What makes a business sustainable? A sustainable business is one that provides you with enough profit to live the life you want. This goes far beyond providing for your necessities. Your net profit needs to cover those AND contribute to personal savings, contribute to business growth, pay your taxes and contribute to your retirement. It should also accommodate things you love - travel, fine dining, theater, crazy shoes, whatever rocks your world. Time to re-charge and be inspired is integral to quality of life. Presented by Anne Cecil, Founder, ONO Made in the 191.
How to Get There
Not there yet? Do NOT panic! Make the commitment to establish these habits in 2018.
First step - Open a business checking account, or create a business specific paypal account. Use this business account to process all sales and expenses. Separating this account will give you a much better handle on where you are financially, day to day.
Anne's Tip: When you "Pay" yourself from this account, take only 90% of the amount you earned. For example, in July your profit (after business expenses) is $450 selling your work. "Pay" yourself $405. Now you have $45 in your business account for taxes, unexpected issues or opportunities and most importantly for BUSINESS GROWTH. This 10% is your built in business savings.
Second step - Open a personal savings account and put a percentage of every "Pay" into your personal savings. So going with our previous 10% number $450 - $405, you will put $40.50 into this savings account. Now you have some breathing room for the peaks, valleys and unexpected items in your personal expenses.
Third step - Open an IRA. If you are under 55, you can put up to $5500 in an IRA. Over 55 you can put up to $6500 in an IRA. Make a commitment to put $25/month minimum into this account starting with January 2018. You will have $300 more toward your retirement at the end of the year than you do now.
Anne's Tip: Use the same strategy for a vacation account, entertainment, saving for a new car, or in my case, My Crazy Outrageous Shoe Account!
The Take Away
Keep in mind this all hinges on you having an understanding of what you need to make for your sustainable life. Start with a detailed monthly budget that includes payments to your personal savings and IRA.
Your best bet is to plan for profit and make your plan a habit. It takes 21 days to make a habit. Make your plan and work your plan daily. In 21 days you will be well on your way to a sustainable business.