Where is YOUR profit going??

So, when I get new jewelers, I have always tried to emphasize the importance of paying of your initial investment before you start buying or paying for anything else.  Unfortunately, I learned the hard way how easy it is to fall into the trap of zebra print goodness. When I first signed, I went “gotta have” crazy insisting that I “neeeeded” this or that to make my business work. Well, here are the cold hard facts: you DON’T need cutie accents on your table, or hostess gifts from Premier Incentives, or even lots of jewelry! You came into Premier to meet a financial NEED in your home. So do you see that happening? Or do you work for a few months and wonder where in the WORLD all your money went? Well, I do. On a regular basis I think, “I did so well last month! WHERE is that money?” I’ll tell ya where it is: as soon as I get money, I’m excited to buy cuter gifts for my hostesses, or that one piece of jewelry I’ve been wanting for months. I convince myself that so many of my customers have wanted to see “this” necklace, or the girls wouldn’t be able to resist booking shows if I had “that” gift. Well. No more.

Two things have helped me to come to this mini-lesson today. One is Hood & House. Last year I bought the Hood & House program, and I have worked really hard since then to keep up with entering my data. Of course I enter all of my home shows there. But I also enter all of my commission checks, mileage, and receipts/expenses. This has helped me truly see where all my money goes! I am embarrassed to say how much I spend on returns/exchanges. Simply because I don’t always enforce asking my customers for that $5+tax…

The other thing that has helped me is the business planning Brian and I are currently doing. We have been listening to a book on tape called The Millionaire Next Door. The book is about successful millionaires and how they came to be there. LoL... that sounds funny. We are not on a quest to be millionaires. BUT we do want to know how the minds of successful business people work, and what we can do to help our new business be successful. One of the things that the author reports is that financially independent (wealthy/affluent) people know where EVERY PENNY goes. They don’t just spend haphazardly! They have detailed budgets that plan where their money will go, and holds them accountable for getting it there.

So! Ladies, I present to you: my 2012-2013 fiscal year budget!

Today I sat down and set some goals, and looked at the numbers. I set a goal of 36 home shows this year, averaging $500 each. Then, I listed all of the expenses I could think of anticipating for the next year. I set a goal to only spend 30% of my home show income on business expenses. The other 70% (plus all of my commission) will go toward our current goal of paying off our last student loan. It was harder than I thought to get my expenses down to 30%. There are so many things I love to spend money on: Jewelry, Rally, mailings! But no more! According to my initial budget, I would spend 39% of my income on business expenses. So I needed to cut 9% to reach my goal. Instead of rewriting, you can see I simply crossed things out, and made notes about the adjustment. I thought of ways to become more cost effective in my communication with hostesses, in my quest for more jewelry, and in other every day responsibilities.

Now it’s your turn! Of course yours doesn’t have to be as detailed as mine, but I encourage you to look at your spending. Before you buy some stamps and think, “oh, it’s only $6 for post card stamps,” take a look at the big picture! What percent of your income is that $6? And is there a better way to relay the same message?