How Big Was Your Last Raise?
I talked with a friend last night about her business. She is an entrepreneur full of passion and conviction about what she does. She, as I’m sure you are, is eager for that next step. She said something that I know we all daydream about often.
“I am just ready for things to start ramping up more and for there to be a bigger payday for me.”
I too fall into the same category; hungry for growth and faster progress.
It’s completely natural to have those thoughts and feelings because whether you specifically want an increase in cash, or an increase in freedom, a bigger influence and impact on the lives around you, we all want and yearn for progress. Progress = Happiness.
Take Home More Bacon
I was watching Jim Gaffigan the other night (his stand up is incredible), and he started talking about food. He often talks about his weight and says he is fat. I say often but it is really like every other joke. In this particular segment he mentions bacon. Just mentioning bacon, the audience bursts into applause. I think a lot of people really like bacon.
Watch this short 2:23 clip:
I initially thought of this video for a couple of reasons.
- I wanted you to laugh at his comedic genius
- I wanted to show you how to take home more bacon $$
If you want to take home more bacon in your business, you have come to the right spot. You’re only a few easy steps away. Really, I will show you how it’s possible to give yourself that big raise you deserve today.
Cash is King
Cash is the lifeblood of your business and cash will continue to be king.
In 2015, I came across a cash flow management system called Profit First. It is based on the book Profit First by Mike Michalowicz. Profit First is not an accounting method. You still need to do all that stuff, but this is a cash flow management system that leverages your existing human behaviors.
Profit First has 4 core principles that I am going to share with you right now. These are the principles you need to start mastering to help get you that raise. These are actually based on successful dieting principles. Now hold up, I know what you are thinking. Bacon and dieting…these are contradicting words here right? Yeah they are, but I know you’ll forgive me for it.
Plate Size is Key
As we are all taught from a young age, you better eat the food on your plate. The average plate size in America is something like 50% more than it was twenty years ago. I don’t know where I heard that, I might be making it up, but we do have really large plates. And we fill it up and we eat everything on it.
Just by switching to a smaller plate size, we end up consuming fewer calories which is an important part of losing weight. We still fill up the plate and eat everything on it, but since the plate is smaller, we have fewer calories. In our businesses, we typically have one large plate called “the checking account”. All our income goes into it and we tend to spend everything in it. So Profit First has you create smaller plates by opening up a few more bank accounts.
One for your profit, one for owners pay, and one for your taxes.
Because, as you can see, Profit First says you should be taking your profit first. Too many business owners slave away and never pay themselves like the most important employee of the business, which they are. And if they aren’t paying themselves first, you can forget about giving themselves a consistent profit distribution.
Two of those accounts you set up are exactly for that. And going back to the diet example, another successful dieting strategy is to eat your veggies first. That helps you eat the good calories first so that you will be fuller by the time you may get to the bad calories. Good calories, in the business sense, is making sure the owners are paying themselves what they are worth.
Remove the Temptation
Another good diet strategy is to remove your temptations. I personally like anything sweet. Some would even call me a sugar addict. So the best way to avoid sugar is to literally not to have it in the house at all.
Second best is to store it behind lock and key. As you save money for your profit distribution and for the tax the business needs to cover, put that money into accounts that are not easily accessible. You do not want the temptation of having to take money from those accounts to cover operating expenses. If your business doesn’t have the cash in the operating account to cover an expense, then your business can’t afford that expense.
This strategy makes businesses stay lean and healthy regardless of how much income they have.
The last principle is the 10/25 rhythm. When eating healthy, we know smaller meals throughout the day are better than starving yourself all day and then binging before you go to bed. A steady rhythm in your business gives your business health. So on the 10th and 25th of every month, you allocate money into your new smaller plates for owners pay, profit, and tax. Doing that twice each month lets you see important trends in your business. It also helps you identify expenses that you really need to cut.
Your Paycheck is There for the Taking
By simply having a few things in place you can pay yourself what you are worth and stop going through the grind of taking home jack squat.
Your raise is waiting for you! You just need to implement these mechanisms to get it there. Just imagine what you could be doing with a bigger paycheck!
To learn more about Profit First visit our page here.