The Key to Smoothing Out Your Business Cycle – Part 3
The Key to Smoothing Out Your Business Cycles – Part 3
Hey there! Welcome back to Part 3 of this 3-part series on smoothing out your business cycles. Dealing with the ups and downs that everyone considers to be a ‘normal’ part of small business life – but a part that causes us huge amounts of stress and overwhelm.
In case you missed it, here’s Part 1 where we introduced the Key and looked at how it applies to our Marketing cycle and Part 2 where we looked at how to deliver a Client Experience that makes our tribe feel safe and want to hang around.
Today, we’re going to look at what is maybe the most important and also the hardest aspect of our business: our numbers.
Cashflow, Profit and Loss (PnL), Balance Sheets, Taxes, Taxes, and more Taxes, and all the other numbers that determine whether we’ll be able to pay our mortgage and vendors at the end of the month – let alone take a salary for ourselves.
How do you get your numbers in order?
Which numbers do you need to pay attention to?
Which numbers can you let slide for a while?
Which numbers do you need to see every day? Every week? Every quarter?
Numbers send new business owners (and some not-so-new business owners!) into a tizzy like nothing else can.
Do you use a formal accounting program like Sage50 or QuickBooks or is a spreadsheet okay for where you are right now?
When should you hire a bookkeeper? Can you do your own taxes?
Do you need to incorporate to be a ‘real’ business?
These are just a few of the questions that my business owner clients bring to their work with me and every case is unique. Every single one. There is never one formula that will work for everyone.
You have to find what will work for you. And you have to be CONSISTENT. Yup, especially with your numbers, you need to stay on top of them.
In Part 2 I spoke about the E-Myth Revisited and if you haven’t bought it yet, you need to go out and get it right now. It will get you started on building a business instead of a prison that pretends to be a job that pretends to be a business.
I have one more resource for you to get you started. It’s another book. Yes, another book. Jim Rohn once said that one book might save you years of trial and error and, trust me, Profit First by Mike Michalowicz is just such a book.
WARNING: It might make you cry the first time you read it.
When you realize, like I did, that you have been letting your business walk all over you, you might need to curl up in a warm blankie with a nice glass of wine.
It’s okay. Go for it. Pity parties are a necessary part of being a successful entrepreneur.
And when you’re done with the pity party, the numbers will still be there, waiting for you.
That’s the beautiful thing about numbers: they don’t lie. If your numbers say that you aren’t making any money, or are actually losing money even though you’ve managed to pay the bills… well… then… that’s the way it is.
In Profit First, Mike walks us through his own successes and disasters – every entrepreneur has both, remember Fail Forward Fast! – as he figured out that you have to pay attention to your numbers and that, if you don’t, you’re screwed.
I track my numbers daily. I look at my numbers daily. I want to know what is going on with those suckers every second. I never want to let them get out of control again.
I play this game with my clients:
I’ll ask them what their numbers were for the previous year, previous quarter, previous month, and previous week. I’ll just toss it out during a coaching call to see if they’re paying attention. If they don’t have their numbers on the tip of their tongue I can pretty much guarantee that their business is suffering.
But it’s okay. Because there’s a system. There is a way to make it work.
Here’s one of my favourite tools to stay on top of my numbers:
I track my income daily. I have the sheet beside my bed (I know! I am romance!) and every night before I go to bed I write down what my revenues for that day were.
Now, this is going to take a bit of faith, but it really does work. The months that I write down my income every day I make more money. Period.
There’s something incredibly motivating about having a string of zeroes. Day after day of zero after zero. At some point, for me it’s about 6 days, I get pissed and I decide I’m going to SELL SOMETHING TO SOMEONE. And I do.
Because, really, if you’re in business, you’re in Sales. Sales is service. If your business is not selling anything to anybody that means you aren’t serving anyone. You can chill on social media all day if you want but if you aren’t translating your social media and networking into sales then you aren’t serving the people who need you.
And there ARE people who need you.
Even on those days when it feels like you are just shouting into the wind, you are making a difference.
When you run a passion-based business, when you are following Spirit and stepping into your life purpose then you ARE here for a reason. People do need you. (And if you aren’t sure if you’re on Purpose, then you need to get your Self to the Laws of Success Weekend as soon as possible! We’ll take care of that right away.)
But even if you are totally on purpose you still have to convince people to invest with you and tracking your numbers DAILY is the best way to know if you are doing that.
Just for you, as my gift, I’m sharing my Daily Income Tracking sheet as a handy-dandy worksheet for you to print off and use. I give this to my clients and my NLP Coach Students and it is a secret weapon.
Trust me. Use it for a couple of months. Every day. For two months. Then let me know how it went for you. Or let me know in the middle. It’s all good.
Write down your bold money goal for the next two months (60-days!) and then work the sheet EVERY DAY.
Here’s the essence of what Mike tells us in Profit First:
1. If you work in your business then you need to pay yourself a salary. Just like an employee. Because you are. You can’t actually sell your business to someone else if you can’t show that you take home a salary. That’s what you get for being a very good worker, or Technician as Gerber calls it in E-Myth Revisited.
2. But you are also an ENTREPRENEUR. You are a BUSINESS OWNER. And so you deserve a percentage of the profits. Which means that your business needs to make a profit. Mike will walk you through setting up your accounts and cashflow so that you start generating a profit today. Yup, that’s right. With every sale you will generate profit for yourself as a REWARD for taking the risk to run a business.
And let me tell you: you deserve it. You deserve every penny of it. You are worth it.
You have stepped out of the ordinary to provide a service, to start a business, to become part of the local (and maybe global!) economy in a powerful way.
You chose to step out.
And you deserve to be rewarded. You deserve to have fun. You really, really do.
Consistently. With every day, every sale, every month that goes by, you deserve to have your business and your numbers SERVE you instead of the other way around.
If you’re ready to change your life and business around and build a business that serves you instead of you being a slave to your business then send me an email. Let’s see how I can serve you to make the process faster, funner, and way more effective.
Together, we can do this. Empowering women business owners is what I live for – it’s my mission. And it’s a heckuvalotta fun. Come on and check us out – we’ve got something to make your heart sing and your sales register ring.
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Tagged as: Life Purpose, Stress Management, Work-Life Balance