6 steps to fixing the money challenges in your business
Business money challenges show up in 2 different dimensions.
The first dimension of money is understanding the financials in your business
This includes things like:
- Reading and interpreting your financial statements
- Understanding your cash flow
- Setting and tracking financial KPIs (key performance indicators)
- Accounting for all costs in your quotes and maintaining a profitable margin on sales
When you haven’t had any formal education around “the arithmetic of business” – these things can seem complex and perhaps a bit intimidating.
But not knowing your numbers can lead to big financial problems in your business.
3 projects that I frequently work with clients on in this dimension of money are these:
1. Avoiding profit-killing discounts
Many business owners believe that the best or easiest way to win business is to shave some money off the price.
Competing on price is a race to the bottom and unless you’re very certain of the costs entailed in producing your product or service, it can result in making sales that actually lose money.
If you’re in a position where sales are rolling in and you’re making lots of money – but somehow find yourself unable to pay your bills or make your payroll – you may be making one of these cash crunch mistakes.
2. Understanding how to invest profits
Do you re-invest profits back into your business? Or do you take those profits and invest them for passive income outside of the business?
Making the right decision in these areas can have a profound impact on the amount of wealth you generate with your business.
3. Having a system for controlling, managing, and reporting the company finances
I often say that the small business community is poorly served by their accountants.
Financial reporting is for more than just taxes. Knowing the right numbers can help you make better decisions so that you build real company profits.
I often work with my clients to create a scorecard to help them assess their performance and make better decisions about their business finances.
The other dimension of money is “how do I make MORE money?”
The answer to challenges in this dimension revolve around sales and marketing.
3 steps in this area are the following:
4. Developing a step-by-step marketing plan
Our goal with this project is to significantly increase the number of clients you serve, your revenues, and your profits – without taking all your energy away from your day-to-day business.
To do this, we need a plan to create focused advertising, marketing, and online strategies to draw clients into your business week in and week out.
5. Learning solid sales skills
In the words of one of my clients: “I was good at getting people into a meeting – but not so good at closing them.”
If you want to make more money in your business, learn how to sell!
6. Finding the most effective appeal for your services
This one is related to the “profit-killing discounts” that I mentioned earlier.
When it comes to marketing, it’s important to find a way to position your products or services in a way that is different and/or better than your competitors.
This way you can differentiate yourself and your firm from your competition so that you can maintain profitable pricing.
Money challenges are solvable!
Business challenges around money can be disheartening (“we’ve been working so hard and this is all we have to show for it???”) and sometimes frightening (“oh no! we might not make payroll this week!!!”)
The good news is that money challenges have solutions.
I’ve helped many clients turn around their financial situation – often quite quickly – through better understanding of financials, better pricing, and improved sales and marketing.
If you’d like some support to resolve the money challenges in your business, I invite you to book 15 minutes on my calendar to discuss coaching.
The call is confidential – and will be the first step towards banishing money problems from your business for good.
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