Why You Should Create A Money System For Your Cleaning Business
Before I started a house cleaning business, I owned a corporate gift basket business. The branch manager of my bank was one of my customers.
One day while delivering a couple of gift baskets to this manager, I chatted with her about my account.
My business checking account was overdrawn and I wanted to discuss the fees with her.
She quickly scanned the account and said in a matter-of-fact tone, “This seems to be the third time this year your account is overdrawn”.
I didn’t know what to say. I stammered out a weak excuse about being extremely busy.
The manager nodded and suggested I sign up for the bank’s overdraft plan. She gave me an application for the plan.
We made more small talk about other things and she paid for the gifts I just delivered.
Yikes! What A Mess!
Driving back to my office, I was overcome with shock and embarrassment.
My checking account had been overdrawn three times in a year.
Three times. What a mess!
I realized I’d been so focused on creating, selling and delivering gifts that I had completely neglected what happened to the money I earned.
I knew I didn’t need an overdraft plan from the bank. I needed to get my finances in order.
I needed a system to make sure I never bounced another check.
Burning Through Financial Fog
Groping around in a financial fog is the worst feeling for a business owner or anyone.
As a business owner, you know money is coming in. After all, you collect the checks and get notifications about customer credit card payments.
However, things can get hazy when your earnings hit your checking account.
Without A System You’re Drifting
Without a system, it is too easy to drift around in a fog unaware of the next bill or expense until it bumps into you.
It’s easy to forget bills, tax payments or overdraw your account several times a year. You can end up paying outrageous fees as a result.
Worse, you work hard every day and have no savings.
A business emergency fund is a distant dream. A retirement fund seems out of the question.
4 Advantages Of A Money System
When you set up a money system you can burn through that fog. Step by step, you can see clear patches ahead. Finally, you can:
The good news is a money system for your cleaning business doesn’t have be complicated.
It won’t take weeks of learning to set it up. Nor does running a money system have to gobble up hours of your time.
Like house cleaning, a money system runs on the right tools and regular maintenance.
Money System Basics
In this podcast interview, financial coach, Keina Newell of Wealth Over Now talks with Brooke, one of her coaching clients about business finances.
Brooke is a self-employed business owner and mother of two children.
She decided to become clear about managing her money after a couple of years running her business.
In this 35 minute interview, Brooke describes the money system she set up with Keina’s help.
Reshaping Your Business Finances In the Midst Of Uncertainty With Brooke
Highlights of their talk included:
9:00 Dealing with income fluctuations when your income varies from month to month.
10:56 Knowing your income numbers and evaluating expenses.
12:45 The importance of a spending plan.
13:25 Knowing your business numbers so you can invest in your professional development and business growth with full knowledge of where you stand.
16:10 Taking calculated risks and making plans because you are clear about your money.
17:00 Using bi-weekly (every two weeks) “money dates” to manage your money and stay on top of your numbers.
19:00 How having a spending plan helps you set income goals for each month.
20:58 How to pay yourself consistently and with confidence twice per month.
24:00 Brooke describes what she does during her bi-weekly 15 minute money dates.
Brooke’s money date activities include:
29:25 Why Brooke works with a financial coach? How a financial coach is different from a tax preparer, accountant or bookkeeper?
Number One Benefit
An upside to being a self-employed house cleaner is the weekly flow of money into your business. That weekly flow also has a downside.
Without a plan it’s so easy to let that weekly flow of money slip through your fingers.
I know how easy it is to spend without thinking because I did it too—for years.
For me, the number one benefit to managing business income is clarity.
I know where every dollar is coming from. I know where every dollar is going.
I know exactly how much my expenses and taxes are and how I’m going to pay for them.
My Personal Changes and Benefits
When my house cleaning business was still new, I set up an allocation system to portion my income each week.
I learned to set aside money for everything from taxes to supplies.
I even set up a Christmas bonus for myself each year, so I didn’t have to go into debt to enjoy the holidays.
Over time, I set up an overdraft fund for my business checking account to avoid overdrawing my account and bouncing checks.
I call that my “sleep at night” fund.
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Set Up Your Money System
With a money allocation system, you portion your earnings at the end of each week.
You then transfer those portioned amounts into dedicated savings sub-accounts set up to hold money for expenses like:
A Money System Serves You
You can stop the drift. Take steps today to set up a money system.
Make sure you know what is coming in, what is going out and what you are saving.
When you have a money system set up, you no longer find yourself forgetting taxes.
Nor will you stress out about how to pay for next month’s supplies. You have a system and you have them covered.
Even Emergencies Can Be Covered
If your car’s transmission blows out and it costs $2000 to fix, you will stress out about that! 🤯
However, with a solid money system in place you may be able to cover all or most of that repair from your savings.
Imagine the relief of being able to handle something like that.
The money that flows through your business should serve you and your needs.
Break through your financial fog and enjoy the light. A money system makes that happen.
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