Money Management With No Excuses
Money Management With No Excuses
As in the marketing of your business, there are two aspects to the “pricing” side: How you deal with your own issues about money, and how you interact with your clients.
Until your own issues—such as payment terms and policies—are resolved, you can’t effectively begin to think about how those issues affect your clients. So, first about you.
How Do I Deal With My Personal Money?
Are you detail-oriented about lines and shapes, but fuzzy when it comes to money? Do you balance your personal checkbook, or do you just write checks and pray your balance stays above zero? Do you know how much revenue you need to generate in order to pay your bills every month, or do you just cross your fingers and hope enough money comes in? Are the numbers clear in your head, or is it all a blur?
For many creative types, money is an obstacle to doing business. “I’m bad with numbers,” is a common refrain and, frankly, a common excuse used to neglect essential business tasks like billing. Believing you are “bad with numbers” is often the excuse for ignoring situations that can imperil a business. (You know who you are.)
If your personal finances are not in order, your business finances won’t be, either. If you aren’t aware of your regular expenses, you won’t have a way to assess whether you can afford the next computer upgrade or the next employee hire, and you won’t know when and where to trim when you need to. Even if you hire someone to manage the financial aspect of your business, which you may be in a position to do, it’s important that you stay involved and aware of the big picture.
Your Money Mentality
One fundamental aspect of the financial end of running a design business is the mental attitude you bring to the process.
Which of these statements is most familiar to you:
“I can’t stand dealing with money.”
or
“This financial thing is a challenge, but I’m going to learn it and make it work for me.”
How about these:
“I can’t afford to spend money on marketing.”
Or
“What do I need to do in order to afford the marketing I know I need to grow my business?”
It’s up to you. You can choose between an open or closed mentality. Open is better and will facilitate the growth of your business. With this positive mental attitude as a foundation, you begin planning your future.
You Are in the Driver’s Seat: Planning and Managing Your Money
Your business is there to feed you, and feed you well, if you want. But there is a lot you need to know about your business in order to get the financials right.
Start by figuring out what you need financially. Then, go to your business and say, “Business, this is what I need.” You must be willing to do the work required to have your business deliver this to you.
Robert Kiyosaki, best known as the author of Rich Dad, Poor Dad, says, “Failing to plan is planning to fail.” When he talks about failing, he’s not necessarily talking about going bankrupt. Another definition of failure is holding yourself back or staying static, and this is often the result of a lack of planning.
Planning involves knowing what systems and elements you need to have in place, such as:
– The numbers. From a financial standpoint, you must understand a few simple numbers—your basic overhead (what it costs to run your business, including your hourly rate), your profit (what you earn over and above your expenses) and your budgets (spending projections based on revenue projections)—before you can start pricing a project.
– Bookkeeping, billing and collection. It’s essential to have a system in place so you can keep close track of where your time and money goes. (There is software to do that; we recommend Function Fox.) Everything that comes in and goes out should be documented. You may need a bookkeeper to come in regularly to do bookkeeping or billing, or at least to oversee what you are doing and make sure you’re doing it right.
– Business policies, payment terms and conditions. You are in the driver’s seat here. Don’t wait for your clients to tell you how to run your business. One of the benefits of being self-employed is that you get to determine how (and often how much) you want to be paid. You get to decide what to do when surprises occur, such as the cancellation of a job or twenty-five rounds of revisions. This must all be spelled out in advance and included in your contract.
– The paperwork. Memories are woefully inadequate, so don’t even try to rely on yours when it comes to the agreements you make with your clients. Instead, set up a simple documentation system with templates for proposals, contracts, estimates, letters of agreement, schedules, timelines and change orders that your clients will sign off on. This sets a professional tone right from the beginning of any business relationship. If you fail to institute this process at the outset, it’s much more challenging to put systems in place later on.
In order to set goals and determine a budget, you must work out not only what you need to earn, but also how that number translates into the number of clients you need, and how that translates into how much marketing you must do in order to achieve that.
In other words, how many proposals do you have to submit each month in order to make your numbers? How many calls (cold or warm) must you make to be asked for that number of proposals? How many prospects do you need in your pipeline in order to get that number of requests for proposals?
Without taking the time to work this out for yourself, it’s unlikely you’ll achieve your goals.
Plus, without this information, you won’t know when to step up your marketing, when to attend one more networking event, when to make a round of follow-up calls or when to send out an extra newsletter.
Money Management With No Excuses - To learn more about this author, visit Ilise Benun's Website.
Like this article? Share it with your friends
How Should I Manage My Money?
As in the marketing of your business, there are two aspects to the “pricing” side: How you deal with your own issues about money, and how you interact with your clients.
Until your own issues—such as payment terms and policies—are resolved, you can’t effectively begin to think about how those issues affect your clients. So, first about you.
How Do I Deal With My Personal Money?
