TAS 470: Business Cashflow and When to Pay Yourself Profit

It's the question that weighs on the minds of many small business owners, “When do I draw a salary or profit?” If you aren’t asking yourself this question, it's only a matter of time before you do. What’s the answer? What is a good rule of thumb to go by so you don’t hurt your business prematurely? On this episode of The Amazing Seller, Scott goes of his mindset and what he suggests for new ecommerce sellers as they consider this question. Don’t wrestle with this question without getting an expert perspective! Scott has been a small business owner and an ecommerce seller in particular for many years and only wants to help sellers like you succeed. Don’t miss this helpful and valuable episode!

Don’t neglect the importance of bookkeeping!

It’s that unsexy topic that no one really enjoys talking about (except for maybe accountants), bookkeeping. As boring and complicated as this topic can be, it is supremely important for small business owners to take it seriously and keep things in order from day one. On this episode of The Amazing Seller, you’ll hear from Scott as he explains the importance of good bookkeeping habits and helpful tools you can use to stay on top of it. Make sure you don’t cut corners on this vital aspect of your business! Learn what you need to get started and keep your new ecommerce business on solid footing by listening to this episode!

You’ve got to have the right mindset if you want to succeed.

As eager as you may be to pull a profit from your business when things start rolling, you need to have a patient mindset. Before you even start, it's a good idea to commit to waiting to draw a profit for at least six months. On this episode of The Amazing Seller, you’ll hear from Scott as he breaks down his reasoning for why sellers like you need to embrace the mindset of waiting for six months. The thought process behind this mindset is that instead of drawing a profit, you take that money and reinvest it into your ecommerce business. You can reinvest into your business by starting new sub-brands, launching new products, hiring virtual assistants, and much more. To hear more about this important topic, listen to this episode!

If you don’t put yourself as a line item, you will never get paid!

While many small business owners need to fight the temptation to draw a salary when they see their first bit of profit coming in, others who will be so focused on the businesses success that they never draw a salary for themselves. On this episode of The Amazing Seller, Scott shares a resource that has been helpful to him as he has navigated the question of when to start drawing a salary for himself. That resource is the book, “Profit First” by Mike Michalowicz, you can find a link to the book in the resources section at the end of this post. Don’t worry about drawing a full salary at first, you can ease yourself into the equation, the point is, you’ve got to determine when to start putting yourself on the books. Make sure to listen to this episode as Scott expands on this important lesson.

Why you need to create a plan and goal for launching new products.

One of the most important lessons that you need to put in place, as an ecommerce business owner is setting a goal for growth. Do you have a goal and a plan in place for launching new products? Does your goal push and stretch you? On this episode of The Amazing Seller, Scott explains why it’s important to have an ambitious plan in place to grow your business by launching new products. If you don’t have a plan in place and line item in the budget to launch new products, you’ll never do it! Don’t let your business become complacent, find out how to pursue growth in a smart and aggressive way on this episode!

OUTLINE OF THIS EPISODE OF THE AMAZING SELLER

• [0:03] Scott’s introduction to this episode of the podcast!
• [5:30] Don’t dismiss the importance of bookkeeping.
• [10:00] You’ve got to have the right mindset.
• [16:00] Apply for a credit card for your business.
• [23:00] When it’s a good idea to start drawing a salary.
• [26:30] Plan your future inventory and orders due.
• [29:00] Scott recaps how to get more cashflow.
• [30:30] Create a plan and a goal for launching new products.

RESOURCES MENTIONED IN THIS EPISODE

• www.theamazingseller.com/workshop
• Profit First
• Wave
• www.theamazingseller.com/fetcher