Written By: Lourdes Auquilla
Making $100,000 in sales is not the secret to building a dreamy business. One can make $100,000 in a year, but have $90,000 worth of expenses. This leaves them with $10,000 to take home (before taxes). How can they live their dream life with this income?
This is a simplified version of the numbers seen with business owners who show off their sales reports on Instagram. This ends up creating pressure on other entrepreneurs who are also growing their businesses.
Now, this is not trash talking coaches. Rather, the focus should shift away from making those $10k months, and the real emphasis should be on what one should actually be focusing on. So, what is the secret to building a dreamy and sustainable business that allows one to reach all of their dreams?
Being profitable.
Profit equals sales minus expenses. In other words, it’s what’s left in the business after all expenses are accounted for. Do they know what their profit is?
If not, no worries. It’s pretty easy to calculate if their bookkeeping or recordkeeping is done.
If this isn't done, one should consider getting the DIY simple bookkeeping system, Dreamy Sheets, which will automatically calculate this as income and expenses are entered. Simply go to www.lourdesauquilla.com/dreamy to grab a copy! If bookkeeping is already done, one is already 90% on track to understanding their profit.
Let’s revisit the example stated at the start. Would one rather make $100k in sales, have $90k worth of expenses, and take home $10k (before taxes)?
Or would one rather have made $70k in sales, have $20k worth of expenses, and take home $50k (before taxes)? The second option seems more favorable. It’s a significant achievement to say, “I made 100k in sales!”. But an even greater accomplishment is to say “I made $70k in sales, and had a profit margin of 71%!”.
Everyone has their own definitions of what their dream business and life looks like. But one fact remains constant amongst all of our dreams.
The business has to be profitable to achieve them. If one is left with little to no money in the business each month, how can they afford that dream house, dream office, or dream vacation?
Sure, money can be borrowed. But why do this, when one has the power to assess and adjust where money is coming from and going to in the business? Business owners are intelligent. They have the knowledge and power to build a profitable and sustainable business.
The first step to achieve this is to understand what is happening with the numbers. As a Latina Bookkeeper, it is her job to let business owners know where their money is coming from, going to, how much they’re profiting, or if they’re at a loss. Business owners are way too busy to manage this, and they'll be even busier as they truly start to focus on profit. So let her take care of their bookkeeping!
No matter what the profit is, with her monthly reports, business owners will feel empowered to raise prices with confidence or adjust expenses so that profits can grow. Check her out at www.lourdesauquilla.com to start building a profitable & sustainable business that will help live the dream life! www.lourdesauquilla.com • IG: lourdesbookss
LinkedIn: lourdes-auquilla-526696190 • FB: lourdesauquillabookkeeping
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