Are you detail-oriented about lines and shapes, but fuzzy when it comes to money? Do you balance your personal checkbook, or do you just write checks and pray your balance stays above zero? Do you know how much revenue you need to generate in order to pay your bills every month, or do you just cross your fingers and hope enough money comes in? Are the numbers clear in your head, or is it all a blur?
For many creative types, money is an obstacle to doing business. “I’m bad with numbers,” is a common refrain and, frankly, a common excuse used to neglect essential business tasks like billing. Believing you are “bad with numbers” is often the excuse for ignoring situations that can imperil a business. (You know who you are.)
If your personal finances are not in order, your business finances won’t be, either. If you aren’t aware of your regular expenses, you won’t have a way to assess whether you can afford the next computer upgrade or the next employee hire, and you won’t know when and where to trim when you need to. Even if you hire someone to manage the financial aspect of your business, which you may be in a position to do, it’s important that you stay involved and aware of the big picture.
Your Money Mentality
One fundamental aspect of the financial end of running a design business is the mental attitude you bring to the process.
Which of these statements is most familiar to you:
“I can’t stand dealing with money.”
or
“This financial thing is a challenge, but I’m going to learn it and make it work for me.”
How about these:
“I can’t afford to spend money on marketing.”
Or
“What do I need to do in order to afford the marketing I know I need to grow my business?”
It’s up to you. You can choose between an open or closed mentality. Open is better and will facilitate the growth of your business. With this positive mental attitude as a foundation, you begin planning your future.
You Are in the Driver’s Seat: Planning and Managing Your Money
Your business is there to feed you, and feed you well, if you want. But there is a lot you need to know about your business in order to get the financials right.
Start by figuring out what you need financially. Then, go to your business and say, “Business, this is what I need.” You must be willing to do the work required to have your business deliver this to you.
Robert Kiyosaki, best known as the author of Rich Dad, Poor Dad, says, “Failing to plan is planning to fail.” When he talks about failing, he’s not necessarily talking about going bankrupt. Another definition of failure is holding yourself back or staying static, and this is often the result of a lack of planning.
Planning involves knowing what systems and elements you need to have in place, such as:
– The numbers. From a financial standpoint, you must understand a few simple numbers—your basic overhead (what it costs to run your business, including your hourly rate), your profit (what you earn over and above your expenses) and your budgets (spending projections based on revenue projections)—before you can start pricing a project.
– Bookkeeping, billing and collection. It’s essential to have a system in place so you can keep close track of where your time and money goes. (There is software to do that; we recommend Function Fox.) Everything that comes in and goes out should be documented. You may need a bookkeeper to come in regularly to do bookkeeping or billing, or at least to oversee what you are doing and make sure you’re doing it right.
– Business policies, payment terms and conditions. You are in the driver’s seat here. Don’t wait for your clients to tell you how to run your business. One of the benefits of being self-employed is that you get to determine how (and often how much) you want to be paid. You get to decide what to do when surprises occur, such as the cancellation of a job or twenty-five rounds of revisions. This must all be spelled out in advance and included in your contract.
– The paperwork. Memories are woefully inadequate, so don’t even try to rely on yours when it comes to the agreements you make with your clients. Instead, set up a simple documentation system with templates for proposals, contracts, estimates, letters of agreement, schedules, timelines and change orders that your clients will sign off on. This sets a professional tone right from the beginning of any business relationship. If you fail to institute this process at the outset, it’s much more challenging to put systems in place later on.
In order to set goals and determine a budget, you must work out not only what you need to earn, but also how that number translates into the number of clients you need, and how that translates into how much marketing you must do in order to achieve that.
In other words, how many proposals do you have to submit each month in order to make your numbers? How many calls (cold or warm) must you make to be asked for that number of proposals? How many prospects do you need in your pipeline in order to get that number of requests for proposals?
Without taking the time to work this out for yourself, it’s unlikely you’ll achieve your goals.
Plus, without this information, you won’t know when to step up your marketing, when to attend one more networking event, when to make a round of follow-up calls or when to send out an extra newsletter.
Money Management With No Excuses - To learn more about this author, visit Ilise Benun's Website.
Like this article? Share it with your friends
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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Stephanie RobeyStephanie Robey is President and CoFounder of Pivot Positive, LLC - an Internet marketing business focused on helping people start work at home ventures. Previously, she was employed at The Search Agency with over 20 years experience in graphic design and 10 years experience in online marketing. She was responsible for launching the Conversion Path Optimization (CPO) unit where she and her team have conducted hundreds of optimization tests for online companies across multiple verticals. She is a successful entrepreneur having started and sold 2 companies and remains on the board of directors of the third, PhotoSpin.com Stephanie began her career in the direct marketing realm creating and producing direct mail for many of the major cable television companies and directly attributes her understanding of Internet marketing to those early offline experiences. Stephanie is a graduate of San Diego State University with a BFA in Graphic Arts and also holds an Executive MBA from the Graziadio School of Business and Management at Pepperdine University. Read Steph's Blog Meet Steph and Dave Sign up for our Free 7-Day BootCamp: Self Employed & Rich - Visit Stephanie Robey's Website |
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