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Use the 5% Saving Rule to Finish Projects Faster
Editor’s note: This is a guest post by Jeremie Miller.
“Our stress is that actually finishing the work we’re meant to do is even more important than it’s ever been; our salvation is that we’re happiest when we’re actually finishing the work we’re meant to do.” – Charlie Gilkey, “Welcome to Project World”
If you live in Project World and finishing the projects you are meant to do creates less stress and more happiness, then finding ways to finish that work even faster sounds like a pretty great idea. The good news is, you can boost your project finishing powers in a wide variety of ways, including:
Linking your projects to the “why” of your business
Fitting the projects into the annual plans for both your business and your life
Organizing each project into monthly, weekly, and daily goals, milestones, and tasks
Breaking down each project into smaller chunks
Working in creative blocks or using various creativity tips and tricks to complete the tasks for each project
However, there is one method of finishing projects faster that is often overlooked: setting aside money for them.
Most productivity tips and methods focus on planning, executing, and managing your time. What these techniques leave out is planning for the transition time between your projects: the time it takes you to go from finishing one project to starting a new one. The way you manage your money can either reduce this time to zero or slow the transition (and your next project) to a crawl.
Two types of project costs have an immediate impact on your money: expenses and time.
Expenses use up your funds to cover the costs associated with making the current project a reality. For example, you might have editing and design costs for an ebook project.
Time spent on the project uses up hours that could be spent making money in other ways. When you’re writing your ebook (or doing the graphic design yourself), you’re not providing services that produce income.
As I mentioned in How Failing to Budget Can Kill Your Productivity, most productivity systems leave out the essential step of ensuring that you have the money needed to implement your plans. And when you don’t know whether you can afford to fund your projects, doubt starts to creep in, you begin second-guessing your decisions, and you delay the start of your next project.
Budgeting for your projects is one of the best ways to speed them up. If you know how you will cover your project costs, or at least some of them, you will spend less time worrying, will have more confidence in your decisions, and can start the next project sooner and be that much closer to finishing. This is also one of the reasons why there's a lesson on budgeting in Start Finishing Your Projects.
Luckily, there is a simple step you can take that will allow you to cover your project costs and to transition between, and finish, projects more quickly. That step is to set money aside specifically for future projects.
If this step is so simple, why do we neglect it? To understand that, let’s look at how project funding works in many small businesses.
Project Funding As Usual
Successfully completing your projects means that you need to plan them from beginning to middle to end. Luckily, Productive Flourishing provides some of the best tools to help you with organizing successful projects and slotting them into your annual plan. (You can get started with free tools here.)
Once you have your projects sequenced and planned, you switch your focus to the project right in front of you and begin working that project to completion. Here’s what that process typically looks like:
You start working on Project A. You have Projects B, C, and D set to go, but they don’t happen for months, so you set them aside to free up mental space and increase focus. You start diverting cash flow to cover the costs of Project A, while still covering regular operating expenses.
Then you complete Project A, and it is time to start on Project B. This is where everything starts to slow down as you begin looking at:
how much money you have in your business accounts
how the financial costs of Project B will affect cash flow
how the creative time needed for Project B will limit cash flow
You start to wonder if you can afford to even start Project B, never mind take the time to finish it.
The challenge: You have planned your projects, but you haven’t planned your finances to support them.
The solution: Work on present projects while saving for future projects.
Why does this solution work? First, let’s look at the usual small-business budget.
The Usual Small-Business Budget
The usual small-business budget is great at focusing on everything but supporting future projects. These budgets include things like:
monthly operating expenses (cell phone, Internet, subscriptions, etc.)
owner’s pay (hopefully)
payroll for employees or contractors (if you have any)
yearly expenses (domain names, website costs, insurance, professional fees, etc.)
supplies and inventory
office rental and storage rental
All of these categories are important (they’ll vary by type and complexity of business), and they are required for successfully running your business, but they are not helping you with what is most important to reducing your stress and experiencing happiness:
These categories are not helping you finish.
