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If you have been paying yourself this year regularly, the next question is, “Are you ready to give yourself a raise?”

This week is the last week of June and marks the end of the first half of the year. Be honest, have you really been writing yourself a check every time I send an Entre Pay Day newsletter? If so, congrats! You have written 12 paychecks so far! If you haven’t yet started to make your paydays a thing, put them on the calendar and start this week. Even a $10.00 to $25.00 paycheck feels great and is a tangible reward for all of your entrepreneurial hard work.

 

If you aren’t thinking about a raise yet right now, that’s fine, but let’s define what the conditions are for you to go ahead and boost your own paycheck. You need something a little more concrete than, “someday” or, “next year” or the elusive “when we make more.” The six-month mark is a great time to plan our next salary move.

 

First, what calculation did you use to determine your current check amount?

 

Think back to when you first wrote yourself a check this year. Did you figure your personal four walls (food, utilities, rent or mortgage and transportation) as your first goal? Or did you take a percentage of your “goal” salary, say 40% of your desired $1,000.00 per week? Note how you came up with your current paycheck amount.

 

Next, try a bump up a bit to a percentage that feels good and is sustainable.

 

Go ahead, let’s play with the numbers. What does 5% look like? How about 10%? If you write yourself a  $500.00 net check every other week, what if you bump it up to $550? Remember to have a purpose for the money. So, take a moment and think about what you would be able to do with an additional $100.00 per month in this scenario? Hire a cleaner part time? Get a massage? How about that food order service you wanted to try? Or to pay a bigger chunk of the personal expenses if you still do the side hustle thing?

 

Don’t forget the bump in taxes.

 

Your business should be paying your taxes as well. In our example above of a $500.00 net check, the gross check that you write adds in the 25-30% that you deposit for self- employment taxes. If we add 25% to this example, the gross paycheck every other week is $625.00, with $125.00 for taxes and $500.00 for the next paycheck. Do a quick, back of the envelope calculation, and refigure the taxes and your new gross paycheck amount.

 

If You Don’t Start Now, Calendar your raise.

Maybe you aren’t quite ready to make this bump. But when will you be? Set a date on the calendar. Perhaps it is August 1st. Or maybe 4th Qtr. Whatever you decide, try not to let it go into next year. You want to relook your own compensation a few times a year as you are growing your business. Remember that as soon as you start writing that bigger check it is time to celebrate!

 

If you are struggling to pay yourself, or you are unsure if this is the right time for a raise, you may need to get more clear on your numbers and design a strong money strategy that encompasses the six pillars of business finance. The doors to Profit 101: The Creative’s Guide to Managing the Money are still open for our July 1st start. Visit https://entremoneycoach.com/profit-101 to get into the simple money management program creatives love.

Your brain likes to keep you safe. It likes to talk you out of doing things that are new and perceived as “dangerous.” Like opening a new business, meeting a new income milestone, or launching new products and services. If your brain doesn’t have a point of reference for the “new” thing you are doing it defaults to believing you are in “danger” and it takes immediate steps to talk you out of it. Putting doubts, fears, and sometimes self-sabotaging behaviors into your head. To make you stop. To keep you, “safe.” It’s all laid out in The Big Leap by Gay Hendricks.

 

It’s happened to you before. It has happened to all of us. You get a great new idea and immediately you think, “this will never work.” Or you have repeatable patterns of self-sabotage every time you are ready to launch something new into the world. It’s frustrating and confusing. Why does the brain work so hard to derail anything new? Even if the new thing is good for us, like making more money?

 

It’s actually quite simple. Our brains haven’t adapted to the fact that we aren’t physically in harms way when there’s something happening the brain doesn’t recognize. The ego wants to keep us in the status quo where it can predict everything, and nothing is going to harm us.  This is the part of the brain that watches for cheetahs chasing us.  And it hasn’t adapted to life today in 2020. But you can get past an upper limit problem. We need to get past the brains safety switch so we can level up past our previous “set point?”

 

First, acknowledge that this is new, and you know the brain is feeling fear.

 

Recognizing an upper limit problem is the first step. Paying attention to how you feel and what’s going on around you as you begin to do or attain something new and different is the first step.  Fear may show up in different ways, but the consistent thread is that your brain is trying to talk you out of moving forward and is making excuses for you not to continue. We’ve all done it, had those inner conversations that talk us out if ideas.

 

Second, reassure your brain that you are safe.

 

Give it a little attention and thank it for trying to protect you.  I thank my brain all the time, and remind it that I am safe, and that we are doing this thing. By paying attention and not ignoring it, the negative voices in my head do quiet down a little.  It is okay to feel scared when we try something new.  Anything new in our business may feel scary, and in many cases we are unsure of the outcome, no matter the projections and plans. Acknowledge it. Remind yourself you are safe.

