How to earn sustainable revenue even when your income varies.

Your income is so volatile.

It’s one of the downsides of having your own business - if you don’t work, you don’t get paid! This hits especially hard when the economy has a downturn (you know… when we are stuck in a global pandemic for over a year). To a certain extent, we’re lucky that there is COVID-related economic funding available to help in this time since you also don’t qualify for unemployment insurance. Bummer.

Your business income profile variability is one of the most interesting and most nerve-wracking things about having a business. But how do you make sure that your personal finances can weather the business finance storm?

Here are the top tips I give clients to help them even out their income:

Know your sales profile. Really what I mean here is to look at your income, by type, each month.
What does it mean to look at your income by type? If you are a Chiropractor, you have new patients, returning patients, extended follow-ups and maybe a few more types of treatments where you charge patients different amounts. Breaking your income down into how much you earn from each type of income shows you trends so you can better predict what your future revenue will look like.
Ex. your follow-up patients might see you 2x per week at the start, but after a month or so go down to 1x per week, you need to make sure you are consistently bringing in new patients (so new patient sales the same or increasing) so that when those follow up treatments fall off you know you have more coming!
It is also important to break down your sales into different clinics, mobile, or your own practice to get even more visibility into your profile. The more you know about how you make money, the better you can predict how the money will come to you.’
Anticipate your expenses. Aka Budget. Once you know what you will be spending, plan it better!
Your sales are super high in December; that’s the nature of Health & Wellness with the “use it or lose” mindset that a lot of people have around their insurance benefits. This means that you will be floating in sales cash in January, and it’s a good time to buy more expensive items! Hello, coaching program!
Investing in your business is ALWAYS a good idea, but some programs and courses are expensive. If you plan for these higher costs a few months in advance, you can know it’s coming and use a higher sales month (or months, depending on the program) to pay for it. You will be paying for your big expense from the cash you already have instead of debt! Goodbye credit card balance!
Get a business bank account - and start treating your business like a real business that pays you!
This tip is half mindset and half finances. Always remember that your business is a real business! It should be paying you. You are not an employee of a company, you are an employee of yourself, but the same rules apply. Having a business bank account allows all the volatility from your sales and expenses to be in one place without you really feeling it.
Extra cash leftover at the end of the month? Great! Keep it in your account for a lower sales month (maybe February?), a month with higher expenses (that laptop purchase you have been putting off) or for your vacation time (remember what I said about if you aren’t working, you aren’t making money).
Pay yourself the same amount each month.
With your new mindset of paying yourself as an employee of your business, decide on a salary. Pay yourself this amount in a high sales month, low sales month, high expense month or a vacation month, knowing that the three amazing habits you built above make it all possible!

RESOURCES:

Click here for a free monthly bookkeeping template specifically designed for Health & Wellness Practitioners to better understand their cash flow.

Want a more detailed look at how to even out your income when your revenue is all over the place? Check out our video training on YouTube.