Create a Budget for Success: How I Tripled My Income in Two Weeks
Author: Lisa Jacobs
I’m Lisa Jacobs and I own the Energy Shop, where I sell handmade jewelry to people all over the world. Though I’ve been in business for over two years and earned a substantial second income for my family, until recently, my business finances have been unstable at best.
Until recently, there was no method to my financial madness.
I randomly paid myself, ordered supplies at will, and sporadically bought advertisements. Recurring monthly bills associated with my business never failed to surprise me. I always walked away from the notice wondering, “This again? When am I going to be able to pay it?”
Can you relate? When it comes to your creative business' finances, how often have you felt afraid, resistant, hesitant, and uncertain?
The first three years of business are part plan, part flying by the seat of your pants.
It’s hard to predict an income, so I’ve chosen not to–and I would suggest you do the same.
You’re lucky if you’re funding your own growth in the beginning stages of your shop. At the same time, you need to market yourself. Therefore, you need money that you can feel comfortable spending.
The financial plan I’m discussing today is based on the Balanced Money Formula (I learned about this from J.D. Roth and it’s credited to All Your Worth: The Ultimate Lifetime Money Plan).
Of your take home-pay, 50% is allotted to needs, 30% to wants, and 20% goes to savings. You can read all about it here: The Balanced Money Formula.
I love the idea, and it’s given me great peace of mind in my personal financial planning.
I decided to apply the Balanced Money Formula to my earned income from the Energy Shop. After one month of using this method, I’ve never felt so comfortable with my business finances; I’m on top of my bills and paying myself more than ever at the same time. In fact, I tripled my income in two weeks.
Here's what happened:
The first week I applied the 50-30-20 plan, I stopped spending and saved all of my earnings for 7 days. There was approximately $350 in my account.
50% Needs: I purchased $175 in supplies.
30% Marketing: I set my Facebook ads for 7 days at $15 per day, renewing an ad that performed well for me in the past.
20% Pay: I sent the remaining $85 to my personal checking account. Payday!
Now I know that $85 doesn’t sound like a lot. I’d like to pay myself more after a long week, yet it felt so good! When I sent that $85, I knew that it was what I could rightfully take from the account and still attend to all of the other necessary matters in business.
As the week progressed, it became clear that my Facebook ads were performing exceptionally well. It was hard to stop looking at the growing balance in my Paypal account, and I could hardly wait to divvy the next week’s earnings.
In seven days, I had an outstanding balance of $1,351.63!
50% Needs: I spent $675.82 on the next batch of needs and supplies for the business.
30% Marketing: I renewed the same ads, and started another one geared toward a new and different target audience. This week, my daily budget was a whopping $57 per day.
20% Pay: I paid myself $270! Getting much better!
This is both calming and exciting! It feels like I have control. I know I won’t accidentally bankrupt myself with a new project idea … right before my monthly bills roll in. I’ve learned how to budget with what I have, and there’s nothing better than feeling like you’re operating within your means.
Once I was all caught up on expenses and more in control, I changed my plan to pay myself a better percentage of the profit. If you'd like more details about this plan or more business advice for jewelry designers, you're welcome to a free copy of my Budget for Success Report from Marketing Creativity.
I'd like to thank Tracy and Robin for allowing me to share with you today! I wish you all continued success~
Lisa Jacobs writes Marketing Creativity for fellow creative spirits who aim to build a career with their own two hands. She leads group webinar programs and offers one-on-one coaching designed to help you get paid to be … you.