to Avoid in Your
Not actively monitoring your
income and spending habits.
Want to run a financially healthy
business? You’ve got to know what’s
coming in and what’s going out!
you don’t have.
In some situations, having a little
business debt is smart (ask your
financial planner or business
advisor), but in most cases, you
can’t count on credit to give you
extra spending money. Stick to
a tight budget and build up your
cash reserve instead.
that’s not yours.
Don’t forget, you’ve got to set
aside funds for taxes and products
that you owe your clients. When
money is rolling in, it’s smart to
transfer money that isn’t yours to a
separate bank account, so you’re
not tempted to think you have
more money to spend!
Assuming what works for
others will work for you.
Forget about asking other
photographers what they’re
charging, or how they manage
their finances. You don’t know
the whole story—like how much
money they’re actually keeping
after expenses or what variables
come into play for their business.
Hiring too soon.
NinetyNine Beans recommends a
business needs about $100,000 in
additional sales to support a new
full-time employee. Sure, it’s tough
running a business by yourself,
but you need more than enough
revenue (and savings) to support
It’s incredibly easy for your finances to veer
off track when you don’t have specific financial goals holding you accountable. For
example, setting a goal to simply “make
more money” isn’t specific enough to keep
you moving forward.
Your financial goals should be SMART
➔;How much money do you need
(specific, measurable, attainable, rele-
vant and time-specific). Instead of “make
more money,” try “make 70,000 in take-
home salary by 2015.”
Use these questions to identify SMART
financial goals that make sense for your
business and for you as an individual:
to take home as a salary?
Building a sustainable photography
business requires a lot of your time, effort
and money. So it’s important to make sure
that you’re getting the return you need out
of your business. Identify a realistic salary
based on your expenses, family obligations, and be sure that this number satis-fies the SMART goal criteria.
➔;What are your savings goals?
As a business owner, it’s up to you to
plan for your future as a company and
as an individual. There are, unfortunately, no employer offers for matching
401Ks! Remember to factor your goals
for savings into your salary and gross
revenue calculations. Specifically, outline your goals for:
� Business Savings
� IRA Contributions
� Personal Savings
➔;What does this mean gross
revenue amount to?
Now that we know how much money
you want to take home and how much
money you want to save, you can work
backward to figure out how much revenue
the business needs to gross in order to
meet these numbers.
Here’s a formula to
determine your desired
Get a Grasp of
the Big- Picture
Take a realistic, HONEST look at your current situation and assess how healthy your
finances are to begin with. Knowing where
you currently stand will help you identify the challenges standing between where
you are and where you want to end up.
Use these questions to identify your current financial situation:
6Steps for Whipping Your Business into Financial Shape
Courtesy NinetyNine Beans
continued on page 54
| COUN TING YOUR BEANS |