As a business owner, I’m always looking for ways to put more money in my pocket (or at least in my personal savings account). While it might seem daunting, there are plenty of quick, easy ways to increase your profit and take-home pay. Take these baby steps one at a time, and before you know it, you’ll be giving yourself a nice little bonus!
The Age-Old Profit Formula
If you’ve been in business for a minute, you probably already know how to calculate your profit. But just in case, here’s a refresher:
PROFIT = INCOME - EXPENSES
This simple formula is the core of everything we do as business owners. If you increase your income or decrease your expenses, you increase your profit. Easy as that!
Whenever I get overwhelmed with sales or bogged down in payments, I remind myself that everything I do comes back to this simple formula. Put your profit first, find ways to minimize expenses, and you’ll be making more money in no time!
Profit vs. Take-Home Pay
Of course, profit doesn’t necessarily equal take-home pay. Your profit is the amount of money your business keeps after expenses. Your take-home pay is the amount of money you pay yourself as the business owner.
There are plenty of reasons you might not take home 100% of your profit. Here are just a few:
Paying off debt. If you’re paying down debt on a business credit card, you might put a portion of your profit towards your payments.
Emergency savings. Your business needs an emergency fund just like you do! If you’re in the process of growing your savings account, you might want to set aside part of your profit to go towards that.
Upgrades. Have you had your eye on a new laptop? Dreaming of hiring a contractor? If you’re saving up for a business upgrade, you might save some of your profit for that instead of transferring it to your personal account.
3 Quick Ways to Increase Your Profit
While I can’t promise these tips will increase your profit immediately, I can say that they’re quick and easy to do and will help you increase your profit in the long run.
Unsubscribe from software you no longer use. (10 minutes)
How many 30-day free trials have you started and never canceled? (Guilty!) Sure, an app or subscription might only cost a few bucks a month, but that adds up! A $2.99 app adds up to $38.55 in a year, and if you pay for ten of them… Well, you get the idea.
Open your banking app, download last month’s transactions, and look at every single one. Which programs do you no longer use? Which software's aren’t really pulling their weight? Which apps could you consolidate into one do-it-all CRM? It only takes a few minutes to scan through your payments and cancel those pesky recurring expenses.
Bonus tip: While you’re at it, make a note of which expenses you don’t remember writing off last year. You might find something that flew under the radar!
Raise your prices. (30 minutes)
Before you click away, hear me out! Raising your prices takes no time at all, and it’s the single best way to make more money in your business. Plus, chances are, you’re undercharging anyway!
Take 10 minutes to sit down and calculate how much you should be charging. Then, raise your prices across your website, your CRM, and anywhere else they’re posted. If you’re feeling really bold, send an email letting current clients know you’ll be raising their rates. (Use my free email template to make it a little less nerve-wracking!)
As soon as you sell a new package at your new rate, give yourself a bonus. It’ll make you feel good about raising your prices and encourage you to sell even more.
Increase your monthly debt payment. (5 minutes)
I know it sounds counterintuitive, but paying more towards your debt means less interest payments. All that money is cash in your wallet!
If you’re currently paying $200 per month towards your business credit card, increase that amount by $50 or $100–whatever you can afford! Then, when you finally get that debt paid off, your credit card payment will become a bonus you can transfer right into your personal account. Score!
Bonus tip: While you’re messing with your credit card, why not check on your rewards? Even though you earned those rewards on your business card, they can totally be used towards personal things. Whether that’s cash back, airline miles, or gift cards, don’t forget to cash them in!
If you want to simplify your to-do list while increasing your earning potential?
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