While there are things that we need to invest in to grow and sustain our businesses, overspending in your business is making it harder for you to scale. 

Because at the heart of overspending is a lack of skill around how to make the right financial investments at the right time, which leads to joining the wrong offers and not getting the return on your time and money. 

Investing in another coach because you “should have a coach” or because all of your biz besties have doesn’t mean it’s the right investment for you right now. 

In today’s episode of Harmonious Wealth, I’m guiding you through the 3-step framework for how to make financial-based decisions so you can stop overinvesting, confidently invest in the right offers at the right time, and actually see a return on your investment every time.  

03:12 — The exact questions to ask yourself to quickly determine if the offer is right for you right now 

09:18 — 3-step framework to use to evaluate an investment and understand the short- and long-term affects on your business

18:37 — How to use cashflow planning to understand your financial outlook

📚MENTIONED IN THIS EPISODE

• Cashflow Planner: lovelyfinancials.com/planner

• Profit First: https://amzn.to/3UQRFjE

🎉Enter the Harmonious Wealth Hour Giveaway! 

3 people will win a 1:1 Harmonious Wealth Hour call where we will identify your biggest financial goal for the next 12 months and create a plan for you to achieve it! 

1. Subscribe to Harmonious Wealth on YouTube and your favorite podcast app 
2. Leave a review on Apple Podcasts
3. Take a screenshot of the review and submit in the Review Form here so we can email you if you win 

You have until Thursday, April 25th to enter and we'll select three winners,  who will be notified by email!

💸Register for the Free Webinar: Your Revenue Goals Don't Matter If You Don't Have the Lifestyle and Legacy Plan to Show for It

lovelyfinancials.com/openhouse

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Email Series - Heal your relationship with money and grow wealth through your business. Each week you'll receive tips on how to face your money, improve your profit, manage the money you have and, more importnately, harness the wealth within through your faith. 

Bookkeeping - Receive bookkeeping with NO tax surprises

Profit Planning Intensive - Increase your profit by 25%

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Speaker: 00:00:00

You don't need to spend more money to make more money.

Speaker: 00:00:03

You believe that you must always invest in your business because that's what everyone

Speaker: 00:00:08

else is doing in online entrepreneurship.

Speaker: 00:00:11

While you do spend more money as you grow your business, overspending

Speaker: 00:00:15

is keeping your business stagnant.

Speaker: 00:00:18

Instead, you can create a framework for making financial decisions.

Speaker: 00:00:23

Today, I'll share exactly how to do that without sitting in

Speaker: 00:00:27

front of a spreadsheet for hours.

Speaker: 00:00:30

Stay tuned.

Speaker: 00:00:31

This is the Harmonious Wealth Podcast, where we're breaking online business

Speaker: 00:00:35

owners free from chasing every next revenue milestone and instead prioritizing

Speaker: 00:00:40

lifestyle and legacy goals so you can finally have the personal wealth

Speaker: 00:00:44

to show for your business success.

Speaker: 00:00:46

I'm your host, Iyanna Vaughn, fractional CFO and bookkeeper here to guide you.

Speaker: 00:00:51

Now let's start building your financial legacy.

: 00:00:54

Hello, welcome back to episode 12 of Harmonia's Wealth.

: 00:00:58

I am Iyana.

: 00:01:00

It's funny because sometimes I say I am, I'm Iyana and like my Iyana?

: 00:01:04

No, Iyana.

: 00:01:07

But anyway, welcome to episode 12.

: 00:01:09

We're going to continue the conversation of emotional spending in your business.

: 00:01:13

This time we're going to go over like practical ways.

: 00:01:16

to have a spending framework for your business and for yourself.

: 00:01:20

So when it comes to overspending in our businesses, we don't know

: 00:01:24

what we need to spend on what area of your business because most of

: 00:01:29

the time it's more than one Area of your business that needs attention.

: 00:01:33

We have marketing.

: 00:01:34

We have sales.

: 00:01:34

We have operations.

: 00:01:36

We have delivery we have finance we have Legal we have everything in between

: 00:01:42

like with overhead things of that nature So almost always more than one area of

: 00:01:48

your business needs attention, right?

: 00:01:51

However, we're unable to see what is most urgent in your business.

