important to remember that as we are building our businesses, and I'm going to assume here that you are amazing at the job that you do, you are great at serving your clients and customers. And they say amazing things about you. But those things alone are not going to get your income unstuck, because in reality, there are actually two areas that you also need to be amazing at in order to increase your take home. The first is becoming a master at growing your business. And the second is becoming a master at cost control. One without the other doesn't work. If you're a master at growth yet not at cost control, then you never have more money to put in your personal income. Every time you grow your business, the costs increase in alignment, and there's never any extra. And if you're a master at cost control, yet you haven't mastered the growth of your business, then that can only get you so far. And whilst you might be able to nudge up that personal income ceiling just a little bit, you won't be able to move it significantly without being a master at growing your business as well. What that means is studying both areas in depth really is key. And of course, we don't just mean studying them, I mean, implementing what you learn as well. Setting aside time for both things every single week is essential. And by the way, that does not mean spending a lot of money on courses and programs. Remember, mastering of cost control is an incredibly important part here. 

So on that subject if you haven't already, I highly recommend that you read Profit First by Mike Michalowicz. You can get the PDF copy by going to annetteandco.co.uk/pfbook and the link for that will also be in the show notes. 

How to do the money leaks exercise so that you become a master of cost control?

But in getting your costs under control, I highly recommend you do what we call our money leaks exercise. What that involves is gathering together all your business bank credit card statements anywhere where business spending is happening. And I'm going to describe this to you as if you have the physical paper copies because that's how I like to do it, but you could do this electronically with CSV files as well. So gather together all your statements and gather up a highlighter and a red pen at the same time. And firstly, I want you to go through every single expense item line by line, by line, item by item,  page by page, month by month and ask yourself this one question. Is this expense 100% necessary to keep the proverbial lights on in my business? If the answer is yes, it is 100% necessary, not 80%, necessary, not 90%, not a nice to have, 100% necessary, then you can highlight that expense. And you go through every single page and every single line. And then once you've done that, you can flip your pile back to the start again, pick up your red pen, and probably a cup of tea. And then ask yourself this question as you go through every single item again, and ask yourself, 'Is this spend delivering me a positive return in terms of money, or time in my business?' So the money I'm spending on it, 'Is it delivering me more money back? Or the time I am getting back from this spend, am I using that to generate revenue in my business?' And if the answer is yes, it is being delivering you a positive money or time return, then you can circle that expense. Now, some items will be circled, some will be highlighted and some will have no markings beside them at all once you've done this exercise. And the question I pose to you is those things that are neither circled nor highlighted, what is the purpose? Now typically, the purpose is that they are nice to have in your business, or in many cases can also be things that you've signed up for and forgotten to cancel. But in the case of a nice to have, whilst I am not saying you need to cancel all the nice-to-have in your business, the thing that you need to be aware of is that, the more nice to haves you have, the less money you have available for your own take home. So understand that if you want nice to haves in your business, you are creating 'your stuck take home' as a result of those decisions. And that's what I mean by becoming a master of cost control. So I urge you to go away and try that exercise. I also urge you to revisit this exercise quarterly in your business. Because as we know, as time goes on, we sign up for  things, we get to forget to cancel things, and costs can continue to spiral back out of control again. So keep on top of them with this exercise. 

Why is data analysis really the key in mastering the growth of the business?

And becoming a master of growing your business, that involves strategy. It involves choosing a strategy, being consistent with that strategy and monitoring the results of that strategy, then tweaking and adapting as necessary. So many business owners just try something for such a short period of time that they don't actually get any data and understand the full results of what they are trying. You need to try something, be consistent, and then analyze the data after the fact, to understand whether your growth strategies are working in your business. Doing a small launch once and not getting anywhere doesn't really actually tell you very much, unless you have tried and tested all of the different parts of say a launch strategy already. So consistency and data analysis really is key in this part for mastering the growth and the growing of your business. 

So this is how you get your income, your take home unstuck. Thank you so much for tuning in and joining me today. I would love if you want to subscribe on whichever podcast player you happen to be listening on today. Please do also leave us a review. Reviews are a massive help to the podcast. They help other people just like you find our podcast and that would be amazing if people can, because after all, we all want financial and lifestyle freedom. Thanks again for tuning in. And I will see you next time. 

Thank you so much for tuning in today. I hope you got lots of value from this episode. Now if you're struggling with any accounting things for your business, I'd love to help.  Make sure you reach out to me at podcast at annette and co do co dot uk, that's podcast@annetteandco.co.uk and let me know how I can help. Of course, remember to subscribe to this podcast as well. Thanks again. 

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About the Author

Owner of Annette & Co. - Chartered Accountants & Certified Profit First Professionals. Helping online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.

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