3 Ways To Improve Profitability of Your Business.

3 Ways To Improve Profitability of Your Business.

by | Nov 2, 2021 | Business coaching for women, Money Mindset and Management, Profitability and business growth, Sales Mindset, Womens Business Mastermind

I’m going to give it to you straight.

Revenue is important! But it means nothing without profitability. 

Sales matters! But not if you have so much debt you can’t even pay yourself a wage. 

Businesses need to grow! But not if it’s giving you more pain and stress than money in the bank. 

So what’s the secret sauce? 

Making sure you focus on profitability. 

Profit is where the magic happens. It’s what gives meaning and power to revenue, sales and business growth. 

Here are 3 simple things you can do right away to increase your profit immediately.

 

1. Get really clear on where you’re spending your time aka what’s the ROI on where you spend your time?

I remember my very first Sales Director role. I was so excited about the red Chanel lipsticks we’d bought our clients for Christmas gifts that I got caught up in the detail of packaging them up and sending them off. 

As a novice (and possibly overexcited new senior leader who wanted to do everything), there was something I failed to realise. 

If I was spending my time on tasks that our EA could do, this meant I wasn’t spending my time on tasks a Sales Director needed to do. 

I could’ve been using that time to coach and support my team, create sales strategies, liaise with top tier clients, build relationships with key stakeholders. 

I’ll never forget the look on my boss’ face when she walked into my office to see me up to my eyeballs amongst Australia Post packaging and red lipstick trying to match envelopes with addresses. 

She asked me straight out – what my hourly rate was. And then she asked me if I felt it was worth the investment of that hourly rate to be organising postage for our Christmas gifts. 

That was a lesson I’ll never forget and a hugely valuable one that has served me as a business owner since. 

So I ask you..

  • What tasks are you spending time on that you know deep down you could outsource?
  • What’s your hourly rate (assuming of course you’re charging what you’re worth 😉 and if you’re not, keep reading to point 2)?
  • Is where you’re spending your time giving you a good return on investment (ROI)?
  • What could you be doing with that time instead that would make a bigger impact on your biz?
 2. Charge what you’re worth

Here’s the thing. There’s a lot of undercharging going on out there. 

The double whammy of combining a sales conversation and increasing prices can be too much, resulting in an avoidance of both sales conversations and increasing prices. 

Service-based businesses can particularly struggle with this as it feels exceptionally personal to ‘sell’ yourself. 

You’re not alone. We’ve been there. 

What can you do?

There’re some practical things like 

  • Do some market research to get a feel for the market value of what you’re providing.
  • Consider how long you’ve been providing this service and when you last increased prices along with your expertise and experience.
  • Map out a communication plan and consider the rollout to both your existing and new clients so everyone still feels taken care of (depending on your business, you can increase existing clients incrementally or set a date from which they’ll be charged the higher rate)

And then there’s the inner work…

  • Dig deep into your mindset and uncover what limiting beliefs are holding you back
  • Be aware of, and change, your inner dialogue – what’s your inner critic telling you?
  • Work with a business coach who can help you discover what’s really holding you back and provide strategies to create the change you desire
  • Always remember your external success is limited by your internal progress
3. Use a clear and simple sales process. 

Many business owners (especially women) will avoid sales or don’t believe they have to be (or are) good at sales. 

Having a good sales process in place has several benefits:

  • Saves you time
  • Helps increase conversion rates of a prospect to client
  • Provides a better client experience 
  • Qualifies (in and out) the best type of clients for you to work with

All of these benefits have a direct impact on your bottom line. On your profitability.  

Top Tip: a good sales process takes the ‘thinking’ out of it for you. You can organically follow a process without having to think of the next step each time. Aaaagh the gift here is giving you back some brain space to focus on other cool things in your business. 

Myth Busting: You don’t need a big (or any size) team to have a sales process in place. Even if it’s just you in business, it’s worthwhile. 

Despite having decades of experience in sales, I still had a sales process that I used for 5 years when I was a solo business owner.

Remember: Simple is good. Tailored to your business is even better. 

The most important message to take away today is to make sure you get started on finding ways to increase the profitability of your business. And don’t forget to put a metric in place to measure each month, quarter and year to show how you’re tracking with profit numbers. 

Stay in the loop with more great business, sales and money tips here. 

WE'RE READY WHEN YOU ARE!

