Page 37 - The Magic of Tiny Business
P. 37
Part I Choose Your Limitations
Financial Security: Initially this meant paying basic bills
plus a little extra for playing. Then it grew to include mort-
gage and tuition payments, savings, and access to credit.
What stage are you in?
® What is the dollar amount on your monthly need
to haves (essentials) versus want to haves (desires)?
® What does the space between those two figures tell
you?
® How will your essentials and desires change over
the next twelve months?
Profit: Don’t consume it, use it.
I confused profit with compensation for years. I disre-
garded the sage advice of “pay yourself first,” totally missing
the point of rewarding yourself for your work, no matter the
amount. After thirty years in business, I have learned to
actively promote paying yourself first. You must put air in
your tires or you won’t be able to drive the car. But the
amount you pay yourself is another discussion. Pick a per-
centage for your compensation: gross revenue minus your
compensation minus expenses equals profit. Think of profit
as the asset you can use to build your business.
® What’s your current understanding and definition
of profit?
® What are your expenses?
® What are you paying yourself?
® How can you use your profits to grow your
business?
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