If you have had any luck learning to manage your personal finances, minimizing or eliminating debt, and growing your own net worth… chances are good your business is already serving you well financially. On the other hand, if you’ve struggled financially, starting a carpet cleaning business can actually magnify your results up to this point and make your financial situation worse. The rules and trends that allow for massive rewards and success are the same for your personal finances as they are for your carpet cleaning business. This is an extremely important topic to consider because until you can master your business’s financials it won’t matter how well you clean, success will probably elude you once more.
At the heart of financial intelligence there are just a few paramount philosophies that will enable you to become massively successful. First, spend less than you make. It sounds simple, but most people don’t ever learn this skill. Learn to live on less (much less) than what you are earning. Most people do the opposite, but as an entrepreneur this is not for you.
Second, track your expenses and understand your typical spending patterns (personally and professionally). Money can be an uncomfortable topic for many people, but keeping a close account of exactly how much comes in, goes out, and what amount you are saving and investing in and of itself will help to launch you toward success. Tracking gives you actionable data – understanding your personal expenses will let you know how much you have to earn to stay afloat. Understanding your business expenses helps you understand your profitability and enables you to make informed changes in your business aimed at maximizing your income.
Third, save and invest every month. If you’ve learned to spend (way) less than you earn, you should have a consistent supply of extra money that can be put to work for you in investments. Personally, this means saving for the future (long-term savings and investments), saving for emergencies, and if you’re not started yet: saving enough cash to get your carpet cleaning business started. As a small business owner, saving and investing means saving a cash buffer so that variations in income and unexpected expenses don’t completely derail your operation, and investing some of your earnings back into the business.
Fourth, avoid consumer debt. One could easily write an entire book on this topic, but the bottom line is you are better off if you only borrow money when it is being used to earn money. Financing equipment and using leverage in your business with other people’s money is a smart use of debt (if the rates are reasonable), but needs serious thought and consideration before you make a commitment.
Lastly, invest money and time into learning skills that earn and save you money. This is very important. Education on all fronts is one of the biggest differences between companies that succeed and all the others. Educating yourself about proper and preferred methods of cleaning different types of carpet (and/or fibers, textiles, etc.) is fun and will help your build your confidence. While cleaning carpets is simple, there are small steps that must be taken in the correct order every time to achieve consistent results. Commit to at least one class per year to expand your knowledge in the industry. By not re-investing in education, you will cost yourself and your business much more than the price of classes and associated travel.
As it’s important to learn the skills required to clean like a true professional, it’s equally important to invest in your personal knowledge. There is always more to learn about the art of sales, business, branding, money management, and effective marketing. Personal development is at the heart of all success. Assessing what areas you are already proficient in and what areas need more attention will help guide you where to start. In order for this to have a positive effect you’ll need to be extremely honest with yourself. Look to your results in life up to this point in order to gain powerful insight.
- Are you amazing at sales?
- Are you gifted in growing wealth and investing?
- Are you a marketing guru?
- Are you terrible with money?
Every person brings different skill sets and experiences to the table, and it’s fun and exciting to examine what will serve your business well in the beginning, and what will not. Investigate all the areas that you identify need improvement. If you determine you need to improve your ability to budget and save money, then buy a book on that subject and commit to making changes. Read it again and again if necessary – read every day to compound your knowledge, expand your mind and grow. Take a class or go to a seminar. No matter how good you get – you need to always continue to improve. Your commitment to continual improvement will set you apart instantly – most people settle into complacency and stop learning early on. If you can commit to always learning more, you are likely to earn more. But remember, earning more only helps when you are responsible with money and can put most of it to work for you.
Most people spend in direct proportion to the amount they earn, you’ve heard it – “the more you make, the more you spend.” Lifestyle inflation is natural, and hard to avoid unless you’re specifically on the lookout for it. Make a commitment to improve your ability to save and invest, and become better and better every week. Learn how to invest in education, real estate, stocks, mutual funds and assets that yield returns for you and your business. Never stop learning and growing – your earning ability is the most precious financial asset you posses. Becoming a master of your personal and business finances is empowering, and if done correctly, it’s a journey and a process that never stops – but the results will be worth the effort.