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It’s not how much you’re earning. It’s how much you’re keeping.

Let’s talk profit margins.

I know, I know. Profit + margins = not exactly the two sexiest sounding words in the English language. But this is going to be a pleasurable conversation, I promise. 😉

It’s always super impressive sounding to hear, Oh, yeah, I had a six figure product launchor I am running a seven figure business in my pajamas(immediately followed by a Beyonce hair flip.)

But the real question is:

“OK… but how much of that money are you actually keeping?”

Because at the end of the day, if you want to run a profitable, sustainable business, it’s not just about how much you are earning. It’s about how much you are spending, and ultimately, how much you are keeping!

I watch a lot of smart, talented business owners spending a LOT of money needlessly and it makes me feel cringe-y inside.

Sure, there are plenty of ways that you “could” spend money to grow or enhance your business — business coaching, mastermind groups, clubs, associations, memberships, hiring a virtual assistant, graphic designer, copywriter, website coder, online community manager, chakra healer, dog whisperer, M&M color-sorter, what have you.

Some of these costs might be valid, sensible, and appropriate.

But often? In my humble opinion: people spend a lot of money on seemingly necessary “business expenses” that they don’t urgently need… and / or, overcomplicate their business model, making it costlier than it needs to be.

If you tend to, ahem, “over-invest” in your business, spending money you don’t really need to spend, you don’t have to get all self-judgy and weepy about it.

Investing in your business is not a “bad” thing and you haven’t done anything “wrong.” Just try to become a bit more aware of where your moola is going, and make spending decisions carefully, so that you can start keeping even more of what you make! 🙂

Here is my biggest piece of advice for you:

First & foremost: get clear about what kind of business you truly want to run.

Do you want to run a super lean business —like me, or like Shenee, Alex, Theresa, or Paul?

If you’re like us, then reaching millions of customers might not be a top priority for you. You’re cool with serving a small-but-mighty fan base of people who are obsessed with you.

With a lean business, it’s usually fairly easy to keep your expenses low. Aside from hiring specialty contractors (like someone to build your website, or someone to take professional photos of you) you probably won’t need anyone on your “team.” Maybe occasional hires for special projects. But probably not all the time.

Or maybe a super lean business is NOT your vision. Maybe you want to go BIG.

Maybe you want to do an international workshop tour with events in fifteen different cities and tons of moving parts.

Or maybe you want to run a brick and mortar-style business, like Brandon—one that requires a shop or restaurant space, set up costs, ingredients and other materials, plus a team to help you serve your customers efficiently because you only have two hands and there is noooo way you could do it all alone! That’s groovy, too.

No business vision or model is “better”or “worse” than any other —it’s just a matter of figuring out what you truly want to do!

Just remember that the more complex your business vision is, the higher your costs are likely to be, which means that even if you are “earning seven figures a year,” you are NOT actually PAYING yourself seven figures a year. Not even close.

I’m no accounting or finance expert —and I can’t tell you which kind of business model is “right” for you.

But between running a high-profit business for over a decade and having a husband who is freakishly good with numbers, I’ve personally found that running a simple and lean business with limited expenses is what feels most pleasurable for me.

The next time you sit down to do some life and business planning, I want you to think about a couple of things:

:: What kind of day-to-day lifestyle / stress level do I want?

:: What kind of business model is most likely to help me feel that way?

:: If that kind of model is truly what I want, then what do I really need to spend to get it rocking and rolling?

:: Are there certain things I could learn to do myself, at least in the early stages, to lower my expenses and keep more cash in my pocket?

:: Is there ANY way I could simplify my business vision, without sacrificing my intention, to make it less expensive to get rolling?

:: How much revenue do I project I am going to rake in for the next year? Three years? Five years?

:: Ultimately, how much do I want to PAY myself per year?

:: With the business model that I am currently envisioning, how much revenue will I need to bring in to make that salary happen?

Remember:

Ultimately, its not how much youre earning. Its how much youre keeping.

Earn as much as you can.

Spend just as much as you truly need to — but no more.

It’s not rocket science. Just common sense. You got this.