A NEW WAY OF WORKING IS AROUND THE CORNER

What to do if Profit First doesn’t work for you

What to do if Profit First doesn’t work for you

by | Sep 28, 2021 | Money Mindset and Management, Profitability and business growth, Womens Business Mastermind

One of the game changers in my business when it comes to managing money was reading Profit First. I was so impressed I hired a Profit First trained consultant to set everything up for me within days of finishing the book.

Armed with the *very expense* formulated excel spreadsheet, I was on my way and ready to see my profits soar! The promise of two times the results with half the effort sounded too good to be true – I was in hook, line and sinker.

But it didn’t take long before it stopped working for me. And the first three times I couldn’t make distributions my spreadsheet was telling me to, I was ready to throw in the towel.

Luckily, instead of stopping altogether, I decided to adapt it to fit for me. If it worked for me, it might just work for you too.

Here are two aspects of Profit First that WILL work for anyone:

1. Separate Bank Accounts

A huge game-changer for me was setting up a separate account for annualised and regular payments. I added up the annual expenses (e.g. insurance, accountant, all monthly ongoing subscriptions, etc) and divided that by each fortnight to make sure there is enough to cover all those big bills when they come in. It’s been such a relief to know they are all covered no matter what my cash flow looks like at the time.

2. Twice A Month

Still doing this two years later. Every 1st and 15th of the month, I have blocked out an hour in my calendar to update and transfer my money, pay bills and update my cashflow spreadsheet. This discipline means that I am not missing anything, and it’s super time-efficient. 

Here’s are two aspects of Profit First that will NOT work for everyone:

1. Irregular Income

Most businesses have weeks or months with high income, followed by the same of low income. Even if you can rely on a similar amount of income each month, at times life throws us a curveball and one of two things happen:

  1. A sure thing becomes not a sure thing – a client cancels, life happens for them, a pandemic hits
  2. An unexpected expense turns up – maybe your laptop dies, you smash your phone, or heaven forbid, you become sick and can’t deliver your services

When the cash flow dip comes, the Profit First system doesn’t work because there is barely enough to cover expenses, let alone pay yourself first.

2. Income targets aren’t hit

Some businesses have a long lag-time between all the outbound marketing and sales and when that money shows up on invoices. When I worked in corporate, it could take months before the appropriate person signed off a proposal. I remember nurturing a lead for two years before he became a client!

When you focus only on the sales, and not on the things that lead to sales (like marketing, networking, etc), then your energy can get all out of whack and you send off needy vibes. That’s not a good place to be, especially if you’re freaking out about your Profit First distributions!

What to do if Profit First doesn’t work for you

If this is you, don’t despair! The solution is about finding what does work for your specific business and adapting the Profit First system to ensure you are still making progress. Here are a few suggestions on how to do that:

  1. When you are in a period of high income in your business, put aside a larger portion to cover the lower months (your cash flow forecast should be able to guide you here)
  2. Keep a tally of any amounts you weren’t able to transfer (e.g. to your GST savings account) so that, the next time you’re in surplus, you can pay that money back
  3. Build up a buffer of three months of expenses to cover those longer droughts. This account is separate from everything else. I call mine ‘Emergency Fund’.

Have you resonated with any of this? If so, it might be a great time for a deep dive into your business with our True North in Business Diagnostic. You will complete a business health check, understand your natural behavioural style and leave with a bespoke roadmap for your business. This roadmap outlines clear next steps for you to create your profitable, wildly successful business without having to sacrifice your time or your life. Find out more by adding your details below and I will be in touch.

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Stop the pattern that’s holding you back from more money

Stop the pattern that’s holding you back from more money

by | Sep 7, 2021 | Money Mindset and Management, Womens Business Mastermind

Ever got to a point where you reflected on where you are compared to where you think you should be when it comes to the amount of money in your biz bank account? 

2019 was an amazing year in business for me income-wise, but I was spending to match my income and without a plan or strategy to put any aside for future emergencies (hello 2020, which was just around the corner!). I just figured this good run was going to continue, then improve and I’d be in the ‘millionaires’ club in no time. 

Towards the end of that year, most of my contracts finished up, a major proposal I put in for was rejected and one of my long term clients literally ghosted me. (Like seriously, who even does that after 3 years?). Then when we went into lockdown #1 and all my booked work was cancelled within a week. 

Oh, the regret! My internal chatter sounded something like this:

  • I should have saved more when I was earning good money
  • I wish I didn’t spend so much on that Mastermind group in America
  • I need to find money from somewhere, and quickly, maybe I should get a job?
  • I hope this all goes away and life can just return to normal
  • I don’t know what I am going to do to fix it

As you can imagine, there wasn’t a lot of abundant thinking going on! What my words were revealing was my scarcity mindset around money. In the words of Jen Sincero, “words are great truffle pigs to uncover your hidden thoughts and beliefs about money”.

