Expenses Running a Multi 6-Figure Business
You know I love to keep it #real with you, and show you as best I can what goes on behind the scenes of my biz - both with the mindset and the numbers.
So, the other day when my accountant sent over my balance sheet and profit and loss statement for 2020 I knew I had to share the goods with you.
There was no surprise with my sales - I keep a close eye on my cash flow and sales each month.
I was more so curious about what it actually cost me to run my business last year.
Let’s dive into what it cost me to run a $300K+ biz last year.
My top expenses are shared below were (drumroll please)…
1. BANK FEES
Sit down for this one…
I spent $10,092.05 in bank fees - which meant I paid out over $10K to Paypal and Stripe (my payment processors) simply to receive payment from clients.
It SHOCKED me. I literally had to do a double-take.
“$10K IN BANK FEES? WHAT?!”
But then I realized, I GET to pay $10K in bank fees.
You see, no fee payouts = no business income.
You have to pay to play.
If you’re trying to build a business using cumbersome, archaic methods of doing things just for the sake of saving a buck, you’re most likely costing yourself more money than it would to invest in something.
The other week I went to pay someone for her workshop when I noticed that her PayPal was set up in a strange way that made it difficult to actually pay her.
I messaged her: "Don’t you have a business PayPal account?"
Response: "No, they charge fees?"
Facepalm moment.
STOP MAKING IT DIFFICULT TO MAKE MONEY. If I didn’t know her personally, I wouldn't have signed up simply because the process was confusing.
I get it though. Switching from a personal money mindset to a biz money mindset can feel weird.
But it's necessary.
One of the best money mindset lessons I had to learn early on in my business was to know there was a difference between how I treated my personal money versus my business money.
2. PERSONAL DEVELOPMENT
This one was no surprise to me - I spent $26,541.24 on “personal development” last year which means the coaching that I invested in. I’m a coach so I fully understand and see the ROI when I work with a coach. When I find someone I know can help me, I don’t hesitate to invest.
It’s been this way since day 1 of my business and I feel one of the biggest reasons my business continues to grow exponentially each year.
(p.s. - if you’re curious about working together 1:1 go here)
3. ADVERTISING
Last year I spent $6,880.23 on Facebook & Instagram ads. That number might seem high to you, or maybe low - I dunno, but what I do know is that I want to 5x that this year.
Yes, in 2021 I’d like to spend $30K on ads (at least). “WHY?” might you ask.
Because I can clearly see a return on my investment. My Facebook ads perform super well. And while I don’t have the exact number, let’s guess that for every $1 I spend on ads to attract a new person into my community - I make at least $2 back in return.
It’s a no-brainer.
If you went to Las Vegas and there was a slot machine that said “Put in $1 and get $2 back!” you wouldn’t hesitate to put your $1 in that slot machine. In fact, you’d sit there all day if they let you and just keep playing it all day long. Why? Because it keeps giving you back more!
No investing in more ads is like me seeing that golden slot machine but saying “nah, not today...maybe tomorrow”. Not the smartest business decision.
Once again, it’s switching from a personal money mindset to a business one.
4. VIRTUAL ASSISTANT
This one I’m kinda kicking myself that I didn’t spend more. I paid $5,312.04 to an assistant last year. I am the first to admit that I need to consciously work BIG time in the whole delegation department. The “I can just do it faster myself” mentality has GOT to stop when you get to a certain point in your business. I really have to practice this big time, and stretch myself to delegate more and more.
This year, I feel I already have much more in place to ensure I’m passing off a lot more tasks to my team.
5. OVERALL EXPENSES
As a percentage of my “profits” my expenses (outside of my salary) were 27.5%. Meaning that for every $1 I brought into my business I invested $0.27 back into my business for growth. I’m super happy with that.
GENERAL THOUGHTS…
So often people are scared of fees, going to a higher tax bracket, spending money on hired help (because after all, you can do it, right?), or getting the paid version of an app or program you use.
I had a client once who literally stopped herself from making more sales because then she would have to go to a higher tax bracket. I said to her, “I would rather make an extra $10,000 and pay 35% taxes, than make NO extra money and pay NO taxes.”
Simple math.
I hope you enjoyed snooping around my expenses for 2020, and thanks for being here!
As a little reminder for yourself...
It's okay to go to the higher tax bracket.
It's okay to pay bank fees.
It’s okay to invest in things that you can do yourself.
It’s okay to pay for the upgraded platform.
I hope that I'm blessed enough in 2021 to pay $30K+ in bank fees, because that means I did over $1M in sales.
And THAT gets me excited.
What’s your biggest takeaway from this blog today? Let me know how this helped you!