6 Figure Myth
In this week's blog, I want to talk about all the stuff I see online about "6 figure businesses". I think it can make small business owners feel that they are not getting it right if they are not doing this.
Don't get me wrong, I'm sure they are making 6 figures in their business but this is only talking about the sales they make. This isn't to be dismissed, but the bit they don't tell you is how much their business is costing to run and how much money they are taking out of the business for themselves. It may even cost them 6 figures to run their business!
It's expensive to run a 6 figure business, often with employees and freelancers working for the business, plus all the costs of various events they run and the software that is used.
I think it can be aspirational to hear about people doing well in their business, but it can also leave you feeling inadequate, especially if your business is just you.
Don't feel bad if you are not making 6 figures, focus...
Financial Goal Setting
Do you set goals? Any goals will do, but do you set them?
I set mine monthly at the moment, with everything going on, but usually every 90 days. I write one revenue goal, one systems or process goal, one launch goal and one social media/email list goal. That's it. I don't write 50 goals as I can't achieve them, plus it keeps me focussed. I put them on my computer lock screen so I am reminded of them every morning when I log in.
It is so important to set goals in your business. Time easily slips away and you find you are no further forward than you were 6 months ago. But making sure they are things you are going to work on and can aim for are critical.
When you set a revenue goal, do you just pluck a number out of the air, or take last month's number, or do you look at how that number will be made up? How much time will you be working over the period, what work are you going to do? Breaking down your goals into manageable steps is key to making sure you will...
Pricing
When was the last time you reviewed your pricing? And how much do you give away for free?
So many people I come across give everything away for free. I'm not saying you shouldn't give stuff away for free and make it some of your best content, but too many people, especially women, don't sell after the free stuff comes out. And then we are back to it being a very expensive hobby.
It's important to check that your prices are competitive in your market place, especially if you are in a price driven market, but also make sure you are charging what you are worth, plus having enough to live.
When did you last sit down and work out how much you need to charge to cover your overheads? Do you know how much your overheads are, including paying yourself? What about how many hours you work? Do you take off holidays or have quiet or busy periods in your business? Do you work full time even? And how many of the hours you work do you actually do client facing work? What about the time spent doing...
Passive Income
Do you have a passive income product? Do you even know what that is?
I didn't know anything about passive income until around 18 months ago and since then I've been hooked! It is anything that you can sell in your sleep, from ebooks to masterclasses to online courses. They are usually lower price points as they don't involve interaction from you.
The idea that it is "passive" is a bit of a misnomer though, as it takes a lot of work up front to create a course, ebook or masterclass. But once you have done it once, you can sell it over and over again, so that becomes passive.
I think every small business should have something passive to offer as, over time, it will give an underlying source of income in your business. If you've always wanted to write a book, or create something more accessible for your clients, this is a great way to do it.
Be careful of creating a lot of content before you have sold places though. Lots of people create a huge course of...
The Coronavirus Business Interruption Loan Scheme (CBILS)
The Coronavirus Business Interruption Loan Scheme (CBILS) has been revamped from Monday (6th April). They have reopened the scheme with a promise to approve more loans (not enough have been approved so far).
The criteria are:-
Turnover < £45m
UK based business
Be an ongoing business, if it weren't for the pandemic
Certify that you have been affected by coronavirus (self certification)
Open to sole traders and limited companies
You will need to provide the following:-
UK based business
Be an ongoing business, if it weren't for the pandemic
Certify that you have been affected by coronavirus (self certification)
Open to sole traders and limited companies
You will need to provide the following:-
Outline what you need (how much and why, plus how long the loan would be for)
Historic accounts
Management accounts
Up to date business plan
Cash flow forecast
Assets in the business
Plus:
Profile the owner and/or management team
The owner’s investment in the business
Whether or not security is available
Other business interest
If you are business less than 2 years old, you could apply for a startup loan instead.
I can help you with providing the information you need for a CBILS...
Why I'm still selling
This week's blog is a bit different. I feel I need to address the elephant in all our rooms and talk about coronavirus.
We live in weird times. My young kids are at home with me and my working schedule has been seriously interrupted as I try to homeschool. I thought it would be nice to have a break over the weekend, but actually structure is important to all of us so trying to think about ways to entertain the kids over the weekend (2 boys can't just hang around all day especially at 7 & 5) and have a break from work was tougher than I anticipated.
How is your business doing at this time? Are you thriving or surviving? Trying to juggle it all? Or feeling like you don't have a business left to keep going with?
Try not to be limited by your existing business. I have seen loads of great things that people are doing - online pilates, online dog training, vouchers for when restaurants reopen, and paying a deposit to be able to book first when your hairdresser...
Getting the basics sorted out
Last week, I had some interesting questions with two of my clients. One said that they were putting me on hold as they didn't have enough work for me due to coronavirus and another said they were so glad they were working with me as they need to plan for the lost of income due to the events side of their business.
Now is the time to know your numbers. Look at the following:-
- Expenses - annual or monthly ones. Can you stop any of these if needed?
Revenue - talk to your clients about what their expectations are and work with them as much as possible to find a good solution, rather than waiting for them to cancel. - Cash - do you know how long your cash will last for?
- Get a breakeven number (where revenue equals costs) so you know what income you need to run your business.
- Invoice promptly at all times, but especially at the moment, and shorten your payment terms where you can. Chase those debts soon after they are due as the financial position of companies is changing all the time.
- ...
Investing in your business
How do you feel when someone says to you that its not that you can’t afford it, that its about whether you believe that they are the right person to take your business forward? This really annoys me as every business has limits as to what it can afford, so it is always about the money for me. Maybe I don’t want to get into debt for that £5k course, or maybe that’s not my money priority right now.
There is definitely a mindset issue about spending money in your business and this often comes when you think something is too expensive or you shouldn’t spend that. So, tap into what is the issue really is. Is it that you don’t have enough money or is it that you are afraid there will not be enough money in three months’ time? If you have a clear plan as to what you were going to do with your money and where the income is going to come from over the next three months you could decide whether to invest.
Do you...
My First Podcast
I’m on a podcast! My very first one! Can you tell I’m excited?
This week I’m a guest on Emma Ward’s “The Freelancer’s Teabreak” which I’m really excited about! I have never been on a podcast and I love listening to one when I’m out and about.
I thought it would be stressful to appear on a podcast, and was really nervous, but Emma put me at ease and we just chatted, so I forgot we were recording. We talked all things numbers and had a bit of a rant about prices on websites (spoiler alert: we are both of the view that they should be there!)
Click here to listen or search for “The Freelancer’s Teabreak” wherever you get your podcasts.
I believe it is so critical to know your numbers, and many people start out as freelancers with no skill in this area. I don’t think you can run your business properly without really knowing your numbers, so I...
What sort of accountant am I?
Last week at a networking event, I told someone I am an accountant. So they started asking me if it had been a busy time in January with tax returns, to which I replied that I’m not that sort of accountant.
I spend a lot of time saying that. I am a qualified management accountant, which means that I have spent all my working life working in business, and not in an accounting practice. My dad is an accountant and I swore for years that I wouldn’t be one, but I’m definitely a chip off the old block! I also decided I would be bored if I did year end accounts and tax work, so I decided to go and work in companies, producing their monthly reporting and performance measures.
I loved it! I got to spend time with business people every day, talking to them in non-accountant speak about how the business is performing and where it is going. I got involved in budgets and forecasting, and 5 year strategic plans. I...
