Quick & Dirty
Q&D is a new occasional series here on the blog. In a Quick & Dirty post you get my uncensored thoughts, jotted down quickly and released. These will often be a response to something I see going on in the world, or with my clients, but it could be anything.
Remember that a Profit and Loss statement is set up to show you specifically where the money flows. Income-Expenses=Profits
You then have 3 options for how you use the profits: take them home for personal use, reinvest them in something for the company- like a new computer, a course, or even an assistant, OR you can hold on to them as “Retained Earnings”, saving them for later.
You are going to have a basic Profit and Loss report for every separate business you have. That way you can examine each of them for their own gifts and their own needs.
You also get to look at your personal cashflow, when looking at the personal cash flow, the businesses each get a single line under Money IN and/or Money OUT.
Here is where you have a chance to be really, really beautifully honest with yourself- how much of that personal development is your “happy place”, your leisure activity, or well-being and how much is essential for one of your businesses. Clearly your therapy is personal, and your financial coaching is a business expense, but many of these courses could go either way. It makes no difference to me which way you categorize any of these, but telling yourself the truth about each of these will give you an opportunity for clarity, that is powerful.
I’ve seen people lie to themselves in both directions, pretending to be less profitable that they are (because they are willing to justify a business expense, but not a personal well-being expense) AND other people pretend to be more profitable that they really are (because if they aren’t already making X amount of money, then they make-up that they have wasted their time). Both positions are ways to compromise on yourself.