(8 minute read)
The Olsen empire is not in trouble and MK & A made one of the greatest career-transitions growing up possible; brand and industry evolution, strategic cash flow positioning, literal style and talent – all notably admirable in my opinion, as it’s not an easy feat. Today we’re talking business growth and management, specifically, not transition.
So what are the two big, naughty money mistakes & hot-button points that several business owners, entrepreneurs and perhaps you are making?
- Your time and income projections don’t effectively align (over-estimating income and undershooting time).
- You are drawing too fat of an personal draw from their business income (in the beginning).
You are a queen, but you are not THE queen. Taxes need to be accounted for, as do other business & personal expenses and investments. Some of the most abundantly blessed and financially fit self-made business people are also some of the most disciplined and regimented around their cash flow activities in the peronal lives and business activities.
Let’s paint a few typical pictures to help position the situation. Whilst reading, ask yourself where you potentially fit in or know as per your patterns that you’re susceptible to falling into. Our goal is to peel you out of any negative financial patterns and get your business healthily ticking and your personal wealth building in the name of business growth and wealth managment.
Picture A ‘The New Business Owner’. Shiny object syndrome, you “need” everything, believe opportunities are approaching you (not the other way around), when you do gain business you don’t create boundaries, and you’re chasing your tail to keep up being everything to everyone.
You’re basically nailing yourself to the cross as we speak. You’re talented and believe in yourself enough to have what it takes. You’ll learn, correct your actions once you see the action in numbers (dollars), improve, get way hella’ grittier and survive. I totally support, commend and have been you.
Picture B ‘The Established Entrepreneur’. You’ve made it (typically past the first 3 years in business, bringing in 100% of your own income). Wahoo! You’re earning a killer income and also dropping it like it’s hot: on Chanel, Hermes, and the latest of whatever is flooding your inbox. This strategically earned money is filtering in in gobs and it feels good after working so hard to make it happen, with your own two hands, blood, sweat, passion and tears. You rock, mostly. I’ve been you too. You’re short term irresistible and the smoldery Jude Law of the pack.
Picture C ‘The Booming Business’. You are my client (actually the above, are all my client). You’re making bank and know how to manage it, or did early stages of the game. Present day, you’re continuously growing at a rapid pace and adding bodies to the payroll. You’re increasingly inundated by bigger picture items and the little things (that all cost time & money) are beginning to fall to the wayside. Whaaaaat? It’s time to rapidly regain your grip while still relinquishing control and allowing others to help you.
Back to business growth and the top two mistakes even the best of business owners and entrepreneurs can (and do) make. There is absolutely no one rendering judgement on the below two points. The fact is that when consciously corrected, this is when true, exponential and sustainable wealth starts to brew. These mistakes aren’t rookie and can last well into billion-dollar buyout and bankruptcy if not tended to in cognizance and time. Shall we?
1. Naughty business owner mistake one: overestimating and under-shooting income, i.e. time & money projections do not align.
Guess what. Anyone can choose how much money they want to make and map it out (if they’ve gotten that far and know how to tranche a market & cash flow strategy to help them arrive). What it takes to achieve the income you’ve mapped out is more than just a plan. It takes risk mitigation, alternative options, time, relationships, capital and a consistent plan.
It kills me to see people bank on bringing in earnings without a heart and simply basing their income on an industry standard (another topic in itself). Overestimating. This means you’ve accounted to earn more market share than you currently are or is possible. In order to grow your business & personal wealth, you need to think big, though realistically align yourself with an achievable strategy along the way. Going from $100 to $100,000/month is slim in terms of realistic.
One of the keys to achieving larger business & financial objectives is to consistently set & meet shorter term goals that bridge the gaps (to your bigger picture wants & needs). Managing income & expenses is integral, as at some point, you’re going to want to make bigger money decisions and investments.
Learning, layering, building and planning; a cash flow strategy here, is your best friend.
2. Naughty business owner mistake number two: paying yourself too much, especially in the beginning.
In the beginning, heck – for the better part of a decade, new business owners are reinvesting a lot of their own capital – while having to still pay the bills at home for themselves and their loved ones (trophy husb’s, fur children and living, breathing multi-language immersion schooled little loves; God bless them all).
Point: this lifestyle costs money, you have great taste, and as you increasingly grow your income, you increasingly increase your spending by adding unnecessary expenses to the roster. I get it. Veuve at lunch x 3 glasses and a round for the table might well be deserved once in a while, though not necessarily on the regular, unless that percentage of your income is well below what’s been banked. In the beginning, taking a smaller owner’s draw from your business is a positive card to play.
To sum up these two points that can plague the best of the best when they get caught up and aren’t well sorted in cash flow accountability. On the flip, when you are cash flow planning, projecting and properly managing and allocating your income and investments, you are successfully living a crucially important long game to bulding sustainable wealth. This version of you is my favorite; you’re fabulous!
Think about your future self and bigger picture vision. It might be appealing today to be macked-out head to to in the latest and greatest, though how appealing will it be when you’re in your twilight years and you’ve not accounted for the lifestyle you want to carry forward to that point and beyond?
Cash flow is critical and I want you to live your best case scenario today and well into the future. Think about it. Any questions, hit me up!
With Abundance + Flow,