: 00:01:56

And especially if you're self funding, there's a difference in

: 00:01:59

you're getting funding to kind of invest in multiple areas or like a

: 00:02:03

significant area of your business.

: 00:02:05

But I'm talking to those who are self funded.

: 00:02:08

When you're self funded, it's kind of intricate or interesting to really see

: 00:02:13

where you should be putting your money When you're investing in a coach, you also

: 00:02:18

have two more chances than not invest in the service to implement the strategies

: 00:02:22

that you're learning I know I felt this to be a little overwhelming at the time where

: 00:02:28

I had a coach and of course It was like going from where I was right now to having

: 00:02:33

a full set team And my thought process on growing team is based off the percentage

: 00:02:38

of income so it was a great investment.

: 00:02:41

I learned so much and I actually Decreased my team at the end of the day.

: 00:02:45

I had to pause and think through, okay, if you have a coach that's helping you with

: 00:02:50

marketing, what is a team implementations,

: 00:02:53

so when it comes to overspending, we talked about this in episode 11,

: 00:02:58

but the root of overspending in your business besides emotional spending is

: 00:03:02

there is no system to make financial decisions in your life in business.

: 00:03:08

You're guessing on your financial decisions and

: 00:03:10

you're buying out of emotion.

: 00:03:12

And the solution of this is to ask yourself these questions.

: 00:03:16

the first thing, and this doesn't involve any type of

: 00:03:20

spreadsheet, is have a new zero.

: 00:03:25

You can't spend on your account until it gets a zero.

: 00:03:27

Really, no, please don't do that.

: 00:03:29

Have a new zero.

: 00:03:31

I learned this.

: 00:03:32

Years back from my leak teal and she shared that one of the things

: 00:03:37

that helped her Getting better with money is having a new zero.

: 00:03:41

So if your account goes down to let's say a thousand dollars That's your new

: 00:03:46

zero anything You can't spend once you hit a thousand or if you're not at that

: 00:03:50

place yet, maybe it's 500 Maybe it's 100 get a new zero and then grow from

: 00:03:55

there ideally You should have at least one month's worth of expenses In cash on

: 00:04:01

hand at all times in your business and ideally your life But of course we live

: 00:04:06

in a world where that's not always the case So if you want to start with having

: 00:04:10

a zero Be at a hundred dollars and two hundred and five hundred go from there.

: 00:04:15

No judgment.

: 00:04:16

Okay so ask yourself will this impact my zero in my bank account?

: 00:04:23

Next thing will be, is this impacting me on breaking even?

: 00:04:27

Because we want to have a profit in business, but there are some seasons

: 00:04:32

where profit does decrease less than that 50 percent before you pay yourself,

: 00:04:37

so will this impact you, this investment impact you from breaking even?

: 00:04:41

Will I have a net loss for a month?

: 00:04:45

Or for the next few months, because I am investing in this program.

: 00:04:49

Ask yourself that question.

: 00:04:51

Another question is, will this impact me in paying myself?

: 00:04:55

If it does.

: 00:04:56

Am I okay with that?

: 00:04:58

If I'm not okay with that, what can I do?

: 00:05:00

Another thing is does this fit and this is really important.

: 00:05:03

Does this fit both my long term and short term goals?

: 00:05:06

We talked about this in episode 11 where I shared releasing yourself from

: 00:05:10

someone else's urgency And when you do that, you have to really dig and see

: 00:05:15

is this particular launch or the offer Does it relate to my long term goals?

: 00:05:20

Because sometimes we're just buying again, off of vibes, off of emotion.

: 00:05:24

And to get out of that is to identify your specific legacy and lifestyle goals

: 00:05:31

and how the business will implement on these goals or execute on these goals.

: 00:05:35

So let me backtrack when you connect with the true wealth within,

: 00:05:40

this episode is sponsored by the wealth within weekly.

: 00:05:44

So the wealth within weekly helps you heal your relationship with money, grow your

: 00:05:48

business and dig deeper into your faith.

: 00:05:51

So sign up for the wealth within weekly at lovely financials.

: 00:05:55

com slash wealth.

: 00:05:57

The benefits of having a framework around your spending is you're able

: 00:06:01

to invest in your business guilt free.

