You pour your heart and soul into running your creative business and want to feel the benefits of it. Whether that looks like spending more time with loved ones or funding luxury holidays, taking a strategic approach can go a long way to getting the things you want out of your business.
Think about what you want and craft your business around it.
Take a step back and think about what you really want to get out of life. Even if you’re not exactly sure how to achieve your goals, write them down.
If your dream is to buy a house, we can plan the best way to set aside the funds you need. If you want to have more time with your family, we’ll look at introducing systems that let your business run smoothly when you’re not there – so you can take every Friday off.
Remember: your business should serve you, not the other way around. No matter what you want to achieve, with the right planning your business can act as a vehicle to get you there.
Don’t succumb to “shiny object syndrome”.
We can’t deny seeing money hit your bank account is a thrill. However, when business owners start generating good revenue they can be tempted to rush out and buy everything they’ve ever wanted. They often forget to factor in the cost of paying suppliers, staff and other overheads.
Keep in mind your bank account figure isn’t an accurate reflection of how much money you _actually_ have. It doesn’t factor in upcoming expenses or money owed to you. For the most realistic figure, ask your accountant for monthly management accounts. They contain a wealth of information to help you understand exactly what you can and can’t afford. To make sure your business can sustain your lifestyle, always have one eye on the numbers and look at what’s ahead.
Work out what you can realistically afford.
To get an idea of how much cash you need to live the life you want, work out how much you’d need to fund it (while being as realistic as possible).
If your lifestyle demands more cash than you’re making, it just won’t be sustainable and your funds will deplete over time. It doesn’t mean you have to pinch pennies, though! You might have to put buying a Ferrari on hold for a few years, but you can still go on your dream trip to The Bahamas. Before diving into anything, spend time looking at what you can realistically afford so you’re not living outside of your means.
Distinguish between cash flow vs profitability issues.
We often see business owners thinking they have a cash flow issue, when in reality it’s down to an underlying problem with their profitability. If you’re experiencing cash shortages on a regular basis, you need to increase your profit levels to be able to meet costs.
By misinterpreting the problem as a cash flow issue, you could be drawing out more cash from your business than is sustainable. There will be times when your cash flow is impacted by clients paying invoices with lengthy payment terms, but always consider how you can combat cash shortages by increasing profitability.
Be smart about the work you take on.
You don’t have to accept every project that comes your way. Take time to consider what will and won’t benefit your business. Just because a task has a price attached to it doesn’t always mean it’s profitable!
Let’s say you take on a video editing project. It might seem like a simple task off the bat, but after some digging you find it requires far more hours than expected. It drives down your profitability, takes up valuable time and ultimately it doesn’t make sense to take on the work without charging an accurate amount for it.
Turning down work can feel odd, but being able to say “no” at the right time will mean you can also say “yes” to the right things. You’ll establish your business to only accept the most lucrative and enjoyable projects, making it far more worthwhile.
Bring on a solid accountant to get there faster.
An experienced accountant is one of the most valuable investments you can make in your business. From freeing up your time to finding new ways to increase profit, we make sure your business gives you the things you want. Let’s make it happen: Fill in our contact form to get started.
