Finance

Welcome to the latest series at the wildly popular JosephSangl.com – “How To Destroy Your Finances”

In this series, I will be sharing methods proven to cause financial pain and agony. Use these methods if you want to live with piles of stress and harm your relationships.

Part One   Refuse to work with your spouse on money decisions.

Whenever your spouse wants to talk about money, choose to throw a fit. Stomp away. Huff and puff. Pout. Make outrageous statements like, “You’re just trying to control me!”

When your beloved hands you cash envelopes for impulsive spending categories like “spending money” and “entertainment”, spend it right away. Then go to the ATM and pull more money out without telling them. When they want to speak with you about your “unauthorized withdrawal,” tell them that it’s your money because you worked for it and that you will spend it “any ole way I want to.” If possible, say this with the highest level of sarcasm possible.

Choosing to ignore your spouse when it comes to money is one of the surefire ways to destroy your finances. And most likely your marriage. Which could lead to divorce proceedings. And that will ensure any remaining money is spent.

Of course, if you don’t want to destroy your finances, it would be ideal to work together with your spouse. It’s one of the top ways I began winning with money. I share my story in my book, I Was Broke. Now I’m Not.

If you ever find yourself stuck with a particular aspect of your business, it might be time to find a partnership.

For example, when I fired up I Was Broke. Now I’m Not., I was the developer of all our web resources. I created most of them with Microsoft Word. You don’t even want to know how bad those looked! So I found a couple of web developers and the partnership helped both of us. The web developers made money and the websites helped us get more free financial tools to people and sell more helpful financial resources!

Our organizations have also partnered with companies that provide database management, marketing consulting services, and leadership coaching. They’ve all helped us move our businesses forward.

Great partners bring expertise and focus that may be difficult (impossible?) for your company to deliver.

One last thing:I’ve heard it said before that “Good partners COMPLETE each other. They do not COMPETE with each other.” Be sure your partners aren’t participating in the same business space as you are as it could create unwelcome competition.

Application Questions:

1. What areas of your business do you feel are STUCK?
2. What partnership(s) could you form to get UNSTUCK?

One of the greatest challenges small business owners face is projecting income.

When providing financial coaching to small business owners, I ask, “How much are you paid by your business?”

The answer is usually some variation of: “Whatever I can take. It’s always up and down.”

This makes it extraordinarily difficult to manage household financial affairs and can literally drive the bill payer completely crazy.

Here’s solution to this problem.

1. Stop “investing” (spending) all the extra money. When you have a great month of revenue, don’t view it as a ticket to spend money. Instead, view it as a ticket to stabilize your income! Save the extra money in an operating reserve account.
2. Establish a monthly (or weekly, bi-weekly, or bi-monthly) salary. In your household budget, determine the amount of money your business needs to pay you each month in order to thrive. Ensure your household budget includes saving for Known Upcoming Non-Monthly Expenses (KUEs) such as Christmas, Special Days (birthdays, anniversaries, weddings, showers, etc), HOA, Insurance Premiums, etc.
3. Pay yourself the set amount of money each payday – and leave the rest alone at the business! Even when the business is thriving, it is important to continue to draw only your salary. This is because the “down times” will be coming soon through the natural business cycle of your business. It’s not fun to leave the money in the business during times of plenty, but it sure is nice to have those reserves when the business is struggling!

It’s how I operate my businesses, and I’m confident it will work for you too!

My book, Oxen, is a great resource to help you establish a new business or acquire an existing one.

I recently posted the following thought on Twitter:

“Some days are for planting seed. Others for harvesting. But MOST DAYS are for preparing, tending, and waiting.”

It raised quite a ruckus and a chorus of “that’s the truth!”

Anyone who has been involved in gardening or farming knows this fundamental fact.

In the spring time, there’s a mad dash to till the soil and get the seed in the ground. In just a few days or weeks, the work is over.

Then we wait. Wait for the seed to come up.

Then we wait. Wait for the crop to grow.

Then we tend the crop by eliminating weeds and applying fertilizer.

Then we wait. And we prepare the equipment. We clean up the planting implements and prepare the harvesting equipment.

Then we wait. We wait for the time to harvest.

Then another mad dash occurs at harvest time. We work like crazy to get the crops “in the shed” before weather can destroy it.

Then we wait. And we prepare the equipment again for another season. We prepare the soil for the next growing season.

The same is true for your finances and in your leadership. There will be moments where it will require the “mad dash” of effort. Then there will be moments where it will be waiting, tending, and preparing.

It’s what you do in the “then we wait” moments that dictates how well you will perform in the “mad dash” times.

Are you preparing for your next mad dash? My book, OXEN – The Key To An Abundant Harvest, is a perfect resource to prepare you for a maximized financial future.

Small business owners don’t lack for things to do. There is the endless work of creating new products and improving existing ones. Meeting with new customers and existing ones – local and abroad. Hiring employees and freeing up non-performing ones to “pursue other opportunities.” You get the thrilling task of managing payroll and cash flow. You get to deal with all of the wonderful governmental entities – federal, state, and local – regarding licensing, codes, rules, laws, and endless regulations. Then, of course, there are the meetings with your CPA around tax time.

The LAST thing you need is to wonder if your financial books are correct and accurate.

Unfortunately, we hear of cases of a modern-day Judas, where a rogue employee who has been entrusted with the money decides to help themselves to it and embezzle money. It can literally bankrupt a business.

This is why it is important to conduct financial reviews and perhaps even complete third-party audits. Annual financial reviews are instances where internal members of your organization are tasked with performing random “tests” of financial records and require those in charge of the finances to provide objective evidence that records are retrievable and accurate.

Third party audits take this process to an entirely different level. An outside organization is hired to put the financial team through a rigorous test of all critical financial systems – accounts payable and receivable, payroll, record-keeping, financial reporting (balance sheet, cash flow statement, and income statement), and separation of authorities (i.e. separating rights of who can print checks from check signers).

While no review and audit can completely eliminate the chance for fraud, it can reduce it tremendously. And it will allow you to make business decisions with full confidence in your finances and the financial team.

Here’s the statement I use: “Trust, but verify.”

This post is part of a Small Business Series here at the wildly popular JosephSangl.com. Click HERE to read more of the posts in the series.