: 00:06:03

You'll be able to identify the expectations of going into an offer

: 00:06:07

from a coaching program or a service.

: 00:06:09

And you kind of say, okay, if this is part of my goal, my expectation is

: 00:06:12

to get This out of this investment,

: 00:06:15

and you're building patience as you grow.

: 00:06:18

There's a benefit, and, when clients work with us, we help them understand not

: 00:06:24

only what they should be spending for that calendar year, but we help them understand

: 00:06:29

what their next three years looks like.

: 00:06:31

in their business so that they're out of the weeds of their business.

: 00:06:35

And they're looking at it from the trajectory of where they are now and where

: 00:06:39

they want to grow in the next three years.

: 00:06:42

So we help them understand based off of your lifestyle and legacy goals and how

: 00:06:46

you want your business to execute on that.

: 00:06:49

and serve your audience, we know, we have an idea of the leaks that you have

: 00:06:54

in your business and where to pinpoint where you should be investing in for

: 00:06:59

this year and the next few years.

: 00:07:02

Many business owners find that there is a lack in a systematic

: 00:07:06

approach when investing in their business, causing Overspending.

: 00:07:11

The consequences of that is you have a fear of missing out, like when things are

: 00:07:16

launching or when things seem great or like someone that you know is doing it.

: 00:07:22

And then you do emotional purchases based because you want to feel

: 00:07:26

accomplished and you think that others know what you don't know.

: 00:07:31

And you might be lacking confidence in a certain area of your business, and

: 00:07:35

when it comes to helping our clients, we kind of ask some questions about

: 00:07:41

their investments and we help keep them accountable for implementing what they're

: 00:07:47

learning in said investment, whether it be a coaching program or a service provider.

: 00:07:53

And we then practically help them understand where their cash is, because

: 00:07:57

within the first two weeks of working together, we have a cash flow call, and

: 00:08:02

it gives the client a sobering view of their typical cash flow for the next

: 00:08:09

12 months, so broken down in 52 weeks.

: 00:08:13

So the first 24 weeks, the first 6 months, we're looking at, okay, based off of

: 00:08:17

what you do in business, this is how your business cash flow is going to look like.

: 00:08:22

So we highlight specific opportunities for income so that they can maintain

: 00:08:26

their cash on hand, so that they can pay themselves what they need, pay

: 00:08:30

their investments, and say if they're working with us and they're, Wanting

: 00:08:34

to invest in like a program that might be big ticket will tell them exactly

: 00:08:39

how it impacts their cash on hand.

: 00:08:42

To dig deeper in the cashflow forecast, we prescribe them a new zero.

: 00:08:49

So remember I talked a few minutes ago about a new zero and based off

: 00:08:54

of their habits and their business, we're not going to go straight

: 00:08:58

into a month's worth of expenses.

: 00:09:01

We're going to kind of gear into that while also in tandem, helping them.

: 00:09:05

build their savings to three months worth of expenses.

: 00:09:11

So again, practically we help our clients understand how each and every

: 00:09:16

investment impacts their cash on hand.

: 00:09:18

Now I want to get into how to create a framework for spending in your business

: 00:09:24

Typically As we've talked about before, there is no framework for spending.

: 00:09:30

It's really investing on vibes or.

: 00:09:33

Not understanding how it aligns with you.

: 00:09:35

So I have a three step framework.

: 00:09:37

First step of the framework is ask yourself if this investment

: 00:09:40

fits with your big picture.

: 00:09:41

When we help our clients in the first week we have our legacy planning call.

: 00:09:46

And in that call, we're able to identify what would it look like for

: 00:09:50

this particular client to retire?

: 00:09:53

What would their day in the life be?

: 00:09:55

What are their immediate lifestyle goals and how can their business help them

: 00:10:00

create that and to make that a reality.

: 00:10:03

And with that, we're able to say, okay, based on your goals, this

: 00:10:06

is what your business must do.

: 00:10:08

And this helps us create a big picture plan.

: 00:10:13

So let's actually get to specifics.

: 00:10:16

Say you're looking at your business, right?

