This week's bookkeeping tip: Want to earn more money? Run your income statement (aka your profit & loss report) in your bookkeeping program and review your income for the last six months. Ask yourself, which client have been going above and beyond in my service? Reflect on your contract structure and propose an pay increase. To learn more about how to use your financial reports to make business decisions, check out my Bookkeeping 101 course.
Are you getting paid your worth? In case you missed the news, actress Jennifer Lawrence has been getting a lot of press lately because she recently learned that she was paid less than her male peers.
Over the past few months, I've had some juicy conversations with girlfriends about the art of negotiations. Unfortunately, the gender pay gap is a real issue and women usually get the short end of the stick.
There are a lot of theories about how you should negotiate. One of my attorney friends says that you should never feign interest. Once you show enthusiasm, you lose your bargaining chip.
Another of my successful entrepreneur friends says to not share any of your ideas on how you can help. Or very few ideas. Otherwise, they can steal them and leave you hanging.
And several of my corporate friends suggest that you never accept the first offer that a company gives you. Always ask for 30% more.
As an entrepreneur, one of the main parts of my job is to negotiate. While it gets easier, I do not think I will ever feel 100% comfortable with the process. When it comes to my strategy, I've tried all of the tactics listed above. I've also gone against the grain in some situations, and dismissed the above tactics. I've shown lots of enthusiasm, shared a plethora of ideas and taken a deal "as-is".
The tactics you decide to use, is not the purpose of this post. The issue that I wish to address, which is the issue at play in Jennifer's situation, is that many of us have a tendency to shy away from the financial discussion. We all do it, myself included!
In Jennifer's case, she did not find out about the pay gap until much later because her "people" were handling the negotiations. She had outsourced her finance dealings to someone else and assumed that they would get the best deal for her. She was wrong!
When it comes to your money, YOU are the only one that cares about YOUR bank account.
Too often I hear of entrepreneurs outsourcing their financial dealings because they "don't want to be bothered" or feel that they aren't "smart enough". If you want to make sure your money is safe and sound, you need to be involved with it. Even if you are working with a financial professional.
I encourage every business owner to hire a financial professional as soon as it makes sense for you. But once you do, you still need to know what is going on. And that means you need to educate yourself, know how your money flows AND work closely with your financial professional once you hire someone.
So, what is the one piece of advice that Jennifer would like for us all to learn?
Take a proactive approach in managing your money and negotiating your pay.
If your business is earning under six-figures, you need to be managing the books and not outsourcing it out to a financial professional.
If you are working with a financial professional, make sure you have monthly meetings to discuss your earnings and ways you can elevate your revenue.
For more tips on how to make sure you are charging your worth, check out my small business guide on Xero.
Now I would like to hear from you! How do you stay on top of your books? Have you had to negotiate a higher pay from a client? Leave a comment and let us know. Your insights could help someone improve their financial situation.
Cheers to you and your financial success,
Need help getting your books in order so you can make wise financial decisions? Stop procastinating and get your money organized before the end of the year. Check out my on-demand Bookkeeping 101 course.
Danetha Doe (@danethadoe) is a business strategist and helps entrepreneurs understand accounting so they can honor their worth and live a life of purpose. Selected as one of the Top 40 under 40 accounting professionals by CPA Practice Advisor, she is the author of the Simple Guide to Accounting and Financial Strategy for New Entrepreneurs. Click here to find out more about working with her.