Business Expenses: Not glamorous but necessary

Have you ever noticed that when we think about our finances, we sometimes exaggerate how complex they are? We begin to think about them and instead of realizing how simple and straightforward they are, we begin to think about all the little pieces of paper we need to find. We think about how we have NO idea where we put the bills. We start berating ourselves because we haven’t been keeping track of our mileage or cash purchases. We wonder what we can write off and worry about doing something wrong – all this before we even START doing anything to begin with!

Well if you are like me, and I suspect you are a little like me in this respect, we tend to make a mountain out of a mole hill and instead of facing it we RUN away. Like the proverbial runaway bride, we would rather skip town than make the commitment. The only difference is that we can’t leave our finances at the altar. We need to face them, because sooner or later they will catch up to us – or at least our respective government will! So today, I’d like to share with you some of my tips for staying organized and on top of your numbers!

1. Create a system for tracking all your expenses. Now I’m totally optional, meaning I love things to fit the individual – therefore I encourage you to do what feels right. For myself – someone who needs a little more structure- I have a spreadsheet that lists out all my bills, amounts and due dates. That way I know when expenses will hit my business account. In that spreadsheet I also keep track of all my home utilities, and expenses. Since I use part of my home for my business, this becomes essential during tax time (please check with your CPA regarding your personal tax situation).
2. Use your system and modify as needed. Perhaps this goes without saying, but sometimes I feel it’s best to state the obvious. Once you’ve got your system set up, then stick to it. If something isn’t working – instead of telling yourself you are bad with numbers or keeping track of your finances – just modify what’s not working. I have a client who constantly told herself she needed to keep track of everything at least on a quarterly basis. That it was the “right thing” to do. But she never did it! So I told her, to save all her receipts in one place and then before she went to her CPA – to carve out a weekend to reconcile everything. And guess what, it worked for her! So instead of trying to force yourself into doing something you think you “should” do – just do what works for you – whatever that is!
3. Be sure to incorporate expenses into your services/product pricing. I learned this one the hard way, over and over and over again. Did I say over and over? Look, sometimes you can be super smart – but you might not be so bright in some instances. This is a place where I was definitely challenged. Now, I look at what my expenses are for a particular product or service and I work it into the price. I don’t allow additional expenses to come out of my pocket, it’s either in the budget or it’s not. This is especially important if you choose to hold live events or provide physical products. Knowing what your expenses will be is hugely important and be sure to keep track of all those receipts!
4. Partner with a strong financial team. It is essential that you have a great team to support you and your business, from CPA’s to bookkeepers to financial advisors, they all play a vital role and will help you keep track of what’s working and what’s not working in your business. Ultimately the decisions are yours, but hearing all the opinions is helpful so that you enter into all you do with your eyes wide open.
5. Be honest about your situation. This is another area, where I needed to get real with myself. At first I kept pretending everything was ok, and kept spending as if I had a steady paycheck every two weeks. Sure my husband was bringing in money, but at the time it wasn’t nearly enough to cover all our household and business expenses. We had to sit down and really look at what the situation was. I had to learn to prudently use business credit and to stop pretending that I would be making millions in no time flat! Perhaps you aren’t as delusional as I was, but I’m sure at some level, you may not be as honest with what’s going on with your finances as you could. So, I encourage you to just check in and see where else you might be more honest with yourself!

Good luck and happy expense tracking!

Oh, and if you leave a comment about this post below, I will invite you to a 30 minute call where I will share in greater detail my expense tracking system and give you a copy of my Thriving Business Toolkit, which includes all my spreadsheets, a glossary of terms and checklist for must haves in your business a $300 value, yours for free just for providing your thoughts on today’s topic!

My massage made me crazy!

 Omg!

As many of you have seen via my social media, I scheduled a last minute massage today and that massage has lead to a crazy business download. I know this must sound really funny, but while getting the massage I got this really strong message that I needed to do something super special for all you women who are still struggling in your business AND are wondering if 2011 is going to be any different for you … Based on what I’m sending out tomorrow I can tell you, it will be MAGNIFICENT!

So before I get in my own way, by questioning what I’m doing, I’m warning you today, so that you can hold me accountable! I really can’t believe I’m doing this, but I guess I wouldn’t be walking my talk if I didn’t. So I hope you can join me on this amazing journey. Be on the lookout for details tomorrow!

I can’t believe I’m doing this. Hope you can join me on this amazing journey. Until tomorrow!

Together let’s Thrive,
Silvia

P.S. Remember to subscribe asap to not miss out on this amazing business announcement, to the right of this post or at http://OutsideTheCubicle.com

Happy Thanksgiving & a Quick Rant!

