[Video] Why Your Business Number’s Plan Matters
MICHELLE SMALENBERGER, CFA ®
In a previous video we’ve talked about keeping the books for your business up to date, including all your income and expenses. Today, we’ll talk about why that matters for your business number’s plan.
Here’s a progression of your business from when you start to the growth mode that you find yourself in.
- In the beginning you’re simply trying to get revenue in the door
- Now that you’re earning revenue you find yourself trying to break-even so that your income can pay for all the business expenses.
- A new goal becomes earning enough to receive a regular paycheck.
- Finally, since you have regular income to provide a paycheck to yourself you need to consider whether to reinvest excess revenue back into the business or invest in your own personal finances through starting a retirement account or funding other goals.
Now your thought process changes so you consider the progress of your business and progress toward your personal goals. This is your business number’s plan. If you always keep your financials up to date they you can make decisions quicker about where to place your income as it comes.
If you don’t set a plan to purposefully progress toward something then you may find you never reach what you hoped to.
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