When asked what “Margin” is, I once had a client say she thought it was a setting on microsoft word ☺️(which it is!) … but it’s also a really important financial term every creative entrepreneur needs to know!
For the past thirteen years I’ve been working in the world of finance and small business ownership. Finance is one of those uber confusing topics because there is SO much gray area, SO many differing opinions and SO many men in suits that just don’t “get us” creatives! It’s not approachable and yet it’s actually really important, so we’re left wondering if this is the year the IRS is going to come after our businesses because we failed to file one of a bajillion pieces of paperwork which we didn’t even know we had to file and now we are just out of luck.
Coming from the world of three inch high heels and black power suits, I’ve made it my mission to make finance approachable (even fun!) and de-mystify this ever-so-intimidating topic! You see, over these thirteen years of business + my four year degree, I’ve learned what every small business needs to know when it comes to their finances AND what they can let go of and let the professionals handle!
There are a lot of financial terms and lingo but the MOST IMPORTANT one, the one every entrepreneur needs to know, is MARGIN.
I describe Margin as, the leftover. And in business, finances, and time—MARGIN is everything!
Pricing is the #1 question I get as a business consultant and I always respond, “price is just a guessing game until you know your cost!”
The Formula to remember : Cost + Markup (aka Margin) = Price
Related : Three Strategies to Price for Profit
According to CNN Money, over half of Americans are spending their entire income or more (aka going into more debt) every single year! A CNBC reports 85% of Americans are ‘sometimes’ stressed about money, while 30% report ‘constant’ stress. Many years ago I realized to most creative entrepreneurs (and let’s face it, most of the female gender), BUDGET is six-letter curse word! It feels like a big fat NO! Something else to feel guilty about when it comes to money. So I flipped the script and started calling a budget, a “spending plan”. Instead of saying what we can NOT spend, let’s make it about what we CAN spend! When it comes to spending, don’t forget the MARGIN.
The formula to remember : Spending + Savings (aka Margin) = Income
Last but not least, we must have margin (aka whitespace) in our time. Inside The Blueprint Model I walk students through my Time Bank exercise. It’s really eye-opening to see all the things we are trying to squeeze into too few hours. No wonder we always feel overworked, busy and just down right scattered! How can we build in some whitespace, some left over time, to recharge our batteries?
Margin is EVERYTHING!
Have you struggled to find margin?