Ever wonder how the successful bosses you look up to actually handle their money? I sure have and so has my friend Reina. We had questions, but we felt weird asking each other or other boss friends about it. Well we’ve recently decided enough is enough. It’s time to make it normal to talk about money with each other! Introducing the “PAY YO’ SELF SERIES”. One month, 8 successful bosses sharing their money secrets, + one webinar to share what Reina + I learned and answer your money questions!
For the fourth and final interview of the #payyoselfseries on my blog we have Tara Gentile the Founder of Quiet Power Strategy. Tara is actually my mentor! I have been following her work online for the last 3 – 4 years and last year made the biggest investment in my business yet when I enrolled in the Quiet Power Strategy Business Strategist training. Tara is hands down one of the smartest people I know. She has created an incredibly successful business for herself & is the #1 person I look to for business training and education. I am so excited for you to learn all about how she manages money in her business!1. Can you tell us about the various income streams that make up your business revenue?
My company offers a variety of support and training programs for idea-driven entrepreneurs. Our current programs include our flagship Quiet Power Strategy: Foundation program, The Master Class, Strategist Training Program, and Connect to Sell.
We also offer a membership community that features a tactical resource library, private Google+ group, and monthly Q&A calls.
Finally, I generate additional revenue through speaking, teaching for CreativeLive, book sales, and a conference called Quiet Power Strategy: The Summit.
2. Do you plan your revenue goals for the year at the beginning of the year? If so how do you come up with that #?
Yes and I recommend everyone else does as well! After being in business for over 7 years, I’ve become pretty good at running the numbers and projecting revenue. The most important part isn’t so much planning the revenue as it is planning our sales calendar.
Once I have the sales calendar set, I determine a sales goal for each promotional period. That sales goal then determines my marketing budget and tactical approach. I set the number to create the plan instead of making a plan and trying to project what the number will be.
3. With an idea of what you will make in the next year, is your next step to budget? What does your budget usually include/look like?
Because my business operates at pretty high margins, my budget is extremely flexible. I do set a target for marketing expenses (more so that I spend more, not less!) and factor in payroll since much of our people budget is based on revenue share.
Our costs for website design and development and other technology expenses are fairly fixed, so they don’t factor into our per program budget too much.
4. When did you start paying yourself & how did you decide how much to pay yourself?
I’ve paid myself from the beginning which is both a good thing and a bad thing. I’ve always felt like my business could provide (good) but I’ve often not reinvested what I should have to grow (bad).
It’s only been in the last 6 months or so that I paid myself a salary. Until then, I just drew on the profit of the business. Now, I am paid a tax-advantaged salary and take owner draws as our cash flow and profit allows (which is often).
5. Do you invest back into your business (education/equipment etc.)? If so how much money do you put aside for that and what do you invest in?
When you operate a business with the kind of margins I do, it’s silly not to invest back into the business! I do regularly upgrade equipment and technology. Currently, I’m adding to our payroll and building our team further.
I also reinvest into the business in the form of travel and education—which is something I don’t think people budget enough for. Getting out of my home office and talking to entrepreneurs all over the world has really influenced the way my company has developed. It’s also connected me to top influencers, which has paid dividends many times over.
6. Do you or have you started to work with a book keeper or an accountant? If yes, when did you take that leap?
I did my own bookkeeping for far too long. But I started working with a great financial team in October 2014 and haven’t looked back since. We meet monthly to go over my P&L report and they advise me on financial strategy.
7. What fears did you have around making or spending money in the beginning of your business? Do you have different fears or obstacles now, if yes can you explain?
I didn’t know what I should be spending money on early in my business. Because it was relatively inexpensive to run my business, I didn’t really even consider spending more.
As my business has grown, I’ve had to work through a number of mental roadblocks around spending more money: upgrading tools and technology beyond the basics, paying more people a lot more money, committing to longer-term expenses, etc…
The biggest thing that’s helped with this is to know exactly what my ROI is going to look like on any new expense before I make it. Sometimes that’s just a quick mental check, other times it’s a lot of number crunching and cash flow analysis.
8. How do you and your business account for the variable income nature that an entrepreneur’s business revenue can be?
Revenue planning and cash flow projections are most important to me. If I know when the next windfall of cash is coming, I don’t need to worry about the ups and downs. Realizing that (and planning for it) changed my life. I actually have a free guide to revenue planning that you can pick up here.
However, I’ve also worked hard at creating monthly, baseline revenue for my business. I know if all else fails, I can pay my bills from that baseline recurring revenue.
9. Is there anything else you would like to share with new entrepreneurs who are nervous when it comes to making/handling the money in their business?
Don’t avoid your money! Money makes you worry when you don’t have clarity about it. To get clarity, you need to spend some time every month with your P&L report, your bank account statements, and your revenue projections for the year. Know what you’re spending and why. Know how it’s creating growth and revenue for your business.
When you’re clear, you’ll feel good about handling money in your business regardless of how much you have.
MORE ABOUT TARA:
Tara Gentile is the founder of Quiet Power Strategy®, a company specializing in hands-on business training for idea-driven entrepreneurs. She’s passionate about helping people with smart ideas make more money, reach new audiences, and live life with ease. Tara is the author of The Art of Earning, Quiet Power Strategy, and The Observation Engine. She’s also the host of Profit. Power. Pursuit. a podcast that goes behind-the-scenes of the real grit, administration, and logistics of running a successful business.