Another trick is to trace and minimize the fear by asking, “what if (this negative thing) does happen?” and  answer the question. For example, “what if we don’t sell any?” then honestly examine the consequence. By answering the questions you give yourself a point of reference. By giving yourself a point of reference, the brain can calm down.

 

Third, do your thing. Just do it. 

Your brain will create a new set point as it experiences your new level.  As you try and succeed (or learn) different things, the brain adapts and knows “how” to do it, and it isn’t seen as automatically dangerous. 

I have my own upper limit problems. We all do. I tend to self-sabotage when “new” things are happening, and the business is readying to break through a level. In fact, as I write this, I am on bed rest from an odd back injury. I didn’t fall and don’t remember hurting myself, but I have a bulging disk in my lower back. Is this my body and brain telling me to slow down? I think so. So, I am going a little slower. But I am not quitting, which is what my brain really wants me to do.

 

Fourth, recognize the growth place and celebrate it.

When you grow and reach the next level, celebrate it. You’ve done it now, your brain has a frame of reference, you are not going to struggle to that level again. Congratulations on staying the course and growing into your next thing.

 

Finally, rinse and repeat.

Every time you come up against something new, scary, your “growth edge” you will likely have to calm your brain and give it reassurance. It is a part of growing and making permanent changes in your life. And once you are aware of them and take the steps to grow around them, your growth potential is limitless. Happy Entrepreneuring!

 

One of the first things many entrepreneurs do is to create their mission statement, vision statement, and values. These three statements anchor the brand, the business plan, the map for the business itself.  If you have never taken the time to define these things for your business, it’s definitely an exercise in clarity.

A surprising assignment.

I learned the importance of this exercise with UNEQ Consulting. We were late with this process though and we worked with an amazing business consultant to guide us.  Since that experience I have made a point to create these three statements for every venture. But I didn’t revisit them before now. Revisiting them was an assignment from my coach. 

I honestly never thought to review the “big three” statements once I got them written. I guess I always thought that was such a “corporate” thing to do. Not a small business thing. In reality, small businesses change and evolve and pivot and serve different audiences much more frequently than large corporations.

I had created this first mission statement back in October 2019 as Entre Money Coach was fully separating from my law practice and personal financial coaching business into its own entity:

“My mission is to empower and support entrepreneurs making powerful, positive changes to their money management approach, to protect and grow their businesses into the vision they were given, with understanding, enthusiasm, and without judgment.”

Niching Down

So much happened between October and March! I worked with many more people on their businesses. Through those clients I refined the process of calculating my signature Breakthrough Number approach to money management, so it was more streamlined. I definitely niched differently. I thought that start-ups would benefit from getting their financial sh*t together from the beginning, but I realized very quickly that these entrepreneurs were so excited about just, “being in business” that the money stuff hardly entered their mind. 

Rather the clients calling me were entrepreneurs who have been in business for a bit, and who are making money and not keeping much of it. This segment required much more strategy to create income and increase profits. It was less about “open your operating account” and more about, “we need to change this package because you are losing money on this.” The consistent results for my clients was that they made more money and kept more profit. Financial organization and positive changes to money mechanics were byproducts of my approach. Not the reason I was being called.

Time for a Change

So mid-March I revisited my mission, and realized a lot had changed. So, I refined it, taking into account all of the stuff I already talked about above. Here is the March 2020 version of my mission statement:

“The mission of Entre Money Coach is to help small businesses make more income and keep more profit with a money management approach that starts with their Breakthrough Number and prioritizes protecting the business and paying the entrepreneur so they can grow into their business vision. We do this with understanding, enthusiasm, and without judgment.”

Much more specific as to who and how. I plan to revisit it again in October. It’s already on my calendar to take time to review. If you haven’t looked at your statement in a while, or never created one at all, I encourage you to take the time to do it this week. Happy Entrepreneuring!

 

Most of my clients have lasting results with the money changes we make. But what makes some clients more successful than others? I don’t judge success by dollar amounts of debt paid or profit made. Some of my most successful clients had overall smaller dollar changes.  I judge success by my clients reaching their financial goals, staying protected at their income milestone, paying themselves and having great job satisfaction. If my clients can remove the stress and uncertainty that can come up around money, I call it a win.  But my most successful clients all have three qualities about them that made them “extra” successful.

1 – They have a money goal and a purpose for the money.

