Better Profits Save Marriages
What kind of magic is this? Accounting strategies that are useful?
You may have heard that money is at the core of many marital arguments. but really it is how you use money that causes real problems.
Meeting with clients to prep tax returns and help with their accounting, I see so many money issues. It is not a gender thing, it usually comes from how your family understood and used money when you were growing up.
One spouse – let’s call her Mary, is from a family that never had much, so she saves rather than spends. Her money path leads to security. Mary frugally builds the family budget and sets aside money for emergencies and all those annual expense like insurance and property taxes. Meanwhile husband Jack spends dollars on the latest whiz-bang gadget for golf. And he often skips a paycheck when he wants to do some extra marketing. This destroys the budget plan that Mary had in place and sometimes leaves tax bills due on April 15th that are out of control.
Jack, the business owner spouse, believes that money fuels growth. He needs to reinvest the dollars in the business so that one day they hit the jackpot and make it to the big time. Saving money to him is cheating his future. He wants to use it now! It will come back in multiples! We will be rich! His family was used to the feast and famine cycles and always made it work. His money path is more aggressive and definitely does not include saving for rainy days.
You can imagine the arguments.
Profit First provides a way to agree on how the cash flow in the business will be used. Cash flow strategies stabilize your income as the owner and set aside tax and profit from your business. This in turn forces a stronger business to start to grow. Just like with our kids, our business will need to stand on its own and operate independently of owner capital.
Instead of the you, not being paid for your work , we look instead at expenses to trim out the ones that are not serving the business. As a result, more money flows to home and keeps the family secure.
It reduces conflict internally. Before – it was me against you, instead of moving forward. Now we have an agreed plan, an objective way to use the income and profits. It will work in your business or in your home.
You will have a business that grows in a safe and secure way. One that satisfies both business growth and family needs. Margins can double, and this increased profitability helps you bring home more cash.
What have you done to improve your business this week? Book a 15 minute video call with me today.