Entrepreneurs, Here are 6 Money Habits That Will Increase Your Cash Flow and Wealth

Welcome to the latest edition of the Profit + Prosper LinkedIn Newsletter for Entrepreneurs! Make sure to subscribe to the newsletter and follow Sarah for even more updates and insights on finance and business.

So you’re committed to getting your business finances in order - I love to see it! It can still be hard to figure out where to start with your finances, so in this edition I’m sharing six money habits to get your finances in order, increase cash flow, and generate wealth. Whether you feel like you need a total overhaul, or just want to be more intentional day-to-day in your finances, I have a bunch of actionable steps that you can take - just implement one habit at a time!

“Profit” seems to be a buzzword these days. So many people have added “profitability” to their marketing saying that they’ll help you bring in more sales and/or become more efficient.

But… none of those things on their own will actually result in more money in your pocket!

Because you can bring all the money you want in the door, but if you don’t manage it well, and intentionally save and invest, you will not create more profit or become more wealthy.

You have to be a good steward of money, and that all comes down to your daily habits.

You’ve got to take ownership of your finances. I don’t care if it’s not your zone of genius, if it bores you, if you’re “bad at numbers”. If you want to be wealthy, you have to take responsibility for creating it.

And this is where I think I lose people – because this is where we start to get uncomfortable, when we look at our financial habits and really get clear on what you’re doing to the cash flow in your business. It’s hard to look under the hood. It’s even harder to actually change your habits - and this is why business owners hire people like me.

6 MONEY HABITS THAT ACTUALLY BUILD WEALTH

Act like a legit business

Don’t treat your business like it’s a hobby or run around with an employee mindset - instead, view it as a valid source of income.?

Go set up that LLC and use a separate bank account for your business to keep everything organized.

Use payment processing systems designed for business, not PayPal friends and family or your personal venmo account.

Stay on top of your tax requirements! They aren’t going to disappear if you ignore them.

Use real contracts and stop charging crazy low rates. Don’t act like a freelancer.

Set intentional goals

Many business owners are chasing vanity metrics instead of asking themselves what the real purpose of their business is.

Seven figures sounds great, but instead, let’s get clear on a few things:

• How much do you need to retire or become financially free? How much do you need to be saving and investing to reach that goal?
• How much do you need to pay yourself?
• How much will it cost to hire your dream team and grow your business?
• And how much revenue do you actually need to afford all that?

That’s your real goal. Get in the habit of revisiting this goal on a regular basis and tracking your progress against it.

Know your numbers

Any savvy, successful CEO is going to know their numbers because their numbers allow them to make fast decisions for the good of their business.

They aren’t waiting until January to pull their numbers together just to enter on their tax return.

Here are a few key numbers you should know:

• Sales trends - how much you’re making, on which products, by month or by customer/project
• Expenses - how much does it cost to run your business every month?
• How much are you paying yourself for your CEO salary?
• How much is going to taxes?
• How much is left over in profit?

Spend less than you bring in

A successful business is one where you’re able to maximize the return on the time and money you put in. That’s what we call ROI!

Many people keep spending and spending - on the next course or program, or consultant, or software system - thinking that’s going to be the thing that finally makes them successful.

I’m not saying you should never spend money, but instead, get in the habit of using what you already have at your disposal - your skills, time, team, anything you’ve already created - to its fullest potential first, before you go spending on something new.

Use debt responsibly

So many people are afraid of debt - and it’s no wonder, based on all the negative press we see on student loans, credit card debt, and the US national debt.

Sure, make sure you’re not using debt as a crutch to cover up poor cash flow, but -?

One thing wealthy people do is they know how to use debt to their advantage, to invest in something that will give you a bigger return than you would have gotten on your own. Taking on debt actually helps them to increase their cash flow.

Step 1 is to pay off debt that isn’t increasing your cash flow - things like car loans or credit cards, and debt with really high interest rates. You’ll do this by have a business that produces cash flow.

Step 2 is to get in that business owner mindset and figure out if you can use debt to your advantage!

Allocate your money to your priorities

If you want to become wealthy, you have to build your wealth.?

That means that you have to allocate money toward savings and investing, on top of paying yourself a CEO salary.?

Your salary isn’t what’s going to make you wealthy - assets make you wealthy. Assets like stocks in a retirement account, income from real estate, or royalties from books or licensing agreements. This is what we call “passive income” - money coming in without you having to work for it.

In Episode 4 of the Profit + Prosper podcast, I’m talking about 6 money habits that will increase your cash flow.

Here’s what we’ll cover:

• Why more sales won’t make you wealthy
• Why increasing your profitability and building wealth actually comes down to your money habits
• 6 money habits that will improve your cash flow and net worth

?? Click here to listen to the full episode - 04: 6 Money Habits to Implement for More Cash Flow and Wealth

Let me know in the comments - which habit will you implement next in your business?

Do you want even more insights on building your first $1M in net worth from your business? Sign up for my free email newsletter, Millionaire Mondays, where I share tactics and strategies for increasing your cash flow, making smart investments, and saving on taxes as you build your wealth.

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