Paying Yourself as a Fertility Awareness Educator
Starting your own business as a fertility awareness educator can be a fulfilling and rewarding experience. However, as with any biz, it's essential to manage your finances effectively to ensure sustainability. Without proper financial management, you’ll run into problems pretty quickly. Money can feel daunting and taboo, but it doesn’t have to. Money can be fun and doable. One strategy that’s helped me is implementing Profit First, let’s talk about what it is and how it can be helpful in your own FAM biz.
What is Profit First?
Fortunately, there's a system that can help you manage your finances better and increase your chances of success: Profit First. I recently read Profit First and fell in love with the concepts. It fit seamlessly into my systems and made me think about paying myself as a FAM educator in a totally new way.
One of the differences between running your own biz and working for someone else, is that your income will be intermittent. This can quickly lead to a “feast or famine” mentality, where you overspend when money is coming in, and you spiral when business is slow.
The Profit First system, based on the book of the same name by Mike Michalowicz, is based on the idea that if you allocate your money before you spend it, you're more likely to prioritize your profits and avoid overspending. It’s also a great way to stay in line with your budget when money is coming in, and have enough to pay the bills when business is slow.
The system works by dividing your revenue into four different accounts: profit, owner's compensation, taxes, and operating expenses. The percentages allocated to each account depend on the specific needs and goals of your business. For example, as a fertility awareness educator, your account allocation might look like this:
Profit: 1%
Owner's compensation: 50%
Taxes: 20%
Operating expenses: 29%
These percentages are just a starting point. You can adjust them based on your own needs. They’re also aspirational. In the Profit First system, you review your current allocation percentages, and slowly make adjustments each quarter to get to your target allocation percentages. Your percentages will also definitely differ from country to country based on your own tax requirements.
Once you've divided your revenue into these four accounts, the goal is to not overspend. The accounts act as their own budget. For example, if you run out of money in your operating expense account, you need to find ways to cut expenses.
The benefit of the Profit First system is that it helps you manage your finances better, even when your business is in its early stages. You're prioritizing your profits, which means you're more likely to build a sustainable and profitable business. It also works with what you’re already doing, which is looking at your bank account balances - and I love that.
Paying yourself first
As a fertility awareness educator, you may find it challenging to manage your finances, especially if you're just starting your business. You may not have a steady stream of clients yet, or you may be unsure of how much to charge for your services. Additionally, you may have other expenses to cover, such as website hosting, client management software, or training fees.
The Profit First system can help you manage your finances and plan for the future. For example, you might want to set a goal to increase your profit allocation from 1% to 5% within the next year. This gives you a clear objective to work towards and motivates you to grow your business.
Another advantage of the Profit First system is that it helps you avoid burnout. As a fertility awareness educator, you may find yourself working long hours and sacrificing your personal life for your business. However, if you're paying yourself a reasonable salary, you'll have more financial stability and be able to enjoy your personal life more. Plus, you'll be more motivated to continue working and growing your business.
Implementing the system
To implement the Profit First system, you'll need to open four separate bank accounts: one for each of the four categories (profit, owner's compensation, taxes, and operating expenses). You'll need to transfer money from your revenue account into each of these accounts based on the percentages you've allocated at the beginning of each quarter. I also have created additional accounts in my personal bank account, so that I can save a percentage of my owners compensation towards different goals.
You can also use the Profit First system to analyze your expenses and determine which areas you can cut back on. For example, you might find that you're overspending on expenses or that you're not paying yourself enough in owners compensation by the time you account for expenses and taxes. By analyzing your expenses, you can make adjustments that will create more long-term stability in your biz.
One of the most significant benefits of the Profit First system is that it helps you stay organized and plan for the future. By allocating funds to each account, you're creating a budget that you can stick to. You'll know exactly how much money you have to spend on operating expenses and how much you need to save for taxes. The last thing you want when it comes to tax time is that you are paying a huge sum you never accounted for. By using the “out of sight, out of mind” approach, each time you get paid, a percentage goes into a Tax Bucket, and you don’t even consider it your money.
If you take anything out of this post, it’s that you should set aside a percentage (usually 20-30%) of your revenue aside in a checking account solely for taxes.
Another system I’ve implemented is paying my invoices on the 10th and 25th of each month, along with paying my credit card bill. I’m a huge proponent of looking at your money, and doing this twice monthly instead of once a month (or less) has been really helpful. You can take what works, and adapt it to your own life.
As a fertility awareness educator, it's essential to prioritize your finances and plan for the future. You need to be able to pay yourself a reasonable salary, cover your expenses, and save for taxes. I know it can feel uncomfortable to have the money conversation, but it’s an essential one. When you pay yourself well, you’re able to show up for your clients, community and family.
Starting a business as a fertility awareness educator can be challenging, but it's also an opportunity to help others and pursue your passion. However, to be sustainable, you need to get comfy with money. The Profit First system is a great starting point to help you do just that by prioritizing your profits, avoiding overspending, and helping you plan for the future.
Ready to take your FAM biz to the next level?
Let’s work together to create your dream fertility awareness offering and make a living teaching FAM.