Know your business numbers
Oct 14, 2020
Do you know your business numbers? It’s one of those areas of business that many shy away from, but it’s a crucial element you need to understand, if you want your business to grow and be profitable.
So why is it so important and what numbers do you need to know?
Make informed financial decisions
Knowing your business numbers helps you make informed decisions for your business. For starters, how will you know if your business is making money or losing it? If you know your numbers you can decide if you can afford to make investments or hire a mentor.
But knowing your numbers will also help you know if you’re on track with your business and general financial goals. You can see if you need to increase your prices to cover VAT or to better reflect the value you bring to your customers.
And if you’re at the stage where you are considering getting someone to invest in your business, you’ll have the numbers to back up why they should consider...
5 reasons to be a limited company
Jul 21, 2020
Should I be a limited company? I get asked this a lot, and the answer is it depends on your business and personal setup.
But in general, it is because of 5 key things:
1. Liability insurance
2. Employing people
3. Business partner
4. Tax & control of income
5. You want to be seen as a bigger business than you are.
Liability
Liability is a critical one. If you have insurance of any kind and you are a sole trader, if the insurance is inadequate, you are liable for your personal assets (house, car etc). So make sure you have adequate insurance cover especially if you are a sole trader. It’s the main reason I am a limited company, to protect me professionally.
Payroll
If you are employing people a limited company gives you a legal framework to work...
Which part of your business makes the most money?
Jul 07, 2020
Which of your products and services make the most money? Is it the one you love to sell? Or is it the one that is really low priced but you sell loads of?
In a business where you offer several different streams of income, you need to know which ones make you money. The ones that take a lot of effort might be making you no money and you need to think about how to generate more money from those that are bestsellers.
To do this, you need to know your cost per product or service.
Service businesses
In your business, you maybe offer a course, 1:1 coaching, workshops and an ebook as an example. There will be some direct costs (you only incur if you do the work), such as the hire of a venue, or paying a speaker, plus affiliates and associates.
Then there are the indirect costs (overheads). These include, your website charges, social media, VA and so on plus paying yourself. This is everything else, basically, in your business. You need to work out how much this is per hour by taking...
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...
How do you measure success in your business?
May 27, 2020
How do you measure success in your business? Is it all about the money, or does something else drive you?
For me, I know that I measure success largely by how much money I have in my bank account. I'm a numbers person, and I know this motivates me hugely. However, success to me also means having quite tight boundaries, so I don't work evenings and weekends as much as possible. I have 2 young children and being able to be there for them is really important to me. I want to choose to have school holidays off. In lockdown, these boundaries have become even more important as I love my business and could spend every waking hour on it! However, I need to make sure I have plenty of downtime as well.
I also value flexibility in my work, and I don't believe you have to work harder to be able to be successful. I am always looking for ways to make my business more efficient, and outsource things that take me a long time to do. I also try not to trade time for money too much, so...
6 Figure Myth
May 20, 2020
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...
Passive Income
Apr 15, 2020
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)
Apr 08, 2020
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
Apr 01, 2020
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...
Investing in your business
Mar 18, 2020
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...
