Updated: May 17
Oh, What a Feeling….
I understand the feeling completely. You feel like your hair has electricity running through it. All-day long until you go to bed it is the only thing that runs through your mind. When you wake up it starts all over again. Your neck hurts, you’re grouchy, and can’t seem to smile. I can still feel the tension, the anxiety that never-ending pit in your stomach. The question looms: How am I going to my bills? I am broke.
It's no secret. This is a hard game we play for many. Seems like only a handful around us make it to the big leagues while many others struggle and fade away. Some are mega-producers and start teams and some can’t sell an umbrella in a rainstorm.
But why do you think that is?
There can be several reasons really. But one thing I know is that one of the reasons is a lack of business management experience and with that comes a lack of financial literacy. Sure we all understand spending money but as a business owner, which you are, it is vital you understand the flow of money within a business.
Taxes and business expenses equate to about 50% of the take. Failure to understand this concept will slowly back you up like. Like 1 log getting stuck. Then another, then another until you have a full-on log jam and you are screwed.
It is the same thing with credit cards and taxes. They do suck but they do exist and you need to make sure that those things are accounted for first and foremost. Otherwise, you find yourself in debt and that place stinks. The stress that comes with that. The extra 3500 a month for credit card and tax payment. Where if you were a little disciplined in the flow of money you would have that accounted for.
Playing catch-up stinks but it is possible to get back to even. And when you do, put safeguards in place so that never happens again. It might require that you skip a few nights out a month or maybe skipping a 3 day weekend here or there. But you are capable of doing it.
Some believe that another market correction is in our near future so do you want to have money in the bank, no debt, and survive the correction or do you want to HAVE to bust your hump twice as much just to make it. Maybe even need to do some BPO’s to buy groceries.
No thank you. Start to get into a habit of putting away 25% for taxes. If you owe it will not be greatly more and if you get a refund then rejoice. Put some money 10-20% away for business expenses. Put 10-20% away for savings. That which is left is income. Change the whole way you look at things. Focus on your savings goals and reverse engineer your whole year based upon it.
I know it is uncomfortable first hand. I had that journey myself so I can relate to any pain. But shift your thinking. Now that you know you only get 40-50% to the bottom line, make your business plan and goals around that number. Many of the agents I coach have become financially literate and understand this and that is why they set higher goals. You can’t make $150,000 Gross and live like you make $150,000 net.
Strive to have at least 3 but try for 6 months of reserves. I put 20% of each check away into a reserve account. When that equals 1 month I transfer to my main savings account. I continued to do this until I reached my savings goals for the year. If I am able to stash 3 months away every year then after 4 years I have 1 year banked. Adjust for your goals and lifestyle. But basically, after 12 years I have 4 years of bills saved in that one aspect.
This does not include any retirement strategy that I have. That is another discussion. Look at retirement as long term and your rainy day/savings strategy as a get-out-of-jail-free card. It is there for emergencies, slow market, goose egg. Plan enough to have it but hope to never use it. This actually reduces stress since it removes the never-ending need for the next sale.
Caution: Do not think for one minute I would ever slow down. That is why I have goals and I will not rest until I hit those goals. That is why I track my business so I know where I am at any given time. What are you doing to track your business? You must track it. There is not a successful company out there that does not track its business.
If you want to stop feeling that pain. If you want to stop that anxiety and stress put actionable goals in place now. These include not just financial goals but also a financial blueprint on how they will be achieved. A simple spreadsheet that shows what you need to accomplish. Where money is to be allocated. Then plan to do it. Put it into action and have the discipline to follow through and do it. By tracking the results you build accountability and it is that accountability piece that is missing in failed agents.
Be Accountable. Be Successful.
Till next time,
To learn more about Explore My Town Visit
Watch the training on Where 70% of Your Business Comes From