“You can get past the dead end. You can break through the ceiling. I did and so have countless others.”

Finance Tip Friday #24: Pay Yourself First!

Money Online Earn Business  - mohamed_hassan / Pixabay

It is very important to ensure you are paying yourself first in your business! There is a great book called Profits First by Mike Michalowicz that every small business owner should read but I am just going to mention the main point here.

When you have a business, money comes into the account and then it is spent on expenses to keep the business operational. What is left over should be your profit. It is very simple, yet nurse practitioner entrepreneurs tend to over complicate this (hell, most business owners do).

Here is a simple process on how to ensure you are PAYING YOURSELF FIRST in your business!

Figure out your business expenses for 3 months and always keep that in your business account. Think of this as your business’s emergency fund.

At the end of every month once all expenses are paid, you will subtract the 3 months of business expenses from the total amount in the bank. This is your profit.

Put 30% of this profit into a separate account to pay your taxes with. Everything else is now PROFIT. You need to withdraw this from your account as an owners draw and then live your life with it or invest it appropriately.

By doing the above, not only are you paying yourself first and on a consistent basis, but you are also keeping your business assets low. If your business was ever sued, you would not want much in its accounts. You need to get this money OUT!

This simple strategy will help you realize just how profitable your niche practice is and it will put money into your account to live your life and to invest towards your financial independence goals.

How do you pay yourself exactly from your business? Check out this article HERE.

2 Responses

  1. Good would please talk about liability insurance. Also if I am thinking on a opening a medical weight loss and pain management what class or classes should I take. Please advise

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