Hello My Friends,

I was on vacation, basking in the sun, on Kauai last week and I got to reflecting on my journey from the cubicle to entrepreneur and realized I have a lot to be thankful for.  I’ve had great support from my family, especially my husband Scott.  I have a background that has made my transition easier, especially since I spent my last years in the corporate world working at Intuit in the Small Business Division.  I have extensive training in Neuro Linguistics Programming (NLP) where I learned how to uncover the “difference that makes a difference” and I applied that concept to uncover what I had to do to create a thriving business.

Through the mixture of support and background, I’ve been able to make leaps and bounds in my business.  To hit the ground running bringing in six figures the first year I was in business. And to recover from the blow of letting some of my business go last year as my dad fell very ill and passed away.

It has allowed me to rebuild my business to be even stronger this year and to go from making $2000 per month in January of 2010 to $30,000+ per month AND take 6 vacations in less than a year! I’ve used what I learned to create a business building model that has in turn helped my clients gain exponential growth in their businesses; some of them growing 50% to over 200% and more.  Because of the staggering results I am seeing, and realized that I have truly uncovered what REALLY works in building a thriving business I am motivated now more than ever to share this business building model with as many women entrepreneurs as possible in 2011!

You see, I am tired of watching you struggle and be in survival mode.  I am sick and tired of witnessing the fallacy that is out there – that somehow if you learn one more marketing strategy or one more sales conversion technique that it will change your business.  The truth is there are a myriad of ways to bring you a long line of customers and convert them… there is no magic pill and this madness has got to stop. What I want to share with you is my formula for what it truly takes to build a business that THRIVES in any economy and to then use the marketing and sales strategies you are most comfortable with to pull yourself out of survival mode.  After you’ve got the foundational pieces in place, you are ready to learn other tools that will help you turbo charge your business, allowing you to grow it at the pace you most desire.

So I am making a commitment to you.  I will be brining you more free content and more group programs at affordable rates in 2011.  I will also be learning more about the latest marketing and sales strategies, uncovering the “difference that makes the difference” and offering that information to you too!  Your business is to help your clients not to pour over countless books, trainings, articles, etc.  That’s what I’m here for – consider me your cheat sheet for business building!

And because I’m impatient and can’t wait until 2011 to start giving you new content, I will be releasing a series of videos in December where I will share with you my very own Thriving Business Success Formula.  It is the formula I’ve used and continue to use in my business AND that I have taught countless women (and men) to help them achieve their very own Thriving Business. It is time that we stood up for ourselves and what we believe in! 2011 is the year to create massive positive change in the world through our businesses and I look forward to supporting you on your business building journey!

Together Let’s Thrive,

P.S. Keep your eyes peeled for those videos covering my Thriving Business Success Formula
P.P.S. If you know of other women who would benefit from this free content, make sure they sign-up for this newsletter and their very own 6 Figure Success Package at: http://OutsideTheCubicle.com/welcome/

The Magic Two

There are two numbers you need to be crystal clear about in order to pursue your dreams in a way that is strategic and fun. In my business, I find that most women shy away from figuring these two numbers out. I often hear them say, “I am not good with numbers” or “I have all I need in my paycheck” or “My husband says we need around…”

Since they do not own their finances, they are never clear about where to start, where they are trying to get to and often never fully embark on their journey to pursue their dreams.

Now that you know it is time to look at your own finances and learn about your two numbers, let me share them with you:

1. Available Liquid Cash: How much money in cash do you need to have in order to feel comfortable? I want you to really consider this. Not how much do you have in your retirement accounts or long term investment accounts, but how much do you need in the bank that you could tap into in case of an emergency? Do you really know what that is?  Then set your target.
2. Monthly Income: How much money do you need to be bringing in on a monthly basis to feel comfortable? Here’s where you don’t want to look just at your paycheck.  You want to make an itemized list of how much money you spend, how much you need in excess for savings.  Then as you start to research things such as health insurance, business loans or other business expenses then those get added to this number.

There are a few other numbers I also have my clients look at, but with these two numbers complete you can set a target for a comfortable transition.  Also, make sure you have a conversation with your CPA or Tax Attorney as there are many write offs and credits that you could qualify for that may impact those numbers for you.

Take a moment and set time aside for this activity whether or not you are already in business, this will give you clear goals to shoot for!

