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Entrepreneurs: Here’s the Best Method to Help You Get Your Money Right

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A few years ago, I was called in to help a young tech startup with some important business strategy. They were looking for help with their marketing, and when I found out they had received $350,000 in seed money, I was excited.

They had developed an app; something to do with the restaurant industry, and they needed help marketing it. It was just two guys, a developer and a business grad. They were friends from college, and ready to make their mark on the Toronto tech industry in a big way.

When I got to their surprisingly lavish office, I assumed they had already made a ton of sales. I asked where they were putting their seed money. Apparently, they figured having a “tech mogul” office and renting a company Lexus were the way to go. I asked about their marketing budget, and they were reluctant to get it as high as $10,000.

The rest, they said, was for “branding” …a term too often used to mean “giving ourselves a lavish lifestyle.” I was shown the door when I suggested they should be running the company out of their dorm room and spending at least $140,000 on marketing.

The company no longer exists. Their project died, because nobody knew who they were. It seems driving a Lexus doesn’t mean anything if restaurant owners never see you pull up to the door for drop-in meetings with people they’ve never heard of.

So, if you’re an emerging, small, or sole operator business, how do you decide what to do with your money? Even better, how do you decide what your sales targets should even be?

My recommendation: the 4-3-2-1 method. Here’s what it is:

4: 40% To Your Business

If you’re serious about growing your business, the bulk of your startup and early sales capital should be going back into your business. I actually recommend 40%, at least until you reach a level of success and comfort (comfort is important!) where you can scale back. That 40% can be on supplies, staff, shipping, or whatever. But early on, I strongly recommend you focus on marketing. Marketing is all about making sure your best customer knows you’re there. If they don’t, nothing else will matter.

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” —James W. Frick

3: 30% To Taxes

It seems odd to think about pre-paying your taxes. But if you assume a fairly conservative 30% tax rate on your earnings, a couple of nice things happen.

First, you won’t be stuck with any unpleasant surprises should your bookkeeping not be up to par. Getting stuck with a five-figure tax bill when times are lean is not something you want to come out of the blue.

Second, assuming you’ve spent 40% of your earnings on actual business expenses, there’s a very good chance (though not a guarantee) that, in the worst case, you won’t have to pay any additional taxes. In the best case, you might actually get that money back as a hefty refund next year…which you can then roll back into your business (using the same formula).

2: 20% To Investments

If you’re not investing, you’re not earning tomorrow. The thing is, over the long term, your business needs to own more than just the stuff in the office. Treat your business as your life, and you’ll get the bigger picture. By placing 20% of your earnings into diversified investments, you increase your business income. It’s also great protection: if times get tough, you’ll have capital you can sell to get you through.

1: 10% To Yourself

I’m talking about top salaries in general here, but for the home-based or solopreneur, this is what will guide you to your sales target. If you’ve decided that you only want to sell $1,000 a month in services, but you allocate $100 to your own earnings, you’re not going to get ahead very quickly.

For myself at my stage of life, I would be comfortable with, let’s say, $5,000 a month in personal income. That means my sales targets for this coming year should be on the order of $50,000 a month. That’s doable in the fields I work in, and as long as I’m spending (in this example) $20,000 (40%) a month on marketing, quite achievable.

If you’re looking to take home $10,000 a month, your sales targets should be on the order of $100,000, according to this method.

Now, remember that $100,000 a month is a pretty lofty goal for some people. But targeting that 10% for personal earnings is a good way to see how much you need to get by. If you’re able to meet your obligations on $1,500 a month, then aim for $15,000 a month in sales.

“Many folks think they aren’t good at earning money, when what they don’t know is how to use it.” —Frank A. Clark

By the way, $100,000 a month in sales, following this method, means you’ll be spending $480,000 a year on marketing your business, pre-paying $360,000 in taxes (imagine THAT as a refund!!), and investing $240,000 a year for growth.

And, in theory, you can repeat this with your own income:

$10,000 per month means:

$4,000 in “business” (household) expenses;

$3,000 in taxes

$2,000 in investments

$1,000 in money to play with

Only as an example, of course.

Remember, if you’re unsure of where to set your sales goals, whether in your main business or a side hustle, figure out first how much you need — or want — personally. Make that number 10%, and you’ll have your overall sales targets. Focus your earnings on business building and long-term growth, and that 10% figure will compound considerably.

Steve Baric is an ISSA Elite Trainer, Nutritionist, and Transformation Specialist, as well as a certified Master Life Coach. As the founder of the Man Under Construction Project, he helps men recover from the trauma and confusion of divorce. His annual fall fitness challenge, Your Personal Reset Button, helps busy moms and dads shed extra pounds and reset their metabolic hormones in the privacy of their own homes.