So if you’re not where you want to be financially, you can be sure that your language needs an upgrade. After all, thoughts and language are the superhighways that lead you to take action. So when it comes to working out what’s holding you back from receiving more money, it makes sense that we start right there.

stop the pattern

When you pay attention to your language, you can make the decision to change it. Get rid of words like should, wish, need, hope and can’t.

Here are some replacements you can use to start to move the dial:

  • I have…
  • I create…
  • I’m grateful for…
  • I enjoy…
  • I can…
  • I choose…
  • I love…

Surprisingly, these small shifts in the words you use will make a big impact on your results. By honing in on my thoughts and words, then changing them to be more abundant meant the action I took was to lean into my strengths in managing money. And by the end of 2020, I had managed to save $90K – in the worst year of business I’d ever had. 

This is powerful stuff!

Over to you now… what thinking and language patterns can you stop so that you can be open to receiving more money?

If you want some additional help with shifting your language, let’s connect. Just fill out your details below and l’ll be in touch.

9 + 5 =

Money management red flags you’re ignoring and how to fix them

Money management red flags you’re ignoring and how to fix them

by | Aug 24, 2021 | Money Mindset and Management, Womens Business Mastermind

When we just focus on the money coming into our businesses by measuring our leads, sales and profit, we are only seeing one half of the picture. 

A business could be turning over $1 million in sales but at the end of the year, the owner of that business still may not have seen much of it (or scarier still, any of it!) in their own bank account.

If you want to move from a state of cashflow chaos to cashflow calm, here are the 5 red flags when it comes to money management you need to pay attention to:

You’re not paying yourself a regular ‘wage’

This is surprisingly more common than you might imagine, especially in female-owned businesses. According to the Australian Women Chamber of Commerce and Industry, in a survey they ran “only a very small percentage (37%) of respondents believed they were paying themselves a market wage when they actually paying themselves a wage at all.”

THE FIX – Ask yourself the question what is stopping you from paying yourself first? If every decision starts with your money mindset, make sure you are aware of what’s stopping you so you can change your thinking and change your results. A great resource about shifting your thinking to pay yourself is the book “Profit First” by Mike Michalowicz.

You don’t know what your cash flow forecast is for the next 3 months

An American study into why small businesses fail, found 82% of business owners put it down to poor cash flow management skills or poor understanding of cash flow. If you want your business to succeed into the future and get off the roller coaster ride of feast or famine, then this is essential.

THE FIX – Most accounting software has cash flow projection reports built-in so check out the help pages in your software of choice. If that’s all too confusing, start with a simple spreadsheet. Your industry association or State Government website will have examples to get you started. I had been using a spreadsheet for the past 2 years in my business so when Nicky and I went into Business Together, we used that as the foundation and have adapted it to suit our needs. Be sure to yell out if spreadsheets scare you, I’d be happy to help!

You aren’t making the most of Accounting Software

Over time the ease of use of accounting software has improved dramatically. According to Xero chief executive Steve Vamos, “The past year has brought home to many people in small business the need to understand in real-time their financial position and how it may change.” Gone are the days of complicated excel spreadsheets that become a burden once your income increases. 

THE FIX – I was hesitant initially when a Bookkeeper recommended I set up the cloud-based accounting software system Xero, but I have to say I have never looked back! When Cam was a baby (nearly 20 years ago now!) I did quarterly BAS for a friend who ran a business and he would give me his quarterly receipts in a shoebox #truefact! Now I scan my receipts directly into the app on my phone and attach invoices so everything is in one spot. It’s easier at tax time too, my accountant just logs in to get all the data he needs to complete my tax returns. Check out Xero, MYOB or Quickbooks to see which software is best for you.

You haven’t reviewed your auto subscriptions and annual expenses for over 6 months

Our business needs change over time and we are fortunate to have so many solutions at our fingertips. The number of apps that help us is amazing, and some of them are so affordable ‘if we buy now!’ we decide to sign up for them thinking we will use them in the future. But are they still being used 6 months later? I remember signing up on an annual subscription to have ‘pretty links’ on a website I didn’t update in a year. Then it auto-renewed for another 12 months and I was two years into paying for something I NEVER used. Sound familiar?

THE FIX – Block some time out in your calendar each quarter or at a minimum every 6 months to review your subscriptions. Ask yourself whether you are still getting a return on investment for them. Or shop around to see if you can get it for a better price. I do this at least bi-annually for my insurance and have saved money every time I do.

