I truly believe budgets keep you broke by keeping you small.
The reason for that is that a traditional budget starts at “how much do you want to spend” and then you need to divide that amount between various business activities, and hope that your business grows. You have limited what you will accomplish by what you have decided to “spend”.
Now I am not by any means encouraging you to just go out and spend money without any plan or strategy, in fact just the opposite, a cash flow plan is crucial if you want to increase your profits.
However you need to plan your cash based on the results you want to create in your business, not the other way around. A mistake I see so many entrepreneurs make is they say “I know I need that but I will wait until I have the money” – that thinking and action will limit your opportunities to create and make more money.
You need to know what your business needs and then to strategically plan for it.
In order to grow your income, does your business need:
• More clients
• New programs or product offerings
• New equipment
• To add team
Once you have that goal established, set a timeline as to when you want it done. You don’t have to do it all right away. But having a “I will do this, by then”, really helps to put you into action to make it happen.
Once you have created your own deadline, determine the time, materials, supplies and other resources that will create the results you want to achieve. Then you can figure out the cost and what financial resources you need to create and earmark so you can accomplish your goal.
Would an example help?
Taking the first goal in the list above of more clients there are 3 ways you can approach this.
1. Just go out there and do whatever it takes to get clients and worry about the cost later, and hope it will pay off at some point.
2. Budget a fixed dollar amount for networking and client generating marketing activities and then see how many new clients you get, or,
3. Decide how many new clients you want, then assess your conversion rate so you know how many people you need to reach and how often you need to network, then determine where your ideal clients hang out and then choose those events. Then use the cost of those events to determine the financial resources you need.
The first approach gobbles up your money and available credit and time faster than you can blink. The second approach limits you to the results you will get by what you allow yourself to invest. The third approach encourages you to decide the outcome you want, and then has you strategically plan and allocate the resources you need to get you there!
One approach leaves your results up to luck, the other approach is based in “no”, and the final approach is all about possibility. Which do you prefer?
Editor’s note: Nafissa Shireen is hosting Feminine Business Mastery: Discover Your Unique Path to Six Figures & Beyond on February 27th, 2015, in Vancouver, BC.
With 25 years' experience leading 6-figure to 9-figure companies, she strategically partners with entrepreneurs to help them focus on sustainable & scalable business growth, so they can create a highly profitable and luxurious business and life.
Passionate about helping women earn what they are worth and build their wealth, so that they can realize all of their dreams and desires. She brings together her vast business knowledge with the deep inner work needed to help entrepreneurs identify blocks, step out of fear and overwhelm, raise their wealth consciousness, and move forward towards their goals with measurable, tangible results.
She is a featured Expert and regular contributing author for Today’s Innovative Woman Magazine, and is profiled in Canada’s 2014/2015 Distinctive Women Magazine