The Design Business Show 225: The Reality of Combining Personal and Business Finances for Profit with Tara Newman

Tara Newman is the Founder and CEO of The Bold Profit Academy, where she teaches service-based business owners how to sell premium services and programs without the emotional stress of launching, worrying about ads, overwhelming social strategies or complex funnels. Tara hosts a weekly podcast called The Bold Money Revolution and has been featured in publications like Money Magazine, Yahoo Finance, and Huffington Post as well as other publications and podcasts. She earned her Master’s in Organizational Psychology from Hofstra University, has over 20 years of experience, is a certified Profit First Professional and holds an advanced level Reiki Certification. Everything she teaches incorporates Energy, Mindset and Strategy as a framework for resiliency and results.   Here’s what we covered on the episode: Businesses Transparancy  We touch on how weird the world of digital selling is right now and about having open conversations around it Tara says she was a high school failure because of undiagnosed ADHD but thrived in college because she found something she was passionate about, which was psychology - she went into industrial organizational psychology, which is the study of human behavior at work In 2005, Tara and her husband started their first business but went bankrupt in 2010, shortly after the recession Tara started her third business in 2014, which is something she felt she could never do because she was coming into her business at such a disadvantage financially and physically but had to figure out how to make 6-figures independent of an employer   When she started her business in 2014, Tara was 38 years old and shared that she had never been responsible for her own finances, which was another disadvantage How we often forget that many people are necessity entrepreneurs, and most people leave their jobs out of necessity because of illness, stress, wanting flexibility, and wanting to replace their income Tara first had to figure out how to pay herself $100,000 because she was making more than that in her corporate career and shared that it took her years to get to that point – she had to learn how to sell, communicate the value of her work, position herself, understand her target audience, etc. After the first year, Tara realized she had a viable business but says she had the embarrassing realization that $100,000 in revenue is not the same as $100,000 in her paycheck It wasn’t until year 3 in Tara’s business that she was able to pay herself significantly, and she is transparent in saying that her pay has gone up and down over the years Just because someone says they have made $100,000 in a month or a year doesn’t mean that’s what they’re profiting or paying themselves The framework Tara uses is the Profit First Framework – they provide a free revenue goal calculator that reverse engineers your revenue goal to make sure you can pay yourself what you need to meet your personal financial goals and expenses Tara explains it is possible to pay yourself $100,000 on $200,000 - $250,000 a year in revenue, but it depends on your business expenses   91% of Tara’s Instagram community believes that social media over-glamourizes what’s happening in small businesses and shares that in 2018, 88% of women small business owners earned less than $100,000 in revenue a year – only 1% are making over 1 million dollars We bust the myth that one-on-one work drains you and isn’t as profitable because, personally, I’ve discovered that’s how I work best Profit First Framework Profit First is a book by Mike Michalowicz, and it’s a cash flow management system; it’s not accounting – Profit First helps you make intentional money decisions, gives you clarity and a language to talk about money   Normally, profit = sales – expenses, but Mike said no, that’s not the right formula and said we need to use sales – profit = expenses In Profit First, you pay yourself first, then set money aside for taxes, and then what’s left over in your business is what you use to pay your expenses The first thing you want to do with your profit is pay off any debt you may have, then put 50% of your profit away as a cushion in your business until you feel comfortable and then once you’ve done that, you can take your profit as a reward for all your hard work, and then the next step is putting aside money for taxes and paying your everyday lifestyle expenses   Tara explains how to use their free revenue calculator and shares that when you work with a Profit First professional, it could take 18 months to get you from where you are to where you want to be – you have to be patient and know it doesn’t happen overnight When it comes to working with clients, Tara works with those who are just starting, making zero, and says there is never a better time to create a cash-flow management system, but she also works with large businesses that are bringing in 60 million dollars in revenue How Tara has been able to create her offers to meet the right size business at the right point – her one-on-one work is typically for larger businesses, and she says she’s mindful of what she’s charging at what point in their business because she wants them to keep more of their money The Bold Profit Academy is a learning container because Tara has found that there are just a few knowledge and skill gaps in getting people to the revenue they desire Use the free revenue goal calculator, check out Tara’s free podcast, The Bold Money Revolution, and feel free to reach out to her    Links mentioned: Free Revenue Goal Calculator  The Bold Money Revolution The Bold Profit Academy   Like what you heard?  Click here to subscribe + leave a review on iTunes. Click here to download my Sales Page Trello Board Let’s connect on Instagram!