OMG you did it!! The months and years of working hard and working smart, of knowing when to listen to your inner voice and when to listen to a good adviser, the months of living on four hours of sleep and no vacations for what seems like forever and—–your company grossed $1 million over four consecutive quarters! You’ve reached a milestone that defines success.
OK. So now that you’ve reached the mountaintop, you have to figure out how to keep your footing and stay up there. In fact, because you are focused, ambitious and determined, you’re already thinking about climbing even higher. But sustaining and growing your success might demand as much work and determination as you invested to attain it. Here are four commonsense choices that can help you hold on to your earnings and continue the positive slope of your company’s future.
Meet with a business accountant and figure out how much money you should reserve each quarter for tax payments (usually 30% – 40%). You don’t want to wait until the annual tax time and realize that you owe big money to the IRS. Before you spread money around, pay the quarterly tax bill and set aside enough to ensure that all remaining tax bills in the calendar year can be covered.
When you hit the revenue milestone that you’ve defined as your “made it” metric, whether the amount is a net or gross figure, you owe it to yourself to celebrate. What’s important, though, is not only how you celebrate but also with whom.
First, don’t overspend. If you want to take a week-long spa vacation then go for it, because that will dissolve your stress and prepare you for the work you’ll do to build on your new-found success. Or maybe you’d like to visit a place you’ve always wanted to see, or return to? A splurge that refreshes and replenishes your energy stores is likewise always worth it.
Where you want to be careful is the amount you spend on consumer goods. You may need a new car and if you can afford it, then do so, but be careful about splurging on luxuries. Buying a Saab or Volvo probably makes more sense than buying a BMW or Benz at this point. Save real luxury purchases for when you’ve raised your net worth to a more substantial level.
Others may want to throw a party. Caution is advised when developing the guest list. The sad fact is that there will be certain individuals, including family members, who will feel more envy than happiness upon hearing news of your success. If a party is a must-do (and why not?), invite only those who supported and believed in you.
Fair-weather friends, frenemies, passive-aggressives, or critical types who claim that they’re just playing “devil’s advocate” or being “objective” are mostly about undermining and sabotaging. They are not your friends, even if they’re family members. Don’t invite them and don’t let your mother guilt you into including them. They don’t belong.
After you’ve paid down or, ideally, paid off any significant debts, business and personal, it’s time to save money. Start with your retirement fund. Research options available to you in accordance with the business you own and pay the maximum amount allowed by your age and income level. Investigate opening a Roth retirement account as a place to hold after-tax money if you anticipate having surplus cash.
Once you’ve figured out your retirement fund strategy, focus on other long-term investments. By all means, invest in the equipment, staffing, technology and office or manufacturing space that will support operations (including customer service), generate ROI and advance the business. But what if the building where you lease space comes up for sale? It might be a good move to buy the building, so that you can control your costs more effectively and also collect some rents. For that, you’ll need money and a good credit score.
You can give yourself a wish-list savings account to build up cash reserves. There are other investments that can be made as well and to learn about your options, ask people you trust to recommend an investment counselor. If you’ve got even $5000 to invest, investigate certificates of deposit, online banks such as Everbank, index stock funds, or actively managed mutual funds.
Keep doing what it was that made you successful
Now that you have a blueprint for making lots of money, continue to follow the template and don’t slack off! Don’t think that once you reach a certain level of success that things will just cruise along on their own. You must continue to do those things that created the conditions for success. You can, however, devise methods that help processes become more efficient—that comes from experience. Operational efficiencies make money. Plan your work to give priority to income-generating activities, such as sales calls and networking, to conserve your energy and bolster your stamina and creativity.
Thanks for reading,
Image: Emanuel Leutze (1816 – 1868, Germany) Washington Crossing the Delaware (River) December 25- 26, 1776 (1851)