Corporate versus Small Business Stability

“… the once ‘safe’ options have failed” says Timothy Ferriss in The 4 Hour Work Week. There is no need to look further than the nightly news to realize the game has changed and just as pension plans gave way to 401K’s, steady paychecks and other retirement benefits are a thing of the past. I’m not saying that corporations will ever disappear, however the structure of the workforce and the benefits that they provide will. I predict there will be a higher use of contingent workers to do smaller projects requiring a specific expertise. More will be outsourced internationally and the benefit structure, especially for retirement will be placed in the hands of the employees.

I saw it before I left the corporate world and continue to see the trend even now. Corporations have historically spent an average of 30-40% of their workforce budget just on benefits making employee related expenditure the highest in the budget. Everything from salaries to healthcare to vacation pay employees thus become a liability in tough economic times…. Read full article

4 Hour Work Week Part 4.2

Concept – Outsourcing

There is no right or wrong about how you do stuff when you own your own business, sometimes you just need to iterate.

Take advantage of leverage and take advantage on your own and do more than ever possible.

Time is limited – the only way to make some traction is to find different ways of using your time wisely.

Outsourcing for your Business – You want to make sure you’ve done the effectiveness and efficiency test against those tasks you outsource. They need to be worthwhile to do – because if not you’re paying someone else to be inefficient and ineffective – so why would you want to spend your money – another precious resource, outsourcing if it’s not efficient or effective.

You want to make sure you have streamlined whatever it is that you are outsourcing as much as possible, before you give it away

Make sure these tasks happen in a regular fashion, especially if you’re handing things over to a VA. For example, I have a VA that takes care of my transcriptions for audio recordings and things – that’s how I ended up with the “Three Simple Secrets for Six Figures Outside of the Cubicle” product, because I had the audio that I recorded, transcribed by her, and put those two together and that becomes a product.

Also, I do a lot of social networking, posting on social networking sites – it was trial and error – picking between LinkedIn, Facebook, Twitter, playing around with that stuff, learning that stuff and now I’ve streamlined it and figured out what is it that I really do that makes a difference, what are the key components that are really driving traffic to my website, that are giving me people that are coming to me to have either a free ½ hour or want to work with me right off the bat.

So, now that I’ve got that down I’m putting together a manual so that I can then outsource that to my current VA or somebody else.

I also use a VA for formatting, newsletters, or posting articles – and not 100% – sometimes I get inspired and it has to be put out right this minute – I have that flexibility.

Make sure you have things really narrowed down – So that you’re setting the other person up for success and that you truly do need what you’re outsourcing.

Need the book? Get it here:

The 4-Hour Workweek, Expanded and Updated: Expanded and Updated, With Over 100 New Pages of Cutting-Edge Content.

4 Hour Work Week Part 2

Concept – Relative vs. Absolute Income – Main underpinning of the book – You need to first know how much you make per hour to really start thinking about what are things you want to outsource.

Tim Ferriss compares Jane Doe and John Doe – Jane Doe makes $100,000/year and is thus twice richer of John Doe who makes $50,000/year. At least this is how we typically see this in the corporate world. Were’ all about how much we make and what’s that title we have and that’s how we measure our success.

Reality

Jane makes $100,000/year, $2000/week for each of 50 weeks she works, 80 hrs/week
Works out to – $25/hour

John makes $50,000/year, $1000/week for each of 50 weeks he works, 10 hrs/week
Works out to – $100/hour

Relative Income – John is 4x richer than Jane, especially if he knows what to do with his $50,000/year

Challenge Yourself Exercise

Take a look at how much money you actually need on a regular basis.
Look at what you’re currently at, what you need in order to make minimum payments and also throw in a few things that you would like, so you’re not feeling 100% constrained – don’t throw out all the eating out or massages, etc.
Realistically speaking, as a minimum, how much money do you really need to make in order to feel good about yourself.
Then start figuring in what are those things you really like to do, or would like to do, or would like to achieve with your spare time – how much do those things cost?
So you start to figure out truly how much you money do you need on a weekly or monthly basis in order to make those things happen – not per annum.
That is the paradigm shift in thinking – In corporate world, it’s about more money.
When time is of the essence, you have a set amount of time, how you spend it is as important if not more important than the income that you have coming in to be able to satisfy yourself

1. How much are you really making in terms of actual income? – divide income by hours of work.

2. How much money do you really need in order to survive and feel good about yourself – especially if you were able to cut out that extra time spent working in the corporate world or if you’re starting to be a business owner – how you want to spend your time in order to maximize your lifestyle.

Need the book? Get it here:

The 4-Hour Workweek, Expanded and Updated: Expanded and Updated, With Over 100 New Pages of Cutting-Edge Content.

