Have you ever enjoyed a meal and gorged yourself to such an extent that you had no room left for dessert? Were you disappointed? Did you scold yourself for not planning ahead? Were you sad as you watched others indulge in dessert decadence and listen to them go on and on at length describing how delicious it was? Did you declare that, “Next time will be different!”. But when next time came and went, it wasn’t different?
You are not alone.
This same process is repeated every day in the business world. Business owners gorge themselves on Expenses (meals) only to discover there are no Profits (desserts) left at the end of the year. The next year, they vow it will be different. But it’s not. The discipline to curb expenses when the cash if flowing is more difficult than you expect. The same as it is challenging to turn down second helpings when the host/hostess is so kind and generous.
So how do you change?
Take your indulgence first!
For me, dessert is a necessity of life. It may or may not have something to do with my parents taking my sisters and I to Dairy Queen for dinner on Friday nights. Nothing like a banana split to make you feel great, sleep like a log and be up before the sun for Saturday morning cartoons!!
Fast forward to adulthood. I am a person that loves flavours, so when mealtime comes around, it is easy for me to overindulge in the meal and leave no capacity for dessert. So disappointing. Desserts are my favourite food group. I knew there had to be a better way to ensure that dessert was a priority.
Experiment #1: Eat only dessert. That was fun for a (short) while, but it caused sugar hangovers, I was tired all the time and I suffered from chronic brain fog.
Experiment #2: Eat dessert first. Sounded smart until reality reminded me that I love flavour and I was only reversing the problem by overindulging in dessert, leaving no room for a nutritious meal.
Experiment #3: Eat dinner and dessert together. Too confusing and socially frowned upon. Enough said!
Experiment #4: Enjoy a dessert-type “amuse bouche” before each meal. This (literally) fed my sweet tooth and served as a Pavlov reminder that if I consumed nutritious, portion-controlled meals that I would definitely have room for dessert later on.
Wait a minute, I thought we were talking about business?
Make your Profit a Priority!
How do you do this?
Running a business is a complicated matrix of decisions and consequences. When you are involved in the day to day, there is often pressure to make decisions on the fly, such a buying new technology at a great price or hiring a new employee before determining whether the business can support the expansion. Society often rewards this type of snap decision mentality but too often, I see business owners struggling with the financial burden of their spending decisions.
Why this happens is simple. When the pressure is on to make that financial decision, we immediately look to our bank balance and ask ourselves if we can afford the expense. If it looks like a ‘yes’, then the money is spent. But what if that money represented a year’s worth of profit? Would we have parted with it so quickly? I like to think the answer is ‘no’.
The good news is that we can leverage this bank balance accounting system!
To break the habit of overindulging in expenses and leaving nothing in the profit column, we can use my Experiment #4 from above. Our amuse bouche is a calculated (small) percentage of our incoming cash which is then transferred to a designated Savings bank account so that it won’t be a factor in future snap decisions.
Here’s how to start:
- Open a Savings account – preferably one that earns interest
- Deposit your “amuse bouche” to this account twice a month, on the 10th and 25th
- Carefully select and consume only the necessary (nutritious) Expenses to ensure there will be more Profits (desserts) available later on
- Reward yourself for running a profitable business
It took time for me to build this habit. I did not do it alone, and you don’t have to either.
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