By the time money gets passed into my hand from the customer I think to myself I have successfully executed a job (given I have signed a certificate for them and that they are pleased with the work I put forward). That is one more off the list of jobs on my whiteboard needing to be completed. I am happy that I have given a required solution to a customer in exchange for money I can use to buy an experience of some sort but for me running a business and all it’s not that black and white. There is a saying which goes something like, ‘you have to spend money to make money’. In my business this cannot be truer.
I go by the belief that money is used to buy experiences and is earned by giving an experience to someone else. I derived this from my favourite blogger Mark Mason and one of Richard Branson’s many books (I can’t remember which one). So logically to suceed in business one must give the best amount of value to their customer to ensure they get the best experience possible with the amount of money they are paying. In my case, I give the experience of a factory working as efficiently as possible or a household owner feeling proud about the house they live in. At the moment all my focus lately has been on making the systems and operations in my business as efficient as possible to allow it to give as much as possible with the least hassle. It’s very difficult and has me pivoting methods a lot, but I know I will get there.
Handling money is a challenging one since the business relies a lot on money for it to survive. I have paying the tax agency to worry about, I have to put money aside for super, I have purchase accounts with electrical wholesalers I need to stay on top of, I have bills of my own to pay, and also important I have to pay the workers that work under me. I need to perfect a system to stay on top of this. At the moment I am calculating everything that comes into the business’s pocket and allocating it by percentages. I’ll give the rough breakdown below:
Money Earned After Material Deducted: $3000
Into Tax Account: $900
Income After Tax: $2100
Home Loan Payment:
Dept Payment (places I owe dept else to savings): 20%
Commission to Pleasure Savings (I can use this money to #treatmyself): 10% = $117.36
I put the rest of the money in a high-interest ING bank account which acts as my nest in which I use to pay my day to day expenses. I also donate 10% of this amount to a charity to feel like I have more than enough and also 10% to a high-risk investment account in which I use to take risky investments such as bitcoin and stock market shares.
As you can see more then 50% of my money does not go into my pocket but instead gets saved for business growth and maintaining purposes, to not piss off the taxman, to prosper long term and also to fund my eventual retirement (if I ever decide to retire). So far this has been working well. Three months later and I have been able to save my perceived home loan rates for a 500k loan, and I have a lot of money saved up in my super and tax account to keep me sane for the rest of the year.
There are weeks I am forced to scrape due to being a bit too greedy with money in the nest or when I haven’t got paid by customers in a while. That’s when I have the strategy of eating less, treating myself less (although eating less covers this), working my ass off and also calling and disrupting customers who aren’t paying! Although I do scrape, there is still money going into my home loan fund so it is happy to know that I would still be able to live under a roof even if business gets sour.
To conclude, the real challenge comes from providing an excellent customer service experience with my business, adhering to my promised values and most importantly working hard. A great saying by Warren Buffet goes, ‘A business which is focused on customer service only has one thing to worry about when it comes to profits, they will be embarrassingly large’. So the business game aims to love your craft, provide an excellent customer experience with the least amount of friction and most importantly be human. Being human is the most critical fundamental of going by your day to day grind. More about that later!