: 00:10:18

And your goal is to, of course, pay yourself 100, 000 in your business,

: 00:10:25

a buffer for retirement, And that mean, let's say you want to invest

: 00:10:29

25K in your retirement, right?

: 00:10:32

That's 125 that needs to go to you, but you need to be able to have a buffer

: 00:10:37

in place to maintain cash on hand.

: 00:10:41

Let's say another 25, 000.

: 00:10:43

So 150 times two, 300, 000 is what you need to make in your business.

: 00:10:49

In revenue so that you can satisfy those immediate lifestyle goals.

: 00:10:54

And your legacy goal.

: 00:10:56

So to make a 300, 000 business, or to make that in revenue for the year as a service

: 00:11:01

provider, specifically, you need to figure out, okay, I know I'm underpricing.

: 00:11:06

How can I make sure this offer not only increases price, but it is.

: 00:11:13

Elevated so that without a shadow of a doubt that what

: 00:11:17

you're offering has great value.

: 00:11:19

And so you have an issue with your offer.

: 00:11:22

You have an issue with, okay, you're not getting the same leads that you've

: 00:11:25

been getting for the past few years.

: 00:11:27

And then you might not be as Great in sales, right?

: 00:11:32

So you have three different things, at least, that we see that you

: 00:11:37

need support in your business.

: 00:11:38

And you're like, okay, which one should I do first, so if

: 00:11:41

you work on your offer, right?

: 00:11:42

Then that helps you with delivering better services with the clients

: 00:11:45

that you already have, okay?

: 00:11:47

Let's do the offer.

: 00:11:48

And then also when you work on your offer, you're going to be

: 00:11:51

able to show it better and then generate better leads potentially.

: 00:11:54

So if you work on your offer first, then you're able to, when you see a

: 00:11:59

service or a coaching program that relates to an offer, that's going to

: 00:12:03

be where you might invest in first.

: 00:12:05

Then the next thing is, okay, now you got your offer, you're going great.

: 00:12:09

Do you need help on your sales?

: 00:12:12

If your offer has been crafted or do you need help on generating leads?

: 00:12:16

Make that decision.

: 00:12:17

And once you have that in mind, then you're able to go from there.

: 00:12:21

That's how you kind of practically think about it.

: 00:12:23

That's how you think about it.

: 00:12:24

Of course, you have goals explicitly labeled or written out so that you're

: 00:12:30

identify what you need in your business.

: 00:12:33

And then of course you want to take some time to research on who is

: 00:12:37

the best fit for this particular investment so that you're able

: 00:12:41

to say, okay, I did my research.

: 00:12:43

I did my due diligence.

: 00:12:44

I looked at reviews.

: 00:12:45

I looked at how they offer it.

: 00:12:47

They particularly do well with people like me.

: 00:12:50

And it would be a great fit.

: 00:12:52

Things of that nature.

: 00:12:53

So the second part of the framework, after we identified how it fits

: 00:12:57

into our big picture goal, we want to understand the financial impact.

: 00:13:04

So remember the question that I asked a quick with a spreadsheet question.

: 00:13:08

Zero, like your new zero.

: 00:13:11

Does it impact your profit margin or does it avoid you?

: 00:13:15

Does it impact you breaking even does it impact you from?

: 00:13:18

Paying yourself things of that nature so we need to Evaluate the cost versus the

: 00:13:24

benefit So the immediate cost of course is if you have paid in full bonuses and

: 00:13:28

you want to do something paid in full Within a few months later you're stressed

: 00:13:32

because now You've done the investing and now you feel like you're underwater

: 00:13:35

with your cash or If you have a credit card like an amex card And while it's

: 00:13:42

cool, it's sexy little platinum card You got to pay that off in full the next

: 00:13:45

month, but you don't have that right?

: 00:13:47

So identify.

: 00:13:48

How does it fit?

: 00:13:50

Into your world financially where you are now if you don't make any

: 00:13:54

more sales How does that fit right if you make the same sales within

: 00:13:58

the first three months because it's going to take a little while, right?

: 00:14:02

I know as entrepreneurs we have that innate ability to say believe

: 00:14:06

in yourself for sure, right?

: 00:14:08

Also have the idea that if nothing changes within the first 90 days, how will

: 00:14:12

that impact your business financially?

