Boost your Money Smarts and Increase your Income

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You don’t have to be an accountant, or even enjoy crunching numbers, to boost your money smarts and increase your income. As a business owner, it’s vital that you understand how to maximize your profit and how to balance your expenses so you can make more money.

The key to making more money is to understand how your efforts equate to profit and not to let business costs eat away at your income, or the money you could be taking home.

Don’t let Costs Decrease your Income

When you fully understand what it costs to run your business you can take control of your profit and prevent those expenses from decreasing your actual income.

For example, if you earn $10,000 in one month, but have $3,000 in monthly operating costs, your actual income is only $7,000 a month. This is a basic concept, but it’s one that you should keep in mind as you create business plans and strategies.

Planning ahead and keeping careful budgets will allow you to maximize your income.

Know Your Overhead Costs

When you first started to make money from home or launched your own business, did you account for operating and overhead costs? It’s vital to remember that the money you earn isn’t all profit, as some of it will be invested back into your business.

If you haven’t done it yet, make a list of all your operating costs, from office space rent to software subscriptions. Don’t forget to include things like conference registration fees, office supplies, business licenses and travel costs. If you hire other employees, their salaries should be included on this list.

Estimate what your costs will be on a monthly basis. Now, add that amount to your target income and you’ll know how much you need to make each month to operate your business and still make the income you want. This simple exercise can help you make more money.

Plan Ahead for Taxes

Planning in advance for taxes will make them a little less painful. You can work with an accountant who can help you estimate how much you’ll owe so that you can set that aside for quarterly or annual taxes.

The key is to take taxes into account when you make financial goals. Just like you did for operating costs, add this amount to your target income to find out how much you need to be bringing in each month to make more money.

Set up a Business Account

It is essential that you set up a separate business account even if you are currently your only employee. Plan now how much of your business’ profit will go into the account to cover operating costs, taxes and to maintain a business fund.

When you take control of your costs and don’t allow them to decrease your income, you will make more money and your business will be much more profitable.

Don’t be Afraid of Financial Reports

To some people, the idea of using accounting software sounds scary. But, there are lots of options out there that are easy to use and you don’t have to be an expert to understand them.

Use a program to track expenses and income and generate financial reports. Review those reports regularly so you can make sure that investments you make are generating a substantial income and leading to the profit you want.

Understand the Time vs. Income Concept

At a regular office job, you are paid for your time. You work a certain number of hours a week and you are paid the same amount each month, regardless of the kind of efforts you put in. But, having your own business is different. You have complete control over your income.

The time vs. income concept is the idea that as a network marketer, you don’t have to trade your time for an income. When you build a passive income stream you can continually make money for a single effort you put into you business. You can leverage time spent last week to keep earning money for the next several months, which gives you a powerful way to increase your income.

When you understand how to invest your time so that you’ll get the most money for it, your income will grow quickly and substantially.

Boosting your money smarts means increasing your income. When you know how to prevent costs from decreasing your income, use financial reports and understand how to make the most income with your time, you’ll be able to build a passive income that lets you live the dream life.

If you would like to learn more about how to start and run a financially stable business, contact me. I help businesses be successful and start making a profit from day one.

About the author 

Deborah MacDonald

After almost 25 years as an entrepreneur, I continue to grow my business, my passive income streams and my wealth. And now I mentor others on their wealth journeys by teaching them how to fund their own freedom lifestyle.

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