Cash Flow Crash Course Part Three: 3 Steps For Managing Your Money Like A Boss
Here it is… the final installment in the Cash Flow Crash Course!
Managing your money!
You’ve come this far in your mission to improve the cash flow in your pet business, and that deserves some celebration. 🥳🥳🥳
That means you truly get it.
You understand that getting a grip on your cash flow will help your pet business thrive.
No matter what stage of business you’re in or how much debt you have, you can dig your way out and still operate the pet business of your dreams. Your cash flow is NOT your profitability, but if you manage it properly, it will impact your profit!
It all goes hand in hand (or paw in paw).
In case you missed it, check out the first two steps in the Cash Flow Crash Course:
Once you’ve completed those steps, you move on to managing your progress!
Here are our top three pieces of advice for being a money management Boss:
1. Understand your break-even point.
Your break-even point is how much money, at bare minimum, you need to make every single month. NOT how much money you need to be “profitable,” but just to cover your expenses. It is fully understanding what your total operating expenses are, how much on average you should be spending on your inventory, what your debt payments are, and how big your payroll is.
Feeling overwhelmed by figuring that out? You don’t need to get into the nitty-gritty. An average will do and can always be adjusted later!
Just go back through bank statements and start to get some averages. Add it all together, highlight it, and separate out the inventory. You just want a quick average– the lump sum for the whole year in certain categories and divide by 12. Perfection is not the goal here, but a general estimate of how much money is going out will give you that break-even marker to start with!
2. Create multiple bank accounts.
You’ll need at least these three:
Business checking account– This will hold your break-even amount to cover your operating expenses. Any extra can be automatically rolled over into another account.
Sales Tax Account– Your customers pay you sales tax, and you want to stay current on paying it back to the state. If you don’t keep up with this, you’ll end up spending this!
Pet Boss Nation CEO, Candace, has a story about this that might keep you from making a similar mistake! Early in her business, she was so distracted by paying her landlord and her employees that she wasn’t even thinking about when it came time to pay her sales tax. When she went to apply for her annual business license with the city of Chicago, she was denied because she wasn’t in good standing with the state and had to pay that back before they’d renew! Take this as a lesson you don’t have to learn the hard way.
Another checking or savings for your business savings account– Put at least 10% of your gross revenue in here each month and watch as you grow yourself an emergency business fund!
3. Schedule time to manage the money.
Yes, like actually schedule it. Write it in your planner, put it on your Google calendar, or in your phone… and make it happen!
Our CEO Candace incorporated “Money Mondays” into her routine when she owned her pet businesses. Every Monday she would sit down and look at the finances.
When you do this, ask yourself– What money issues need your attention? Do any vendor credits or fees need to be waived? Are there refunds you’re waiting for? Should anything get canceled?
Whatever is most pressing should get your attention first… and make it fun with a Money Monday theme or whatever works for you (maybe a wild Fri-yay night of finances?)! The numbers are important, so this scheduled time is key to managing them.
Congratulations on working through the Cash Flow Crash Course blog series! Managing your cash flow will do amazing things for your pet business, and we can’t wait to hear about the differences it made for you. Drop any questions or comments into our free Facebook community for pet business owners!
Want to dive even deeper into cash flow management? Check out lesson #2 of the Pet Boss™ Summer School Series here, and episode 16 of the Boss Your Business podcast here!
Learn more with us!
- Need 1:1 support to make massive action now? Book a discovery call with us to see if working 1:1 with Candace is the right fit for you.
- Get on the waitlist! You’re passionate about pets. It’s time to have a business that supports the life you want, too! Learn the specific techniques to find new customers, to increase sales and to build a better team for ANY kind of pet business by joining the Pet Boss Club! Get on the waitlist here.