The whole virus situation has been a shock to the system. I still can’t believe it’s happening in some ways.
And when this is over we’re going to be looking at an uncertain world. We can’t have this much activity shut down for so long without consequences. The time to prepare is now.
So here are five things you can do today:
- Cut expenses carefully. Cut the fat, not the muscle, but make sure your outgoings are in line with your income.
- Understand what you need to bring in. What do you Need to Earn? And how many clients does that translate to?
- Analyse your cashflow. How much is being put aside for a rainy day? How much just flows straight through your fingers?
- Be honest about your clients. Some are a pain. They don’t pay well, they complain and they eat up lots of time. Concentrate on the good, reduce the bad and then look for more of your best clients.
- Put a plan together. Now you know what you can cut, what you need, where your money is going and who your best clients are, you can choose what your near future is going to look like. Build solid foundations and weather the storm.
Each step is simple. But it takes honesty and guts if you’re going to get results from this.
And if you’d like some help with this, I’m doing a talk on how to perform some of these steps. It’s completely free, with no sales pitch.
Why should you ensure you’re making a profit?
It’s one of those things that seem obvious but actually causes a lot of difficulty for many of us, myself included.
Because profit has a load of negative connotations and those negatives are embedded deeply within us.
Those huge corporations that deliver shitty service and leave you on hold to some know-nothing call centre on the other side of the world but are incredibly quick to pick you up if you miss a payment or try to move to another provider.
Fat cat bosses lounging on their yachts, whose bonuses are so great you could live off it for several lifetimes. Yet they seem to be rewarded for promoting misery and hardship.
But profit is also vital for a business. For your business.
It’s your reward for giving decent service and caring about every communication. It’s your reward for promoting caring and helping your clients. It’s your gateway to the life you want to build for yourself.
Because everything around us takes money. Profit is a reserve of money. One that’s there to make sure your business gives you the life you actually want. Something that keeps you going when times get hard.
So start building some profit into your business today. Message me if you’d like to know how.
We are told that we need willpower to reject temptation. That cake, that cigarette, spend the last £100 in your bank account. And all too often we break and we fail and we hate ourselves for our weakness.
But there is a growing body of evidence that our brains don’t work that way. We have many urges, generated to fulfil different requirements, some which work together and some which are in opposition to each other. Like our long term desire to lose weight versus our short term desire to eat that beautiful cake. Which desire wins out at anyone time isn’t a function of willpower but rather which requirement is the strongest.
So to make major changes you need to build your strength in the areas that you want to win and weaken the ones you want to lose. And the way we do that is by building habits.
There used to be a “stop smoking” ad that showed gloopy fat oozing from the cigarette. It helped me stop because as I reflected on that image it was strengthening the long term “don’t have a fag” part of my brain.
And if you can’t stop spending that last £100 in your bank account, if £90 is for your tax bill or your rent or whatever, lock it away. Put it in a separate bank account with a different bank and don’t install the app for it. Because that way, you’re weakening the “short term spend it” urge by giving it more work to do.
That last one is the heart of the #profitfirst method. You have one account you can spend from. Then you have separate accounts for your tax bills, your own pay and your company profit. Whatever is in your main account is yours to spend. Whatever is in the other accounts is locked away. Making a profit does not take willpower.