Writing this blog sometimes puts me on mailing lists that I don’t recall subscribing to …

But, I am usually pleasantly surprised by what I see (if not, the <delete> key is a quick’n’easy solution) … so, I am usually quite happy to see some ‘surprises’ in my in-box (please don’t send me Viagra ads or other spam!).

An example of a ‘pleasant surprise’ was an article from Leigh Ann Rodgers of Creative Business Workshops called “Where does your business stand financially?” In it she said:

 In February when I pulled together all my financial information for taxes, I had an “ah ha” moment. I spent too much on my business last year! My profits would have been much higher if I had been more conscientious about my spending.

 Aha!

Here is how you should look at your business …

… exactly as you would yourself!

That means that your business also goes through three stages:

Making Money 101 – where your business is struggling to get ahead; not making as much as it should.

You need to apply exactly the same money-saving and budgeting techniques as you would for yourself. Here is what Leigh Ann recommends:

It hit me like a ton of bricks, that I need to apply these same [Making Money 101] principles to my business. I need to budget each month and only make purchases that I can pay cash for. I must admit that I have sometimes been a little loose when making purchases for my business, rationalizing that I could “write it off.” Now, I am thinking about every penny I spend.

 I agree … 99%.

But, you should NOT be stingy about any expense that DIRECTLY helps you grow your business (that means that you can track the $1 that you spend today to at least $2 to $3 earned within your current financial period, say, no more than a few months to a year).

Because it is this thinking that will take you into:

Making Money 201 – where your business is doing better than breaking even … now it’s full steam ahead!

You are saving money and watching costs, sure. But, you have realized that there is something that you can – and should – be doing that produces a far better result than mere cost-cutting …

… that is, accelerating your income!

 Why?

Cost-cutting is limited in scope … you can’t cut more than 100% of an expense.

Income-earning is unlimited in scope … the sky – nay, the stars – are the limit!

But, when the income is the greatest, you need to watch your costs even closer because bad habits – leading to hidden gotcha’s – creep in.

It is the Making Money 101 habits that will help you survive the increasing drain on your cash-flow that uncapped growth can bring.

If you do, may be one of the lucky ones who ends up in:

Making Money 301 – that idyllic stage where the business is floating in orbit, spinning off cash, controlling costs and just being … well… damn profitable!

Watch out for stagnation, though, because this is where product life-cycles wind their course, competitors come in, commodity pricing appears.

The secret to Making Money 301 is NOT to sit there for long … either:

1. Put yourself back into Making Money 201 – new ideas, new products, new markets, go off shore, become a franchisor … OR

2. Sell! 

But, it all starts with a business that survives the Making Money 101 stage … unfortunately, the odds are against you.

But, Leigh Ann has a great Making Money 101 tool to help you out:

Here is her Where do I $tand Worksheet …

Why don’t you try it out?