You know what it takes to run your business.
But what about those big businesses that make several tens of thousands of dollars a month, like more than $30k. What does it look like with their costs and expenses?
Let’s talk about what expenses look like for some of these businesses.
There are going to be businesses that have similar expenses to this. There are going to be businesses who completely bootstrap their businesses and their expenses look nothing like this. And there are even going to be businesses who spend even more money in the month than they make.
This is just a general example to give you an idea.
Total Monthly Revenue: $31,090 - selling multiple products, plus coaching packages with 1:1 clients
Merchant Fees: $901.61 - the fees to process Stripe and/or PayPal fees
Virtual Assistants/Team members: $5,600 - 4 people total working on the team supporting the business
Kartra: $199 - email list, course hosting, landing page hosting, payment processing
Legal & Accounting Fees: $3,500 - paid lawyer for a few small things for last month and virtual CFO
Tax Savings: $4,000 - put money into a separate account so that it’s available for tax payments when needed
Owner’s Pay: $8,000 - this is the money that is taken home by the business owner
Other Expenses: $1,200 - stock photos, random purchases throughout the month as things are needed
Total Expenses: $23,400.61
Net Profit: $7,689.39 - the money left over for the month to move forward into next month
Very rarely are any 2 businesses going to have the same expenses in the same month. They can have the same revenue in a month, but very rarely will the expenses be all that similar.
Every business operates on their own budget and spends how they see fit for the business.
While this business put away $4,000 for the month for taxes, only $11,689.39 would be taxed (net profit plus the tax savings added back in).
You are always taxed on the net profit in your business, NOT the net revenue.
But the goal is also to always have a profit for the business. Having a loss is okay, but the goal is to have a profit and spend less money than you bring in, save for taxes and let the business checking account just keep growing.
Are you producing a monthly profit in your business?
What questions does this bring up for you about a business’s finances?
