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A Profitable Business Is Within Your Reach
Having a profitable business is the dream for business owners, but only about 40% ever reach that goal. If you are one of the many business owners using a cash-balance accounting system to manage your money, you may never get there
It’s time for a mind-shift when it comes to business accounting. It’s time to put you in control of your business finances and put you on track to that profitable business you deserve. And yes, this is within your reach!
Cash Poor vs Profitable Business
You don’t have to have an accounting degree to have a profitable business. You just need to know what you don’t know. What you most likely do know is the standard/old GAAP – or Generally Accepted Accounting Principles – which is basically
Revenue – Expenses = Profit
If this is how you think about your business finances, you’re not alone.
This is how we were all taught, and this is the accounting method used by most businesses today. But take a moment to really reflect on what that equation represents.
You’ll notice that profits are last, and the focus is on revenue and expenses. Those two things are prioritized. In fact, expenses often receive a great deal of attention for most business owners, because we’ve all been trained to see expenses as tax write-offs.
Tax write-offs are not a bad thing, but how many times have you purchased something you maybe shouldn’t have purchased and justified it by telling yourself you could write it off?
You might have even taken out a loan or pulled from your line of credit to make it happen, and put your business in the position of being cash-strapped to make that purchase. That purchase may have even taken money away from what you could pay yourself, but you did it anyway for the sake of lowering your tax burden. How it would affect your ability to be profitable was an afterthought… if it was a thought at all.
How can we expect to have a profitable business if profits are an afterthought… or not thought about at all?
The truth is, we can’t.
And, going back to how most business owners (and even accountants) think about taxes, profit is almost a dirty word. If we make a profit, we’ll owe more. So we have the mindset that we should avoid profits.
Think about that for a moment. That’s huge, right?
We are actually avoiding having a profitable business, and we are spending with abandon to make that happen. Have you ever really thought about it that way?
When you do think about it that way, is it any wonder that so many businesses fail or struggle month-to-month and experience cash flow issues with that mindset?
We need to change that. And here’s the mind-shift you need to make to set your business on a better financial path…
You do want a profitable business that pays you regularly what you deserve. You do want a business that has reserves growing in an account with every deposit. You do want your money working for you and the future of your business. And you definitely want the financial security all of that can bring.
It’s time to let go of GAAP and flip that old equation. It’s not serving you or your business. Flipping that old equation means going from Revenue – Expenses = Profits to…
Revenue – Profits – Owner’s Pay – Taxes = Expenses
You can see how different this is from how you’ve always looked at your accounting. It’s a big shift, but it’s a shift that will change your business finances – forever and for the better.
Your focus will be on profits, owner’s pay, and saving/having money set aside.
You’ll no longer fear tax day, because you will have the money set aside for what you owe. You’ll still have tax write-offs for expenses, but those expenses will be purposeful and actual investments in your business.
You’ll prioritize your pay and get paid regularly. Instead of being last on the list – and maybe never getting paid – you’ll be top of the list. And you will have a profit account, which will provide bonuses and money set aside to grow your business and make necessary purchases without going into debt and dragging your cash flow down.
Less stress. Regular owner’s pay. More peace of mind AND profitable business. Imagine how wonderful that would be!
It really is within your reach. All it takes is a shift in mindset, some simple changes to your behavior around how you manage your money using the Miracle Money Method system, and it can happen for you.