My most successful clients have a money goal. Saving to buy a building, leave the 9 to 5 job, open a day spa in 3 years are all examples of my client’s goals and purpose for a set amount of money. These goals aren’t fuzzy. They know how much they need, and they have a timeline to make it. If they don’t start that way, they get it when we work together. If your money goal is “as much as possible” or “as much as I need to cover overhead” you likely don’t have the same laser focus to create and make money as my most successful clients do. The truth is, if you aim at nothing, you’ll hit it every time. You need to define and write down your goals with a plan to reach them. Not that plans can’t grow, change, and evolve, but if you don’t start with one at all you aren’t going to be able to really measure your progress.

2 – They take immediate action to control their money.

They opened the holding account, they took the utilities off autopay, they started tracking income every day. Some of my clients have done those tasks the same day we have our session! Keeping their laser focus on the goal they take quick action and have wins immediately. I have seen less success with entrepreneurs who are slower to make necessary changes. The motivation to get it done quickly goes away, and often only about half of the recommendations make it into the business. They may pay their expenses intentionally, but they don’t make the time to create a monthly spending plan (budget). My most successful clients commit to making changes with their money quickly, one step at a time, and they follow through right away.

3 – They celebrate every financial win and use them to stay motivated.

Let’s face it, saving 5 years for a building can get a little boring. Every $200.00 deposit seems tiny in the face of the price for a building. But my most successful clients celebrate every single win, whether it is a deposit into a building fund, or a payday when they proudly sign both the front and the back of their paychecks. Staying motivated can be difficult sometimes, and we all have to deal with the sometime lack of motivation. Celebrating the little things brings joy into the progress, not the end state. If you aren’t celebrating and doing a little dance after every sale or payday, I challenge you to start today. Find a small money win and recognize it with gratitude.

 Many people find business tax stuff difficult, and for the most of my clients it is a matter of organization.

Using these four categories of information, you can set yourself up to make taxes in 2021 stress-free.

 

  1. Track all of your income this year in a single place.

Some people like to use software, some like excel sheets, some get reports from PayPal for example, and some use good old-fashioned pen and paper. You need to account for every dime coming in, and it’s best to look at it month by month. I meet way too many entrepreneurs who don’t actually track the money coming in.  They just set expenses up on auto pay and use a credit card to cover any negative cash flow. The issue with this approach is that you can’t track trends or opportunities to make more money. It further makes quarterly tax deposits a pain. I recommend to my clients that they take 10-15 minutes every week to figure and track that gross income number.

 

2. Keep your routine expenses organized.

You need to keep everyone and everything you pay every month in one place. This serves two purposes. First, you don’t forget to pay something, and you have all of the info at your fingertips if we need to contact a creditor. You can get a free expense organizer from me by visitinghttp://entremoneycoach.com and you will have everything ready to go in about 30 minutes. As a bonus, complete the Breakthrough Number worksheets, you will also know the minimum amount you must make every month to breakthrough to profit.  That B-Number has the added bonus of reducing stress and frustration around your expenses.

 

3. Organize your other receipts by month.

Just take an envelope and write the month on the front. Every expense receipt for the month goes into the envelope. Then the receipt amount and purpose of the expense goes on your monthly tracking sheet. If you buy ink for the printer, for example, write “ink” on your tracker, and put the receipt in the envelope for the month. That’s it! At the end of 2020 you will have 12 envelopes with every expense and 12 months of tracking. This can be used to spot trends in costs and other things that you can use for business planning, as well as for filing taxes.

 

4. Enroll in EFTPS and deposit your self-employment taxes online.

Take the time now to enroll in the Electronic Federal Tax Payment System at https://eftps.gov Once you are enrolled you can log in every time you write yourself a paycheck and deposit your taxes. Rather than making quarterly deposits (and perhaps accidentally spending the money), make your smaller deposits, perhaps every time you write yourself a paycheck.  For tax time 2021 you will just print out a summary of payments to the IRS and include it in the documents you give your accountant. Easy peasy.

 

By taking these few actions above, and consistently tracking your income weekly and your receipts once a month, you will be organized and ready to provide everything to your tax pro in 2021.

 

When the Breakthrough Number (B-Number) process was developing, I used it for the easy visualization of protecting the inside of your business four walls. It was first created to support a client who knew of the Dave Ramsey “7 Baby Steps” approach to personal finance. Each of the walls I identified for business helped her make decisions on how to spend money and to put processes in place for money management. Over time I continued to use the approach over and over and finally gave the process a name…

The Breakthrough Number

I know what should happen when people figure out their unique number. They should be more in control of their income. They will know their minimum monthly amount of money the business must bring in, reducing stress and uncertainty. Finally, they will see the wisdom of including their own salary in the business spending plan (budget).

