One of the most common questions I’m asked is:

How much should I be spending on ____?

Look y’all, I know I’m supposed to be the expert here and all, but unless I’m all up in your business finances, I’m going to let you in on a little secret.

I have no idea

gasp

Maybe that’s a shocker for you. But let’s just be real here – how dumb would I sound if I told you to only spend $1k a month on ads but you’re actually bringing in like $25k a month.

The answer depends on what your business is doing and where you’re trying to go.

With that said, I do have a method I use with all my clients that will help you in your business and your personal life.

Using percentages!

I know, accounting isn’t full of novel ideas

It is that simple and it is that obvious.

For a vast majority of online coaching & consulting businesses, using percentages in your budgets and projections are going to do 3 things.

1. Using percentages will help you grow sustainably.

Whether you make $10k or $100k, 10% is still 10%. So using percentages is going to help you spend in a way that fits where your business is in its current stage, no matter what stage that is.

I see way too many business owners spending money on their “next level” but in reality, that kind of spending is literally going to kill your business and cause you to either grow in a way you can’t manage or just make you crash & burn altogether. Nobody wants that, you have work to do.

2. Using percentages will help you make changes more quickly.

If you crunch the #s and realize you’re spending 50% on overhead costs, you can use that info to make better decisions on which expenses to cut OR figure out exactly how much you need to grow your revenue to bring your overhead costs back down to 15%.

If you’re only looking at the $$ amount, $5k in overhead might seem okay, but it’s that’s more than 15-20% of revenue, you’re actually bleeding your company dry and you may not even know it.

3. Using percentages will tell you exactly when to scale to the next level.

If you’re consistently operating at a 30% net profit margin, that’s how you know it’s time to dip into your cash supplies and bump up your scale with investing in staff, more ads, or coaching (or something else you need).

What I see way too often is people who don’t know their profit margins, so they’re trying to scale when in reality they have nothing to scale yet. This leads them to operate at a loss very quickly and then they’re left wondering why it seems like they’re running on a sales hamster wheel.

So if you’ve ever wondered how much to spend on something in your biz, look at your ratios before you invest.

Need help knowing which percentages to assign to each category? I can show you on a Money Map session.

Book one today!