Editor’s Note: This article—Paying Yourself Will Grow Your Business—was first published on September 26, 2018, in a slightly different form.
Perhaps this post is for new Memoir Professionals—but not necessarily. It’s for everyone who does not yet believe that paying yourself will grow your business.
It’s about growing a vision of yourself by creating your habits. It’s about learning to accept a certain reality.
As you begin working for yourself, it may seem like you will never earn any money. You can slip into believing “I can’t earn money doing memoir work.”
In this post, I will help you to begin to act as if paying yourself will grow your business. It really will. To show you how this is so, I’ll ask you to play a little game with me, a little game that will have big results. This game will stimulate your business growth.
“But, I don’t have money to pay myself!” you persist in decrying.
But you do! Let me show you a strategy. It will work to get you to think in terms of paying yourself weekly.
Part of Business Development is to Pay Yourself
There’s no denying that your business has got to support you. Your business has got to be how you earn your income. Paying yourself will grow your business. Here are steps to doing this.
1. How much income do you want to earn in the next 12 months? Add to that net income a guesstimate of what your expenses and your taxes will likely be. That total figure will be your necessary projected gross income for the next year. Just say you want to earn $800/week and you guess-timate your expenses are $200/week (taxes, Social Security, printer toner, etc.) This adds up to $1000/week.
2. The non-salary expenses have to be provided for. They don’t occur every week but they do occur over time. They are not negotiable. Put aside enough money to be able to pay for these. I am not writing about these expenses in this post.
3. Now, take the figure that is your desired net weekly income (what you will take home) which I listed above as $800. This is the weekly personal income your business owes you—yes, I wrote “owes you,” the income you have agreed (with yourself!) to work for.
Ok…
I hear you. You may not have $800 in your business bank account to meet your entire projected income figure week after week, but you did produce some income this week (let’s say). Trust me: paying yourself will grow your business
4. To imprint the habit of paying yourself weekly, go through the motions anyway—this is a sort of game that can bring high dividends. This is what you’ll do: Go on your bank’s internet site and from your personal account, transfer the amount you need to meet the balance of your weekly net income. Your business account will receive an infusion from your personal account. (You may even have to go to your Overdraft Protection for this.) This process will create a figure amounting to $800 in your business bank account.
5. Then, transfer your desired weekly income payment ($800) to your personal account. Voilà, you have just paid yourself—symbolically, if not really. Pay yourself weekly. Paying yourself will grow your business and become a habit of paying yourself.
How paying yourself will grow your business
What you transferred is not real income, of course, but this process can imprint two things in your your mind
- what your weekly deficits are that are keeping you from your income goal, and
- how you must take massive action to remedy your deficit. This deficit cannot continue indefinitely!
- How about making those cold calls to prospective workshop clients to boost your upcoming enrollment? Call co-authoring queries to close the sale.
- Write to people who owe you money to request their payment.
Make yourself take massive action. Remember: your weekly salary will be due again next week. There has to come a time when you naturally have enough money in your business account.
This game is great for implanting the habit of paying yourself but it does not solve the money problem!
I hope this will impel you to focus on:
- billable time,
- efficient use of time (e.g., not talking longer on the phone than necessary),
- income-producing projects in the short term and passing on “creative” projects that probably will not change your income. (Do you really need a new logo?)
- etc.
In short, you will begin to “chase the money” which is a primary goal of any business, of your business.
Remember: set up a regular day to make the salary transfer again and again.
This is a business.
This is not a hobby you are engaged in. It is a business. A business owner must learn to produce wealth.
If you need help with this sort of strategic planning or if you have failed to plan for where you will be in 12 months and how you will spend your time while in the office, you OWE IT TO YOURSELF to sign up for individual business coaching.
In conclusion to “Paying Yourself Will Grow Your Business”
What tips or advice can you share for a successful memoir business? Do you follow a strategic plan for your business?
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