What I didn’t foresee happening were these additional, unexpected benefits that came with working through the calculation process.

 

  1. More accurate wholesale costs.

I’ve worked with several business owners who forgot something, some small or easily forgotten expense that affected their profit margin. Running through each of the walls carefully uncovered things like the cost of blank labels and ink for handmade products. That cost was easily overlooked because it was under $25.00/ month, but it needs to be included because it affects the real cost to the business and needs to be recovered.

 

2. Finding hidden money and a chance to become leaner.

The first time this happened I was actually in an airport helping a friend run through the breakthrough number process. We were discussing her critical operating expenses and remembered that she had a service she paid for every month that she was no longer using! This service was about $100.00/ year. More than once I have seen clients eliminate or change services and expenses when they take a hard look at deciding what is critical.

 

3. More confidence in making strategic business decisions.

This benefit was sort of foreseeable in that I knew people could use the process to calculate different scenarios such as hiring new people or adding a service because they would be able to forecast the new expense’s impact on the money. But the way my client uses it to make decisions is quite surprising! She literally just uses her known monthly B-number amount to help her make decisions. Her breakthrough number is about $5k a month and included her personal paycheck. Anytime she wants to do anything different she looks at how much she made over her number that month and how much she has in the bank. She can then say, “Oh, this is okay, I made an extra $2k and I can still pay myself for 3 months.” That was her quick ‘back of the envelope’ calculation for hiring her part-time VA and a business coach. Amazing!

 

If you are still without your unique number you can get it today, right now for free.

Just visit http://entremoneycoach.com to grab your free worksheets. You will have your number in under 30 minutes! Happy Entrepreneuring!  

 

It is the last day of the first quarter 2020, and I wanted to share some numbers with you , statistics really, to show you just how special and amazing you are as an entrepreneur. Read these, and feel free to puff up a little. You take the ups with the downs and show up day after day. That needs some celebration.

So here are some stats about the beautiful group to which we all belong to:

 

  • 62% of US billionaires are self-made
  • In 2016, there were 25 million Americans who were starting or already running their own business
  • 60% of people who start small businesses are between the ages of 40 and 60.
  • There are 582 million entrepreneurs in the world.
  • The Small Business Administration (SBA) also reports that 1 in 12 businesses closes each year.
    • 5% of small businesses fail within the first year.
  • More than 70% of all small business owners ranked their happiness level higher than 5 on a scale of 1 to 10
  • From 2000 to 2017, small businesses created 4 million net new jobs
  • Currently, 9 million people are employed by small businesses
    • This is a 1.1 million increase from 2016. This currently makes up 47.8% of U.S. employees
    • More than half of small business employees say they feel happy with their job
  • 64% of small businesses currently have a website

For the Ladies:

 

Pretty great, right?

Print this article out and keep it somewhere you can see it on challenging days. Every day you get up and show up to serve you are a Rockstar. Thanks for bringing your passion project to the world.

Happy Entrepreneuring!

  1. Not separating Business from Personal Accounts. You must have a separate financial identity for your business, even as a solopreneur or freelancer. Keep your money separate and write yourself a paycheck from the business. No living out of the till. Use a fee free checking account for all of your business income, and pay your expenses, including your paycheck, at regular intervals from that account.

 

  1. Immediately Making Large Purchases for the Business. Often these large purchases are made on credit, putting the business immediately into the negative with debt. Do you need that new computer right now? How about that website? All of those services? Keep the business lean by purchasing only the necessities. Know your B-Number to determine the amount of money you need to make based on prioritized expenses and put large purchases on hold until you have the cash.

 

  1. Having too Much Personal Debt. Personal income is often dipped into when businesses are first starting. Until the income really gets going, it’s not unusual to pay for certain expenses from personal funds. Having a large personal debt load means less money available for business expenses if needed for perhaps a marketing funnel or to pay a large expense that comes up. On the other hand, if you are relaying on your business to pay all of your bills, personal debt means more money needed from the business, and less money staying in the business for growth or new launches.

 

  1. Not Saving for Emergencies and “Down Times.” Business is cyclical. It just is. Income will be variable, particularly in new businesses who are starting to get visibility and a steady income stream. It is always a good idea to keep an emergency fund on hand- set aside into a free checking account for those months where you don’t make enough to pay those B-Number expenses. Some advice for starting and funding an emergency fund can be found here.

