Successful Money Management Strategies

The game of entrepreneurship is 51% money management.
Most drycleaning owners don’t realize this until it’s too late.
 
As an owner, you must strategically put yourself in a position to:

1. Grow revenue – a number of factors contribute to revenue growth, but the most important is what you spend your marketing dollars on. If your marketing investment elicits a direct response that produces a greater return than the investment, that you have managed your marketing money well.
    
2. Produce a healthy profit from your revenue – ideally you will pay yourself this profit first, and the remainder will be available for operating expenses. Not the other way around. Manage your profit so that you get ahead and can pay yourself first instead of paying yourself last.
    
3. Invest money in key team leaders – if you do this correctly, you will have freedom from the business because the operations and growth of the business will be taken care of by your team.
    
4. Manage your debt – debt can be healthy when it creates a consistent return that is greater than the cost to service the debt. Ideally, much greater. Unhealthy debt pays for a lifestyle you cannot afford. 

Get rid of the unhealthy debt and manage your healthy debt to income ratio. In the case of real estate or businesses, you can use someone else’s money (typically a bank or investor) to buy an asset without paying tax on the money needed to pay for the asset. Then you can receive profit from that asset that pays for the debt service and much more, while the asset is also growing in value.
 
When you manage money successfully, you will have a healthy business that provides cash flow to you, and is also an asset that grows in value. The best owners in our industry strive for mastery in money management strategies like the four listed above. If you are struggling in one of these areas, don’t worry. All business skills are learnable. There are no secrets. You either have learned and applied the skills, or you need to learn and apply them.
 
Get your money house in order, and you will begin to thrive and not just survive.
 
Have a great week!
–Dave