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The Entrepreneur’s Reading List That Transforms Ideas Into Empires

These must-read titles and writing insights reveal how entrepreneurs turn bold ideas into empire-level success.

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The Leadership Shift Every Company Needs in 2025

Struggling to keep your team engaged? Here’s how leaders can turn frustrated employees into loyal advocates.

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In workplaces around the world, there’s a growing gap between employers and employees and between superiors and their teams. It’s a common refrain: “People don’t leave companies, they leave bad bosses.”

While there are, of course, cases where management could do better, this isn’t just a “bad boss” problem. The relationship between leaders and employees is complex. Instead of assigning blame, we should explore practical solutions to build stronger, healthier workplaces where everyone thrives.

Why This Gap Exists

Every workplace needs someone to guide, supervise, and provide feedback. That’s essential for productivity and performance. But because there are usually far more employees than managers, dissatisfaction, fair or not, spreads quickly.

What if, instead of focusing on blame, we focused on building trust, empathy, and communication? This is where modern leadership and human-centered management can make a difference.

Tools and Techniques to Bridge the Gap

Here are proven strategies leaders and employees can use to foster stronger relationships and create a workplace where people actually want to stay.

1. Practice Mutual Empathy

Both managers and employees need to recognize they are ultimately on the same team. Leaders have to balance people and performance, and often face intense pressure to hit targets. Employees who understand this reality are more likely to cooperate and problem-solve collaboratively.

2. Maintain Professional Boundaries

Superiors should separate personal issues from professional decision-making. Consistency, fairness, and integrity build trust, and trust is the foundation of a motivated team.

3. Follow the Golden Rule

Treat people how you would like to be treated. This simple principle encourages compassion and respect, two qualities every effective leader must demonstrate.

4. Avoid Micromanagement

Micromanaging stifles creativity and damages morale. Great leaders see themselves as partners, not just bosses, and treat their teams as collaborators working toward a shared goal.

5. Empower Employees to Grow

Empowerment means giving employees responsibility that matches their capacity, and then trusting them to deliver. Encourage them to take calculated risks, learn from mistakes, and problem-solve independently. If something goes wrong, turn it into a learning opportunity, not a reprimand.

6. Communicate in All Directions

Communication shouldn’t just be top-down. Invite feedback, create open channels for suggestions, and genuinely listen to what your people have to say. Healthy upward communication closes gaps before they become conflicts.

7. Overcome Insecurities

Many leaders secretly fear being outshone by younger, more tech-savvy employees. Instead of resisting, embrace the chance to learn from them. Humility earns respect and helps the team innovate faster.

8. Invest in Coaching and Mentorship

True leaders grow other leaders. Provide mentorship, career guidance, and stretch opportunities so employees can develop new skills. Leadership is learned through experience, but guided experience is even more powerful.

9. Eliminate Favoritism

Avoid cliques and office politics. Decisions should be based on facts and fairness, not gossip. Objective, transparent decision-making builds credibility.

10. Recognize Efforts Promptly

Recognition often matters more than rewards. Publicly appreciate employees’ contributions and do so consistently and fairly. A timely “thank you” can be more motivating than a quarterly bonus.

11. Conduct Thoughtful Exit Interviews

When employees leave, treat it as an opportunity to learn. Keep interviews confidential and use the insights to improve management practices and culture.

12. Provide Leadership Development

Train managers to lead, not just supervise. Leadership development programs help shift mindsets from “command and control” to “coach and empower.” This transformation has a direct impact on morale and retention.

13. Adopt Soft Leadership Principles

Today’s workforce, largely millennials and Gen Z, value collaboration over hierarchy. Soft leadership focuses on partnership, mutual respect, and shared purpose, rather than rigid top-down control.

The Bigger Picture: HR’s Role

Mercer’s global research highlights five key priorities for organizations:

  • Build diverse talent pipelines

  • Embrace flexible work models

  • Design compelling career paths

  • Simplify HR processes

  • Redefine the value HR brings

The challenge? Employers and employees often view these priorities differently. Bridging that perception gap is just as important as bridging the relational gap between leaders and staff.

Treat Employees Like Associates, Not Just Staff

When you treat employees like partners, they bring their best selves to work. HR leaders must develop strategies to keep talent engaged, empowered, and prepared for the future.

Organizational success starts with people, always. Build the relationship with your team first, and the results will follow.

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