Nearly every week I hear the same excuses.
“The ATO is killing us.”
“Customers are taking too long to pay.”
“Payroll has become impossible.”
Sometimes that’s true, but mostly none of those are the real problem.
The biggest threat to your cashflow is the person looking back at you in the mirror.
I’ve lost count of the number of businesses that tell me they’re struggling to pay their bills, yet their bank account has been quietly funding holidays, cosmetic procedures, designer handbags, online shopping, takeaway every second night, sports betting, and whatever else catches their eye.
Success arrives… then the spending begins. Your business becomes your personal ATM. The scary part is this isn’t usually fraud or greed. It’s something much simpler. You stop keeping score.
Then we prepare the financials and review the director’s loan account.
$180,000.
“I didn’t spend that!”
Yes. You did. One swipe at a time.
Then comes my least favourite question.
“Can we claim some of it as a tax deduction?”
No. Checking work emails doesn’t make your holiday tax deductible.
Here’s the hard truth: You can build a profitable business and still bankrupt it by taking too much cash out.
Financially unshakeable business owners understand this important rule. Just because the money is in the bank doesn’t mean it’s yours to spend.
Some belongs to the ATO. Some belongs to your team. Some belongs to suppliers. Some needs to stay in the business.
This week’s challenge: Print your business bank statements for the last three months and highlight every personal expense. Don’t cheat. Include any cash sales you took too. Total it, multiply it by four, then add your normal wage.
That’s roughly what you’ve withdrawn from your business in a year, often without considering the tax or cashflow consequences.
If the total shocks you, don’t make excuses. Make changes.
Start leading your business like it’s an investment, not a personal shopping account.