The 30-50-20 Rule for your finances [episode 28]

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In today’s episode, we tackle a common question among business owners: are your financial numbers good, and how can you adjust them for better profitability? Learn how to assess if your financial numbers are on the right track and learn how to optimize them for greater profitability using the 30-50-20 rule.

We’ll break down this essential guideline, especially beneficial for soloist businesses, into manageable percentages of revenue: 30% for operating expenses, 50% for owner pay, and 20% for taxes. We also explore the critical adjustments needed for product-based or agency models and the significant impact of not meeting these benchmarks, such as increased operating expenses and pricing issues.

This episode is packed with insights designed to help you re-evaluate and potentially transform your financial planning to achieve your business goals.

In this episode, The 30-50-20 Rule for your finances, we cover:

  • The 30-50-20 rule, a simple yet effective way to manage your finances by dividing your revenue into three key buckets: 30% for operating expenses, 50% for owner pay, and 20% for taxes.
  • The implications of not meeting these benchmarks, such as higher operating expenses due to low revenue or insufficient pricing.
  • How to adjust these percentages for product-based or agency models.

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More about the Profitable Women podcast:

If you find yourself avoiding conversations about money, are burnt out from working all the time and wondering where your cash goes, and are tired of not paying yourself consistently, you are in the right place. 

Profitable Women is for those who don’t want to choose between their career and motherhood. It is to educate you on the financial side of running a profitable and sustainable business. It is a safe place where you are seen and heard in your fears as a business owner. It is where we talk about the money stories that are showing up in your everyday business decisions. It is where we allow ourselves to get curious about the numbers and welcome financial abundance in our lives.  We will talk mindset, financial strategy, and numbers all with the goal of aligning our business to our life. If you believe in what you do and want to make it sustainable while building wealth, Profitable Women is the podcast for you! 

Your host, Sheila Hansen, is a CPA, coach, and business mentor who supports female business owners to make confident financial decisions. In addition to solo episodes, we will hear from other expert female guests who are out there supporting women with the work they do.

As profitable women, we are in this together!

Find more resources at hansenllc.net and be sure to follow Sheila on IG @Sheila.Hansen.CPA

[Disclaimer: Any opinions, recommendations, and tips offered on this podcast or other social media forms do not constitute individual tax or accounting advice. This content is designed to provide education and awareness of financial topics and responsibility for the benefit of the general public. Please consult a professional before implementing any of the suggestions made by Sheila or Sheila Hansen, LLC]

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