: 00:14:15

And then the long term benefits and savings, like long term, right?

: 00:14:18

So say within the next six months, maybe you will see that change, or you

: 00:14:22

know, I've seen programs where people get their money back in 30 days, but

: 00:14:26

that's not typical potentially what if.

: 00:14:28

That doesn't happen.

: 00:14:30

So you want to be really careful of putting so much pressure on yourself to

: 00:14:35

get what you need, to kind of make that money back, but then also put enough fire

: 00:14:41

under yourself so that you're not sitting on your hands, waiting for things to grow.

: 00:14:45

You just kind of wanting someone to do the work for you.

: 00:14:48

So there's a balance between those two things.

: 00:14:50

And we talked about this before, the financial implications is, do you need

: 00:14:54

someone else on your team to implement these things that you're learning?

: 00:14:58

Do you find that you're hiring contractors, but they're doing like

: 00:15:02

multiple people's jobs and it's not working out, how does that fit into

: 00:15:05

play when it comes to your business?

: 00:15:07

The next part of your framework is making sure that you're able to

: 00:15:11

execute on that program entirely.

: 00:15:15

I talked about this before and I've experienced this where I invested in

: 00:15:19

something, paid it off, but I didn't even implement, but that was on me.

: 00:15:24

That was on me.

: 00:15:25

So you got to really, the third part of the framework is after you know

: 00:15:29

how it fits into your big picture, the financial implications of it, now

: 00:15:33

you need to be very clear and very truthful with yourself on if you're

: 00:15:39

actually able to implement at this time.

: 00:15:41

If nothing else changes with your schedule, will you be able

: 00:15:44

to implement these strategies or get the best out of the service?

: 00:15:49

So following through on your investment is your job, right?

: 00:15:53

We talked about you releasing everyone else's urgency.

: 00:15:56

But it's time to actually put urgency in the things that you actually

: 00:15:59

invest in, because you want to give it your all, give everything your

: 00:16:03

all, because if you don't, you're going to end up resenting the offer.

: 00:16:06

You're going to end up resenting the service provider and you're

: 00:16:08

going to end up resenting yourself and the business entirely.

: 00:16:12

So be mindful of if you have the capacity to commit to

: 00:16:17

something new in your business,

: 00:16:19

in episode 5, Nagina shared how using her trends and understanding her numbers was

: 00:16:27

able to get her from 30 percent profit margin on average to 72 percent profit

: 00:16:32

margin on average before she paid herself.

: 00:16:36

I remember when we were talking specifically about her business model

: 00:16:40

and the business model that she was on, she prematurely hired staff and

: 00:16:46

that highly impacted her profit.

: 00:16:48

she was able to use that data, refine her offer and lean out

: 00:16:54

her team, so that she was able to produce that high profit margin.

: 00:16:59

That's not to say that you're putting all the work on one person, but maybe

: 00:17:03

you have multiple people on your team that are doing similar things.

: 00:17:08

And now you're feeling the pain of plummeting profit because you have

: 00:17:13

too much team for your business.

: 00:17:15

So this is a good rule of thumb for anyone who's thinking about hiring a team

: 00:17:18

member for every 250, 000 that you make in revenue, you can afford potentially

: 00:17:24

to have a full time team member.

: 00:17:26

So say for instance, if you make 500, 000 besides yourself as a full team member,

: 00:17:32

you have space for one other team member.

: 00:17:34

Full time specifically that does not include like your contractor.

: 00:17:39

So use that framework to kind of see if you're able to afford a team member.

: 00:17:43

also you want to normalize fluctuations in your business, it's going to be

: 00:17:47

times when you have high revenue, especially when you're launch.

: 00:17:51

And then the next month or the next couple of months, it goes down.

: 00:17:55

That is normal, especially if you have a launch based business.

: 00:17:59

Now, our goal is to help our clients increase their monthly recurring

: 00:18:02

revenue so that we do have some control over that fluctuation, but don't

: 00:18:07

be disheartened when you have that difference in between your launches.

: 00:18:11

I talk about this in episode nine, and I talk about how do we

: 00:18:16

stop idolizing selling, and that will help you be able to like.

: 00:18:19

Detach yourself from idolizing selling and idolizing worry when things go awry.

