Mary Beth Storjohann: Pay Yo’ Self Series
Mary Beth Storjohann, CFP® is the Founder of Workable Wealth and works as an author, speaker, and financial coach. With over 12 years of experience in the financial services industry she applies a fun, albeit no-nonsense approach in working with individuals and couples in their 20s – 40s across the country, helping them make smart, educated choices with their money. Mary Beth makes frequent appearances on NBC as a financial expert and is a contributor to major media outlets such as U.S. News & World Report, The Wall Street Journal and Forbes. Her first book, Work Your Wealth: 9 Steps to Making Smarter Choices With Your Money (March 2016) cuts through the fancy lingo, breaks down complicated topics and provides clear-cut guidance on the money moves you can make to improve your financial situation right now. To connect with Mary Beth, head over to www.workablewealth.com or find her on Twitter @marybstorj, Instagram and Facebook
What are your income streams that make up your business revenue?
My business income streams consist of: financial planning and coaching, writing and speaking fees. In addition, I have passive income from my online Newlywed Money Bootcamp and my soon to be released book, Work Your Wealth: 9 Steps to Making Smarter Choices With Your Money.
Do you plan your revenue goals for the year at the beginning of the year? If so how do you come up with that number?
I set my revenue goal at the beginning of each year and arrive at the number by setting goals for each revenue stream within my business. I always try to set realistic goals (that I still need to hustle for), and then if I reach them, I push them out a bit.
With an idea of what you will make in the next year, is your next step to budget? What does your budget usually include/look like?
I set a revenue goal for the year, but then try to look at a conservative projection of what I can expect to make. I ask myself what if “x” number of clients fell off? What if I don’t get as many speaking gigs? I run through a list of “what-ifs” and come to a conservative number that I’m comfortable on relying on as my income. From there I create my budget for the year which includes all overhead costs, any conferences / personal development, what I’d like to pay myself and what I need to have to pay contractors.
How do you decide how much to pay yourself?
At the beginning of each year, I look at my expenses for the business, ensure that I’m not over spending anywhere or spending money that I shouldn’t and determine a fixed amount to pay myself on a monthly basis (based on the conservative projection I mentioned above). I pay myself on the 1st of each month and at the end of each quarter, I’ll look at how my business has done, I’ll back out any taxes I owe for that quarter and will determine if I can or should take an extra draw based on what my personal and company goals are.
When did your business start paying you? How much was your personal budget getting paid?
My business started paying me the first year I launched because as a service provider, I’ve kept my overhead very low. I essentially took a skill / service that I was providing through an employer and transferred it to my own business. Since I’m virtual, I basically need a laptop, wi-fi, a phone and a nerdy financial calculator to do the work that I do.
What portion of your business is spent on education/professional development each year?
I’d say about 5% of my business revenue is geared towards professional development / education.
How much money do you put into savings (in your business) & how do you decide on that number?
For tax savings, money gets earmarked on a monthly basis based on P&L for the month. I always pay based on current year instead of past year’s taxes. In addition, as my business has grown, I’ll look at the account on a quarterly basis to determine how much profit is there and what I’d like to focus on in the months ahead. Since I’m already paying myself off of the conservative projection and making it work, I’ll decide what to stash into business savings based on goals I have (i.e. make a new hire, have my brand / website redesigned, etc). Typically these costs are factored in to my budget for the year, but if there’s a goal I’m shooting for, I’ll start stashing away for that with any “extra” I have in my budget.
Do you or have you started to work with a bookkeeper or an accountant? If yes, when did you take that leap?
YES! I do my own bookkeeping, but have had a bookkeeper that will go in after me on a quarterly basis to clean things up and ensure I don’t have any mistakes. This is our first year working with our own accountant, but due to the nature of my business, I’m constantly talking with 2 or 3 about our situation at any given time.
What fears did you have around making or spending money in the first few years in business?
I was terrified of not making any money. I also had this fear that even though I knew what I was doing and had years of experience, people would see/think that I’m a fraud. I knew I wanted to help people, but I thought they wouldn’t let me / want me to. It was an anxious time. I’m going on close to three years on my own (almost 13 in the industry) and if I learned anything, it’s that I can figure out how to earn the income. Now it’s just a matter of focusing on the areas that mean the most to me and providing value there.
How do you and your business account for the variable income nature that entrepreneur business revenue can be?
Based on my background and industry, I’m pretty conservative. So before I even launched Workable Wealth, I had a cushion for the expenses. I ran the numbers for what my family could live off of. We had an account (not our emergency account) to pull from in lean months. My biggest thing is to plan for the worst case and see if your income can work off of that. For me, I’m the type of person who feels better knowing what the minimum amount of money I need to make is so that I can make our finances work. I want to plan for that conservative projection so that I’m not stressed out by putting some imaginary goal or number on myself. If I can make it work and meet a “worst case scenario” number that will allow me to run my business and my personal finances, then I’m less stressed and more open to the opportunities and business that comes my way. If I’m zeroed in on just making money and getting by, I can’t focus on anything else and it ends up super unproductive. Also – no matter what, I pay off my business AmEx every month. I don’t carry debt on credit cards personally or professionally. If I don’t have the cash on hand or in the bank for it – it doesn’t happen.
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