You don’t have an emergency fund to tap into when the sh!t hits the fan

Hello, 2020! This was the year that we all heard about emergency funds and I’m not sure about you but until last year, it was something I was going to get around to ‘someday’. I kicked myself for not putting money aside in 2019 when my income was at its highest. Instead, I made big-dollar investments in other areas of my business which although were worthwhile, didn’t provide much security last year when all my booked work cancelled in less than a week and I was left looking at an empty diary and soon to be an empty bank account.

THE FIX – Figure out what your monthly expenses add up to (including your wage) so you know the target amount you are saving. Most experts recommend having at least 3-6 months of expenses covered for you to tap into when you need to (e.g. a global pandemic, getting sick, a slow down in business). The best way to save this is to set up a separate bank account and automate a set amount to transfer each month. When business is going well, increase the amount you put away. And remember, any amount is better than nothing. So keep your eye on the target and make small regular payments if needs be.

If you find yourself in a position where one or more of these red flags is waving at you, don’t despair! There is a way out if you have a plan. And if you don’t yet have a plan, we’re here to help.

We have created our unique business methodology for women looking to release the weight of expectations of how you should be doing business so you can thrive and create a business you love, whilst still enjoying life outside of work. The True North Wheel, which includes a focus on three key areas of business success – business growth, money management & prioritising life – is a powerful force of change for any business to not only survive but also thrive.

Get in touch to find out more.

 

2 + 1 =

Scared of biz finances? It’s time to get your head out of the sand!

Scared of biz finances? It’s time to get your head out of the sand!

by | Jul 20, 2021 | Money Mindset and Management

Firstly, a massive congratulations – you’ve done the hard yards and now have an established business! You felt grown when you hit that magical ‘register for GST’ point, and now it’s just smooth sailing and cash flow calm. Right?

Umm, maybe not so much? Especially in times of lockdowns – are you with me here!

If you resonate with this, I am here to straight up tell you – there is nothing wrong with YOU. Stop beating yourself up and telling yourself the BS story that you aren’t good with money.

Instead, let’s dig deeper into why you have buried your head in the sand. And more importantly, how to turn that around.

Notice your self-talk

Listen to the story you make up in your head about money and your current financial position. This matters so much because it will determine whether you are looking through the lens of ‘scarcity’ or ‘abundance’. (Hot tip – Burying your head in the sand falls on the side of scarcity.) Remember – nothing ever great comes from a scarcity mindset! Once you are aware of your self-talk, you can shift your focus and turn it around.

Know your figures

Even if you have a bookkeeper or accountant (well done by the way for outsourcing!) you still need to be reviewing your numbers, at a minimum each month, preferably weekly. How are you tracking towards your income goal? What percentage of your income is profit? And most importantly, do you have enough tucked away in an ‘oh s*it’ fund (minimum of 3 months worth of expenses, including your own wage)?

Review your expenses

Ever heard the golden advice to cancel the gym membership that you never use? Well, there are plenty of expenses the equivalent of ‘gym memberships’ in business too. Do an audit of your monthly subscriptions and ask yourself if they are still necessary. Do you have any double-ups or even payments you’re still making that you forgot you even had?

Work out your cash flow projection

We’re just a matter of a few weeks into a new financial year and now is a great time to either review (or start from scratch) your cash flow forecast for the next 3 months (step 2 will have helped you know when your expenses are due). If you’d rather pick your eyeballs out with toothpicks than set up an excel spreadsheet, consider outsourcing this bit to your bookkeeper, accountant or get in touch with me at Business Together.

 It’s time to put your big girl pants on, put your head up out of the sand, do the things that will move you away from cash flow chaos into feeling like the Queen of your biz finances.

Let’s Start a Conversation

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Want to double your income without working twice as hard?

by | May 18, 2021 | Money Mindset and Management, Womens Business Mastermind

Want to break through to higher income level but believe you can only get there by working twice as hard?

The first thing you want to do is work out your beliefs about working harder to earn more. Where did you learn that from? Is it true? Let’s bust some of those myths! 

Here are 4 ways you can double your income without doubling your efforts:

  1. Raise your prices
  2. Restructure your business to allow for different rates for different roles.
  3. Is there a way to move beyond an hour for money service into leveraged income? 
  4. Outsource the little jobs that take up your time so that you can focus that time on bringing in the income. 

Once you start exploring other options for increasing your income without increasing the amount of hours you work you will start to see an impact on the bottom line.