I Scaled My Business to 8 Figures in 3 Years. Here's 4 Ways I Mastered My Finances — and How You Can Do the Same. Before taking on debt, take a hard look at yourself.
- Imagine a life where financial worries are not the focus of your operation every day. The mental bandwidth that would free up can be astounding and powerful for building your business.
- You leave money on the table if you are not accountable to a highly accurate degree.
- Leverage debt, and surround yourself with strong supporters.
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Here's a question that many startup and small business owners need to answer, and also individuals. Do you pay off debt or take on funding to grow your business? It's a complicated situation riddled with both opportunity and risk.
As the CEO of an 8-figure business that we built primarily by bootstrapping, I have a unique take on finances. For many startup owners, the focus is on a capital grab — get as much as possible to achieve and use it as needed over time, but financial mastery, the art of utilizing funding most efficiently and effectively possible, is ultimately the best route forward.
Imagine a life where financial worries are not the focus of your operation every day. The mental bandwidth that would free up can be astounding and powerful for building your business. I've found through my years of experience building a business with a lot of work and focused attention that money is a complex problem for many people. They struggle with earning too little, spending too much, or a lack of savings. I understand that. In my time and success, I've earned from experience that financial mastery comes from several approaches.
Here are the four areas to focus on in your personal and professional finances for 2024:
1. Be ruthlessly accountable
Categorize your expenses. List out everything. Create a clear and comprehensive budget that allows you to fully understand where your money goes and uncover spending patterns that could be costing you dearly. Many times, people have no idea how much money they are spending. The most timely and best practice is to use an Excel model where you input the data. This forces you to see each transaction a second time and type out the words of the actions you took.
You leave money on the table if you are not accountable to this highly accurate degree. I guarantee you will gain insight into your financial health when you closely examine this detailed level.
2. Increase your margin
The next critical step in this process is to find a way to increase your margin. You can also apply the business principles of profit and loss to your personal life in what is known as a personal financial statement. Both of these figures, P&L and PFS, are critical because they empower you to manage your money more effectively and efficiently. They give you a snapshot of your financial health at any given moment.
In personal finance, consider this a detailed budget that includes all of your expenses, income, liabilities and assets. Document everything. Update it consistently. When reviewing this information on a routine basis, you will be able to make more informed financial decisions that can empower you to gain better overall control.
3. Leverage debt
Your next objective is to leverage debt, which you should do in business. Financial mastery comes the ability to strategically use debt as a powerful tool. For example, in business, you can use debt to leverage growth by acquiring assets or expanding operations. This allows you to earn more by wisely utilizing debt.
Apply the same concept to your finances as well. Excessive debt is very risky in personal finance and must be managed with a careful level of attention. Now that you have a clearly outlined, concise budget, you can make better decisions about how to keep your money flowing. This can help you eliminate unnecessary purchases that then allow you to funnel your resources more effectively. This lets you free up some of those resources so you can pay down that expensive debt.
4. Stay disciplined
It's challenging, but building wealth and achieving true financial mastery is worth the work. That means working these three steps but also surrounding yourself with those who can support your true growth. Seek out mentors, someone who has been through the process and achieved a better outcome. Join financial forms and attend workshops. Make this your goal on an ongoing basis so you can engage with those who have mastered financial health.
It is never too soon to get started or too late to give up. The only mistake you can make in this process is not taking these steps and putting the hard work into the process.
When we started Carbliss, we were prepared to lose money for the first couple of years. And by "prepared," I mean that we are actually prepared to lose money. It was part of our plan. With this understanding, we could mitigate our worry over those inevitable losses. We trusted that if we just executed the plan, success would follow.
You can achieve these goals within your business and financial well-being as well. Apply these ideas, make a plan, and don't give up, and you will be on your way to mastering your financial well-being in your personal and professional life.