How lean is your business?
Jun 10, 2020
Do you run a tight ship, or do you keep spending money in your business?
Running a lean business is key, whatever size business you are. Overspending is a sure fire way to have you go out of business. 60% of UK small businesses fail in their first 5 years, and you don’t want to be one of them.
Examples of how to keep your business lean:
- Employ freelance staff where you can, rather than employ them, until you are sure you can keep them on the payroll permanently. Employing people can work out cheaper in the long run but only if you can guarantee work. Freelance can be more flexible.
- Make sure your marketing costs have a sold return on investment (ROI). For example, if you are going to do Facebook ads, make sure this is factored in when you are looking at how much your offer is. If you spend thousands on ads and are only selling hundreds in services, it’s not worth it.
- Don’t have anything on automatic renewal and ensure you know what is going out and coming into your business.
- Put money aside each month to go towards things you want to invest in, such as a coaching programme or new premises, or being able to have staff. Save as you would in your personal life, so you know you can afford it.
- Pay monthly where you can so you don’t have ‘surprise’ costs.
- Know your numbers, look regularly at them so you become familiar with the pattern of your business.
Have a plan as to what you want to do with the money in your business, so that you know where the money will go when you get it, and you won’t just fritter it away (paying yourself ISN’T frittering!). Make sure the plan includes paying yourself every month and have a buffer for unexpected expenses.
Running a lean business means taking out what you need/want to live and investing in the key things you need. Don’t be fooled by shiny object syndrome and look to offer too many products or services, and don’t be swayed by a course you don’t need.
I have 3 core products in my business, my “Becoming a Numbers Ninja” course, my 1:1 mentoring and done for you Xero and accounts services. I do have other products, but these are my core services. Can you say the same?
Knowing your numbers could not be more important now in the current environment, as it may mean the difference between surviving and not.
Can you afford not to know your numbers?
If you want further help, check out my 10 ways to improve your cash flow now – get it here