owner's pay Archives - Solopreneur Profit Coach |

Is Your Business Serving Your Life, Or the Other Way Around?

As a business owner, it can be tough to make sure you don’t get caught up in the hustle all the time. I’ve worked with many business owners whose businesses were definitely the main center of their time and attention, but who weren’t really getting their needs met that way. This is really unfortunate to see, yet so common. Today, I’m going to walk through an exercise you can use to evaluate whether your business is serving your life, or the other way around, and then suggest some next steps. Let’s dive in:

Reflect

To evaluate whether your business is serving your life, or the other way around, there are many different questions you can ask yourself. I recommend setting aside at least 20 minutes to reflect on a few of these questions. Pick whichever call to you:

How are my needs being met by my business?
What is my primary emotion while performing business tasks, and why?
What needs are being fulfilled by my business? Which are not?
Do I gain anything by running my business? Do I miss out on anything?
Is there balance in my life between all the different roles I play (ie. business owner, friend, partner, etc.)? Which role do I spend the most time in?
What are my goals in life? Is my business helping me get closer to reaching them?

Re-evaluate

Once you’ve sat with those questions, you will have a clearer idea on where your business might be running your life. Balance between your business and other parts of your life might be out of whack, or maybe you simply aren’t getting paid enough. Now that you’ve acknowledged the issue at hand, it’s time to re-evaluate. Ask yourself, “How can I re-orient my business so it serves my life?” Start thinking about and researching new strategies you can use to close the gaps between your needs and what your business is providing.

A couple pointers for inspiration: if you feel like you’re not getting paid enough, check out my article on considering your hourly wage and my article on creating an owner’s paycheck. Another good place to look for solutions is my series on money-mapping.

Take Action

After you’ve researched and thought through strategies, it’s time to take action! Your business doesn’t need to run your life. Acting decisively to end this cycle will only help you. Whether it’s opening a separate account or deciding on a day every week where you look at your numbers, any action you take is a step in the right direction. If you work well with an accountability partner, you might enjoy my profitability coaching services. Feel free to schedule a call with me to see if we’d be a good fit.

Angela

The In-Depth Guide to Mapping Your Money, and How It Can Fortify Your Business, Part II

Last week, I talked about money-mapping, why it’s helpful, and how you can get started. Today, we’re going to dive into more money-mapping using the Profit First methodology. Profit First posits its own money system, pictured in the above map. Its goal is to ensure that you as the business owner get paid.

Solopreneur Paycheck

In order to ensure that you actually get paid by your business, you need to portion off a certain percentage of your income, and then designate that for your personal finances. This portioning off is exactly what the Owner’s Pay account is for in the Profit First system. The Profit First system advocates for creating separate accounts for all your different pots of money associated with your business. If you can’t do that or don’t want to, I advise using a spreadsheet. You can use this to keep track of how much money is designated for Profit, Owner’s Pay, Taxes, and Operating Expenses.

So, back to that Owner’s Pay Account. Once you put a percentage of income in it, you then transfer some portion of that to your personal account, which serves as your solopreneur paycheck. When I work with clients, we work to figure out what portion should go into this account. That amount depends on how much the business makes in revenue, and what portion of their personal expenses they want to cover using income from their business. If income in their business varies month to month, we decide on an amount that they transfer to their personal account, leaving the leftovers to act as their cushion during slow months. This way, the business owner receives a steady stream of income, even if their business varies from month to month. This is the solopreneur paycheck.

The Function of Profit

Cordoning off funds for operating expenses and taxes may seem practical enough, but the Profit account is what makes the Profit First system unique. The profit account accumulates and then is distributed quarterly. Business owners are encouraged to use their Profit Distributions to reward themselves for their hard work. This keeps the owner excited about and invested in the business. It also discourages any tendency to reinvest everything back into the business, or over-save. Rewards can range from a day out to charitable giving, to really anything you want!

In part three of this series, I’ll discuss what applying this model to your business can look like, and integrate all the info we’ve gone over so far. If you’re enjoying this and would like more, check out part one! You can also head to my services page and schedule a call with me. Money mapping is one of my favorite subjects. Come talk about it with me!

Angela