Find out how small business owners (just like you) are living the dream by creating a strong financial plan.
As March transitions into April, and your business moves from first quarter into second, you may be running around with a million things to do. Entrepreneur life is never not busy.
But here's what you're not doing: drumming your fingers on the table as you wait to hear from your CPA how much you owe the IRS this year.
Why? Because you've got a financial plan.
Ah…who'd have guessed those two words could sound so sweet?
Since we can't give you a high-five in person, we thought it would be fun to introduce you to a few kick-ass entrepreneurs who, like you, are enjoying not only an easy-breezy-lemon-squeezey tax season but also round-the-calendar peace of mind, thanks to the financial plan they've created.
Rikka Brandon — Financial Planning Rockstar
You all know our pal Rikka Brandon by now. We've featured her here on the blog and we're always tweeting her wisdom about growing your business. (What she doesn't know about hiring isn't worth knowing!)
While Rikka was chillaxing her way through tax season, she graciously sat down to answer a few questions about how creating a financial plan changed her business and rocked her world.
When someone asks “So…how do you make money?” what do you say?
I have a couple of businesses that help people either hire better or get hired. Companies work with me to find the best possible people for their openings.
What does “having a strong financial base” mean to you?
My number one value is freedom. I don’t ever want to be trapped; I don’t want to have to do something I don’t want to do. And for me, security leads to freedom. When I know my family is taken care of, I can be as free as I want. When you know that you can cover your bills for months and you’re going to be okay no matter what crisis or catastrophe might hit, you’re allowed to be free. We can do things like move to Mexico for a year or travel around the world with our young kids.[Tweet “”Security leads to freedom. When you know you can cover your bills no matter what, you can be free.””]
What made you decide to get intentional about creating a financial plan for your business?
Like most entrepreneurs, I’ve always been really good at making money, but I haven’t been good at creating wealth. It’s irritating when you think about the fact that you’ve earned millions and millions of dollars over the years, and yet your net worth is not millions and millions of dollars!
When I started working with The Bottom Line, I really loved how they worked with me to look at my business as a tool not only to make money, but to create wealth. I’ve had bookkeepers for over a decade, but that was the first time I’ve had a bookkeeper really partner with me to create that path. That has been so powerful and I’m forever grateful for that.
What kind of impact does hiring the right employee have on a given business’ financial plan?
Hiring right is such a key part of your success as a business owner! Not getting it right is one of the most common causes of failure. They estimate the cost of a bad hire at about 30% of that person’s annual salary! You’re wasting the manager’s time, you’re spending payroll on sombeody who’s not performing, you’re possibly damaging customer relationships… It’s a huge thing to get wrong.
Getting it right is hugely powerful! When you can get somebody who can perform independently, who doesn’t need you to manage them, who doesn’t need you to hold their hand, you suddenly are supported by your team. All those dreams you have for your business are now possible–you can bring them to life when you have the right people.[Tweet “”You can bring all your business dreams to life when you have the right people.” @rikkabrandon”]
Of course, your team will change as you grow and evolve as an entrepreneur. At one point I had 15 W-2 employees; now I have a team of 5 contractors. So a big part of this is recognizing where you are in your entrepreneurial journey and your lifestyle goals, and what kind of team will best serve you to get to those financial dreams you have.
What are you proudest of, when it comes to mastering your business finances?
Profit First was an amazing book for someone like me who believes “Aw, I can always make more.” When we read Profit First, we looked at our operating expenses and they were way beyond the percentage we should have had. We made really massive changes within about 6 weeks; we were cutting all sorts of things that we didn't need. Since we did that, we’ve stayed well within that range to make sure that our operating expenses are in line with our revenue.
Not to mention, we now have twice-monthly meetings to talk about everything so we’re on the same page. That was something we’ve always said we should do, but now we’re actually doing it.
How has financial planning made your business more amazing this year?
Security again! I don’t worry about if the check’s coming in. I know that we have the right plan, I know that we’re not being stupid with our money. When I know our needs are taken care of, it allows me to create the stuff I really want to do and serve the people I really want to serve.