 

    1. Not Having a Clear Spending Plan for Your Business. Money can easily run off and spend itself when your business doesn’t have a spending plan. Always starting from the B-Number, where is any extra money going? You may get by for a bit, but having a plan ensures you can afford to take certain steps in your business. Taking 45 minutes a month to map out upcoming expenses or expansions and what you plan to spend where. If you need accountability or help with your plan, go ahead and check out our Business Money Planning Group.10

When I was at a conference in San Diego last month, I had an epiphany about most new business owners and their business money stuff. Typically, when I work with a family on personal financial management there is a history of making financial decisions that became habit. When we work together, we have to often change years of money habits so my clients can reach their goals.  Business money management is different. Entrepreneurs are not generally “taught” how to manage their money. Rather than a habit to change, there is some learning that needs to happen.

 

In personal finance we are generally dealing with a set amount of money that consistently comes into a household as a regular paycheck on regular intervals. So, we can start from the income. Knowing how much you have to work with makes planning easier. You know how much it will take to cover all of your expenses.  When we have a deficit, a second job can be a solution, and once again we adjust to the new income.

 

Business isn’t that way. You may have income in the first week of the month and nothing in the second. We may have extreme income differences each month, and we may not know how much we will have to work with when the month starts! This difference is what often leads to cash flow emergencies in business, and stress when you are running negative cash. You must know how much you need to make to cover all of your expenses, but you may not know exactly which week you will make what you need.  Business money management is more dynamic and requires at least a weekly look at how things are going. 

 

Here are three simple steps to managing your business income as it comes in, and to keep cash on hand.

 

  1. Know your B-Number. You must know what you need to make, and you must prioritize the B-Number expenses first. Pay these above all other expenses to keep the business operating and able to keep generating income. If you do not have it, get your free worksheets at www.entremoneycoach.com.

 

  1. Track your income as you make it. You don’t need to obsess over your money each day, I had a client who did that, and she never enjoyed being an entrepreneur. Just write down what you make every day you make money. For simplicity, go ahead and write the totals on a calendar the day it comes in.

 

  1. Pay your expenses when cash flow is positive. You can pay the bills weekly or bi-weekly but know when you have made your B-Number, and when you are funding other things such as marketing, debt, and growth. Other coaches may disagree with me, but I have held the water bill for an extra week to ensure that my cash flow was positive, meaning I had more left over after I paid the bill, and didn’t let it run dry. I tend to be a little nervous about not having cash on hand, so I wait until I have sufficient cash to pay my expenses.

 

Finally, as you are making more and more over your B-Number each month, make sure you are funding an emergency fund. A good rule of thumb is three times your B-Number to keep on hand to protect against cash crunches. Just open a free checking account and start to put some money away.

Many entrepreneurs low ball their prices for products and services in the beginning. I did.  For my own story, I had a coach that told me what I already knew, I was undercharging. Imposter syndrome is a real thing, and many of us tend to undervalue ourselves and the impact we make in the beginning of our entrepreneurial journey. This seems to be very common with service providers. Coaches, consultants, and freelancers typically start lower than they should, and are sometimes very slow to raise prices. Margins in service businesses are typically higher than many product-based businesses. Because there isn’t a “wholesale” cost, so to speak, many of us struggle to price our services. And if we don’t have a responding increase to the cost of doing business, we tend to struggle to “justify” a price increase to ourselves.

 

There are a lot of articles and methods for pricing yourself in the marketplace, and also ways to raise your prices.  What I want to offer is a way to raise your prices when you are resisting the increase by identifying the increase with a name. We’ll simply call it the “profit line.” This can help with some of the hesitancy to increase prices, your “base price” remains the same but you add on an increase which you categorize and have a real purpose for the money.

 

This system works because many of us struggle with money mindset, and the thought that raising our prices might mean we are greedy. “I don’t need that much” is the cry of the resistance. But you aren’t in business only to solve your needs. You are also in business to create profit and to reach your financial goals. If you don’t have yours defined yet, let’s get some profit goals and the why behind them written.  

 

You can decide what you want to add as a percentage or a number. For example, you charge $200.00 for a service. You add $20.00 as a 10% pure profit line, and the new price is $220.00 for your service. Your prices are raised, a bit, and moving forward every time you sell that service, you siphon off $20.00 to put into an account for profit. Give that account a name, a purpose. You don’t have to stop at 10%. You can add 50% profit and make your service $300.00. Your decision.

 

If you are resisting raising your service prices, give this method a try. Go ahead and figure out how much profit you will have in an account in a month if you add this line. Plan your next business move. What is this specific profit amount going to be for? Remember that any money without a name will run off and spend itself. Go ahead and raise your process. Just do it. Add a profit line this week. Happy Entrepreneuring!