Imagine Your Reality

Up until very recently, (this last week in fact), I used an Excel spreadsheet to track my finances. I didn’t realize it, but until recently I didn’t really know how to track my business finances, and part of me didn’t want to know, because I was pretty sure I wouldn’t like what I saw. But at a business seminar last week, I came face to face with my resistance and realized that I didn’t have a clear idea of my business finances. Sure I could tell you at the end of each month what my expenses were and what I had brought in, but I had a very fuzzy understanding of the relationship between the two.

So last week, I buckled down and started learning quickbooks. I’m still learning it, but already I’m developing a better sense of the income flow.  And I am still using my excel spreadsheet, but I’ll be using it as a way to correlate the end numbers for a given month. And what I learned from all of this is that having a good system of financial tracking is one of the most crucial tools a business owner needs to have in place. If you can’t track your money, afterall, how will you really know what activities are helping you bring in business?

A big reason many business owners don’t track their money is because they don’t want to see what isn’t working. They don’t want to know if they are in the red, because it might make them face some unpleasant truths, but it’s better to know what your financial reality is, because then you can make changes, start getting more focused, and determine what is working, and what needs to go.

Of course just tracking your finances isn’t enough. You need a marketing plan, and you need to be consistent in your actions, but the world’s greatest marketing plan is, in the end, only as a good as your ability to track your money accurately.

I was in a conversation the other day with Miles Austin and he said the following quote: “Inform for free, how to for a fee.” Chris Brogan recently wrote a post on price points, and essentially pointed out that if you wanted his time you had to pay him what it was worth. Good point. The more you give away your services, the more you undervalue them, and the more people will take advantage of you. That’s what I’ve learned from the past year. And when people balk at paying my prices, it means they aren’t my clients, and if I try and take them on, I’ll be wasting my time chasing them.

I no longer offer free half hour consultations and I’ve determined what my price points are and I’m sticking to them. And as you may have noticed I no longer offer free webinars, and what I’ve found is that price doesn’t substantially change the participation in the webinars.

If you want free, read my blog or subscribe to my newsletter. I’m happy to inform you. But I recognize that how to always needs to have a price. If it doesn’t, it ultimately isn’t valued or followed through on. This is true regardless of what service you offer. There will, of course, be some people that will do their best to get something for nothing or for a reduced price. And I think the best choice in those cases is to walk away. They can tell you they can’t afford you because of the economy, but even if the economy was better they still would come up with some reason.

Know your value and stick to it. That’s really what I’ve been learning, as well as how to say No to bad business deals. When you do that, a lot of stress falls away because you aren’t trying to chase after clients. Instead you let them come to you, when the time is right and they recognize they are ready for the how to.

On the get rich slowly blog, there was an excellent post about the benefit of side businesses, and why you should start one, even if you don’t think you need it. I’ve pretty much always believed in developing alternate streams of income to my main income source since I was in grad school and started getting published. While the income from my reading has never been enough to live off of, it has provided a small stream of income, which has been helpful on different occasions.

As I’ve moved into self-employment, I’ve continued to explore multiple methods of generating income. This has included offering freelance editing and writing, becoming a vendor of Sendout Cards, writing professionally, workshops and professional speaking, and of course coaching. I’m even exploring some blog monetization options. All of these ventures are linked to each other, in terms of what I can offer someone, but they also provide income from different sources, ranging from college students to business owners, and anything in-between.

Having multiple streams of income has always seemed like a sensible idea to me. It means I haven’t put all my eggs into one basket, and it also means I have some versatility to my means of bringing in income, ranging from services I offer to residual income.

In an economy like this, but even in a better one, it’s always useful to have multiple income streams. The potential security those income streams can provide can be very helpful, and even if you don’t need the income at the time, it can also be nice to have a surplus income that you can use for luxuries or to save for that rainy day which might occur.

The other benefit of having multiple streams of income is that it keeps you consistently occupied with ventures that you ideally enjoy being involved in. While its true that many people enjoy their jobs, it’s also true many people don’t enjoy their jobs. Developing and sustaining alternate income streams can eventually help a person move out of a corporate setting and into a self-employed setting that s/he enjoys. And for those people who do enjoy their jobs, having alternate streams of income can still be useful for providing extra financial padding to your lifestyle.

An alternate stream of income can be easy to develop without involving a full time commitment. It can be as simple as taking a hobby you already do, and monetizing that hobby. For example, if you’re a crafts and arts person, take what you make and start vending at a local market. Or you can get involved in an affiliate program with a product you believe in and want to endorse (I did this with Sendout cards, because I liked the idea of sending cards as a way of reaching out to family, friends, and business clients). No matter what you do, its always possible to turn it into into an income stream. Do some research to determine who your market is and start reaching out and creating relationships with that market to introduce your service or product to them.

What are your thoughts about multiple streams of income? Please comment and share.