The number one skill entrepreneurs need

Would you like to know the number one skill for entrepreneurs? Well it’s the same one that all CEO’s need – to understand the company P&L and Balance Sheet. Right about now some of you may be grumbling. Some may even be thinking that you are no good with numbers and that your dreams of being an entrepreneur are crushed. I ask that you not be so mellow dramatic and if you are freaking out, check out my post on how to deal with your inner critic then come back to this one.

The truth is you need to understand the numbers whether you plan on keeping your business at six figures or grow it to eight figures and beyond. In fact understanding the numbers is a key strategy employed by GE in its leadership academy. And you all know that there have been more CEO’s to come from GE than some of the top business schools combined! The numbers help you to fully understand and therefore influence things like, your margins, business cycle, purchasing trends, overall sales, expenditures and so on. In essence it gives you full control over your companies and therefore your own success.

So what’s the first step to understanding the numbers, if you are numbers challenged? Rest assured you do not have to go back and get your MBA. In fact the easiest way is to start by pulling out the spreadsheet or Quickbooks report and look at the basics, profit and loss. Look at where all the money comes from, when it comes in and where it all goes. If you are really intimidated enlist the help of your CPA or bookkeeper, they love numbers. Ultimately, you need to grow comfortable looking at, working with and understanding those numbers – regardless of their size.

It’s time to face the numbers. Go, pull those reports and start studying!

How to save tens of thousands in your business

All entrepreneurs will agree that the best investments are those in education and solid partnerships. When you have great mentors and strong business relationships, it can make the difference between making or breaking your company.

The problem is you can get sucked in to working with someone that isn’t the right fit if you are not careful. You can end up working with someone who over promises and under delivers, costing you tens of thousands of dollars. I’m a glass half full sort of gal, and when I’ve ended up in this situation (which I’ve had a few) I ask myself, “What lesson did I learn?” and “How can I avoid getting sucked in next time?” But really, deep down, all I want to know is, “How can I avoid getting suckered, in the first place?”

Check out the questions I now ask, that save me time, energy and money.

1. What specifically are you delivering? – This is really a way for you to get clear about the brass tacks. Often times you are given the high level outcomes, but no specifics. This is your opportunity to find out the details and make sure they are aligned with what you need.
2. What key successes have you had in your business and in what timeframe? – I think this is especially important when talking to mentors, but also quite useful with business partners. Even when I was in the corporate world, I always trusted someone who had actual results versus potential results.
3. Who can I talk to that is not part of your team that would act as a reference? – Just as you would interview someone for a job, ask for references. There is no shame in this and don’t let someone just point you to testimonials on a web page. Talk to a real person and one that is not on their payroll in some way.

This is where I say, your corporate experience will help you out! Remember how you used behavioral interviewing when bringing someone new into the group. It’s the same thing with business partners and mentors as an entrepreneur. They may have different labels, but they are still team members, so treat them as such.

Top two fears for people wanting to become entrepreneurs

In a survey I conducted of 200 individuals, who stated they wanted to make the transition from corporate to business owner, the top two things they indicated stopped them were:

• Inability to replace current income
• Not having a stable income

What can you do to counter these top two fears? How can you make it possible to have a stable income that replaces your current corporate salary? Below are the four areas to focus on in order to set these fears aside:

1. What do you really want to do with your income: replace, upgrade or down grade? There are many people who would be content earning less if it meant they could do what they loved. Others may want to keep their current level of income or even gain more. Getting specific with what you truly want and need is essential to be able to create your customized financial plan.
2. Based on what you want to do, how much money can you make? This includes considering tax breaks that may yield you more income than you thought. Even if you can generate enough money to give you what you need, I highly suggest you find other ways to supplement your income. There are many ways of increasing your income streams, the key here is to increase your financial IQ and then find the investment(s) that will work for you.
3. Put together your personal financial plan. Consider things like the consistency of your business and make sure that you are accounting for any fluctuation. What are your short and long term expenses? Talk to someone who’s got a similar business to determine what these might be for you. Once you’ve got this figured out it will help you see what changes need to be made to your business plan in order to pay yourself the salary you desire while investing in your business. This is also an area that supplemental income streams can come in handy.
4. Invest in your nest egg. As your business grows, and other income streams grow, the more money you can put away as a nest egg and the more income you can be generating. The number one piece of advice the most successful entrepreneurs suggest, think Donald Trump, Sir Richard Branson and Robert Kiyosaki, make your money work for you. Build up your nest egg and then have it work for you by providing you the passive income you need to live.

The financial fears you may have now, will dissipate once you develop and execute on a plan to create the income you need. The important thing is to think through what you really need and then get creative on how to make it happen.