What you need is a new business budget category that focuses on only one thing: finishing projects faster.
Saving for Future Projects
Saving for future projects doesn’t have to be difficult.
This is all it takes to start reducing your project transition time, reducing your stress, and increasing your happiness.
Every time you receive money in your business, take 5% of that income and put it into a separate bank account, or track it on a spreadsheet.
If you can save more, great. If 5% doesn’t seem possible, save whatever percentage you can. The key is to make sure you are always turning some of your “now money” into “future money” that will be waiting to support you financially when you finish one project and are ready to start another.
Each and every time you add money to that future-project savings account, you make it easier to stop worrying about the two big costs of starting a new project: the money needed to cover direct expenses and the time you will spend working on the project.
Your project transition time changes. Now, when you complete Project A and are ready to start on Project B, you transition between projects smoothly by looking at:
how much money you have in your business accounts, including the money in your future-project savings account that is waiting to support you
how the financial costs of Project B will affect the combination of your future-project savings account and your current cash flow
how the creative time needed for Project B can be supported by the money in your future-project savings account
You start Project B with the confidence that your money is supporting you, and you move closer to the final goal of finishing.
Even if you are unable to save all of the money you need to support your next project, having some “future money” will help you push back doubts and begin Project B feeling more secure than you would if you had to depend solely on your “now money.”
Business Example: Pivoting into a New Business
About two years ago, I started thinking about changing the focus of my business and starting The Secure Entrepreneur. This was going to be a huge project, and I knew that if I didn’t have the money to support it, I would never get started.
I decided to go big with saving for the Secure Entrepreneur project, so I cut back on my monthly and yearly expenses and began saving 10-20% of all my business income to put toward that project. Approximately one year ago, I had saved $9807.91 when I decided to pivot and start The Secure Entrepreneur. Having this money waiting in a bank account to help cover all the new business expenses made transitioning into the new project an easier and faster decision.
In the past year, I have had a lengthy list of future projects for the Secure Entrepreneur, and I reduced the amount I set aside for future projects to 5%-10% of my income, but still managed to save $5736.26. This money not only enabled me to complete several projects for The Secure Entrepreneur – building a new website, writing and publishing an ebook, creating and selling online courses, paying for coaching and consulting, and upgrading technology – but also made each project easier to start and finish.
Personal Example: Even Small Amounts Add Up
Saving for future projects works in both your business and your personal life. Ashlea, my wife, is planning on taking her Masters in Education in the next couple of years. Ashlea’s project will have a hefty price tag (probably $30K plus), and this huge expense could hold Ashlea back from starting this project. That is a lot of debt for our family.
However, we started planning a budget for Ashlea’s Masters about three years ago, diverting 5% of my business income, every time I got paid, into a Masters savings account. These 5% deposits range from only $1.75 up to around $175. Those amounts are a mere pittance when compared to the full expected cost of $30,000.
You might think it wouldn’t be worth the effort to transfer amounts as low as $1.75 to a savings account – but you’d be wrong. We currently have over $17,000 saved for Ashlea’s Masters Program.
This is why saving for future projects works: each small deposit adds up, becoming a small win and, over time, making a big difference.
Once Ashlea feels ready to enroll, we won’t need to pause and ask, “How are we going to pay for this?” or “Can you take time off to study?” We will have the answer, and Ashlea will be able to start finishing her education right away.
Start Saving for Future Projects Now
Wherever you are in your business, now is a perfect time to start your Future-Project Savings Account:
Client payment * 0.05 = Amount deposited in your Future-Project Savings Account
That’s it — nothing complicated or tricky.
Save 5% of the money you are making now towards funding your future projects.
Cut down on financial doubts when you are transitioning between projects.
Speed up your ability to finish projects.
Reach the final goal: reduce stress and increase your happiness in Project World.