We've reached the halfway mark through 2020. Can you believe it?
Which makes now the perfect time to check in against your plan for the year. Is your financial garden growing?
Whether you set a budget or not, I’m guessing you had some thoughts on how much money you want to bring into your business in revenue and how much you’d like to take home from your profit bucket over the rest of the year.
It can be easy to get distracted by new ideas or by worries about the future these days.
All of which are totally normal reactions to life as an entrepreneur…to say nothing of the unprecedented upheaval we’ve seen this year.
But does that mean you need to scrap your original plans? I say no.
So let's take a minute to look at where you stand financially.
Have you earned 50% of your targets yet? If not, why not?
Do you have plans to make up the difference so you can stay on track by the end of the year?
If you can’t see an alternative plan, does it make sense to alter you goals? If so, do you also have plans to reduce your expenses as well?
What does your worst case scenario financial plan look like?
One way to ensure financial security is to create a baseline, better, best version of your projections.
It’s easy to do, just remember our basic financial equation: Income – Expenses = Profit.
To project your baseline plan, consider what you minimum income might be (number of new sales x average fee). Consider your baseline expenses (i.e. anything you’re committed to that can’t be renegotiated or changed). Look at what’s left over, including setting aside 30% of your profit for taxes. How much is left for you? These are your baseline calculations.
For your “better” projections, recalculate your numbers with a reasonable amount of additional income and any associated expenses. Once you run those calculations, you’ll have your next level of goals.
And for your “best” version, consider what your numbers look like if all goes particularly well.
Giving yourself parameters like this makes it much easier to navigate any financial ups and downs.
Often, when we start looking at our actual baseline needs, we realize that our goals are entirely achievable. It can turn things from feeling overwhelming to being exciting to move forward. Even in a time like this.
And who doesn’t want a little more confidence in their life?
The Bottom Line
Measuring your growth – even when it’s small – is key to your overall business success.
So tell me…what are your numbers telling you about where you’re at and where you might be able to go for the rest of the year?