: 00:18:25

Okay.

: 00:18:26

So part three are some practical tips to help you understand how to spend

: 00:18:33

money in your business or how to control what you spend in your business.

: 00:18:37

So typically when people learn these tips they don't take action.

: 00:18:42

That's not you.

: 00:18:43

the first thing that you should be doing, What my approach is practically, after

: 00:18:48

you've gone through the framework, You want to have a cash flow forecast in

: 00:18:55

your business, if you want to grow a multi six figure, multi seven figure

: 00:18:59

business, your business absolutely needs a projected cash flow forecast.

: 00:19:06

At least monthly.

: 00:19:07

at least monthly, if not weekly, this will allow you to be able to have

: 00:19:13

visibility in every single aspect of your business cashflow wise.

: 00:19:18

So I have the harmonious cash planner and that allows you to be

: 00:19:23

able to see from a monthly basis, how cash moves in your business.

: 00:19:28

And with personal, with our clients, we do weekly.

: 00:19:31

Another way is profit first, and that gives you specific categories or different

: 00:19:37

bank accounts to, without thinking so much about it, leave out the emotion, right?

: 00:19:43

To know where exactly your cash should go in your business.

: 00:19:47

So with profit first, you must first understand your guidelines.

: 00:19:51

So I have a profit guideline sheet that I share with my

: 00:19:55

email list on lovelyfinancials.

: 00:19:57

com slash wealth.

: 00:19:59

And I give that as a way for you to understand your profit

: 00:20:02

for the past six months.

: 00:20:03

So once you understand your profit for the past six months, you're able to then

: 00:20:07

implement profit first in your business, because now, okay, team is X percent.

: 00:20:12

Your operating expenses is X percent.

: 00:20:15

You pay yourself X percent of your revenue and so forth.

: 00:20:19

I like to use account as my guilt free spending in my business.

: 00:20:25

And finally, we talked about this before, and that is your

: 00:20:28

bank balance, your new zero.

: 00:20:31

Don't spend it till you get to zero.

: 00:20:33

Have a new zero, whether that's a hundred.

: 00:20:36

200 going to 500 going to a thousand and growing to five maybe even aiming

: 00:20:42

to go to no less than a month's worth of expenses and cash on hand

: 00:20:47

in your business at all times.

: 00:20:49

A final insight that's really important is always go to the Holy Spirit when

: 00:20:53

it comes to what you should be spending your money on, and sowing into things

: 00:20:59

like ministry, helping the poor, things of that nature, because a generous giver

: 00:21:04

is going to be an amazing receiver.

: 00:21:07

So I shared tips and how to have a framework for spending in your business.

: 00:21:13

Which one resonated with you the most?

: 00:21:16

Is it seeing how the investment fits into your big picture, understanding

: 00:21:20

the financial impact, or ensuring that you're able to execute on it or all three?

: 00:21:25

Let me know in the comments below if you're watching on YouTube.

: 00:21:28

If you're ready to join a community where women are striving to heal their

: 00:21:34

relationship with money, grow their business, and create personal wealth,

: 00:21:38

then join me on the Wealth Within series.

: 00:21:43

Each week on the Wealth Within series, I will share tips on how to face your

: 00:21:47

money, grow your profit, and manage the cash flow you already have.

: 00:21:50

Go to lovelyfinancials.

: 00:21:52

com slash wealth

: 00:21:54

you're a woman growing both your business and family and you're ready to release

: 00:21:58

the anxiety around money so that you can grow your personal wealth And

: 00:22:02

create a legacy Join me every week on Harmonious Wealth subscribe on YouTube

: 00:22:08

or wherever you listen to podcasts on.

: 00:22:11

I'm on a mission to help 100 women reach at least 1 million in net worth

: 00:22:15

to create generational wealth and obliterate generational patterns.

: 00:22:21

If this aligns with you, I'd love for you to be a part of the community.

: 00:22:24

Tune in for more episodes of Harmonious Wealth.

: 00:22:29

Hey there girlfriend, if you're ready to finally have the lifestyle

: 00:22:32

and legacy to show for your business success, I would love for you to

: 00:22:35

click that subscribe button on your favorite podcast app or YouTube.