How to actually plan your quarterly income.
Small business owners often have to wear many hats, and one of the most important is that of a financial planner. You need to know how much money is coming in and out; to not just set goals, but to also be able to plan for growth, and to pay yourself! In order to ensure your business is on track for success, it is crucial to have a solid plan in place for your quarterly income. Here are some tips to help you get started:
Set realistic financial goals. Before you can begin planning, you need to know what you are working towards. Consider your current financial position and what you want to achieve in the next quarter. I’m a big fan of BIG HAIRY AUDACIOUS GOALS, so I’ll never tell you to set your sights lower, but I will encourage you to know exactly where you are, so you can get to where you want to be.
Create a budget. Once you have your financial goals in place, it’s time to start creating a budget. This will help you to identify areas where you can cut costs and invest in growth. If you’ve never done one for a business before, I share the exact spreadsheet that I use HERE, which also walks you through determining how much you need to sell to hit your monthly goals.
Track your income and expenses. Keeping a close eye on your income and expenses is key to staying on track. Use a spreadsheet or a budgeting app to help you stay organized. If you’re overwhelmed with where to start, I recommend printing out your last three months of bank statements and sitting down with two highlighters - one for incoming and one for outgoing.
When you can see how much is coming in every month, and how much is going out, now you can PLAN: Do you need to sell more of something to hit your goals? Cut expenses somewhere? Do you have the cash flow to invest in something else that will help your business soar? When you have cash flow knowledge, you can make a plan and then execute it.
Review your progress. Set aside time each month to review your progress and make any necessary adjustments to your plan. This will help you stay on track and make sure you are on track to reach your goals. I do this as part of my Monthly CEO Day but also do a quick review weekly to update my spreadsheet and catch any errors that may have been made.
Seek professional advice. If you need additional help, don’t be afraid to seek out professional advice. A financial advisor or accountant can provide valuable insight and help you make informed decisions. I have a wonderful accountant that helps me with taxes, and a financial planner who works with my husband and me to make sure our plans for financial freedom are on the right track! Ask your circle for recommendations, and interview several people before choosing the right person for you.
By following these tips, you can set yourself up for success by creating a solid plan for your quarterly income. By setting financial goals, creating a budget, tracking income and expenses, reviewing progress, and seeking professional advice, you can have the confidence to make informed decisions and take your business to the next level. Knowledge is power, my friends!