Laura Webb Article published in the January 2019 Oh! Woman Women Minding Their Own Business Special Guide
Starting and running your own business takes a lot of guts. And making it profitable and sustainable requires a whole host of skills.
You need to be able to make a product or deliver a service. You need to be able to market yourself and manage operations. But you also need to understand the role money … the management of money and the strategizing around money-related issues … plays in the success of your business.
Think back to when you got started. You developed a business plan and thought through the fundamentals. What product or service will I provide? Who’ll be my ideal customer or client? How will I attract customers or clients? How much will it cost to deliver that product or service? How much should I charge for it? How much capital do I need to begin, so I don’t run short in the start up phase?
But that’s just the initial planning.
How often do you revisit your plan, analyze your business, and make adjustments? Is it economically viable? Is it as profitable as it could be and needs to be?
As business owners, we spend so much time working IN the business, that work ON the business often gets put on the back burner. But fine-tuning the plan can make all the difference between building a long-term profitable business or being stuck with a failing one.
Each year, I and my team update our one page business plan. It forces us to review everything at once … our value proposition, marketing plan, operations structure, and staffing, with special emphasis on our financial health.
There are 5 key segments of the plan.
- TOWS Analysis
- Core Values and Beliefs
- Quantitative Performance Targets
- Outrageous Goals
- Project Planner
TOWS stands for Threats, Opportunities, Weaknesses and Strengths. It begins with looking at external factors, such as trends, competition, technology, legislation, or local changes that create primary threats to … or opportunities for … your business.
Next, analyze your internal strengths and weaknesses.
Examples: Key skills your team possesses or lacks … ability to achieve goals … the make-up of your client base … expenses … uniqueness of what you’re providing … client service … team member composition and team structure … client acquisition.
Every time I go through this exercise with my team, it’s an eye-opening experience for them and me.
List the top three core values of your business. These should be your guiding stars. In my business, one of our values is competent and compassionate guidance. Clients need to know we care about their goals.
QUANTITATIVE PERFORMANCE TARGETS
You need to know your numbers! How do they compare to previous years or quarters? Do they match up with your perceptions? Are you profitable? Where are your revenues coming from? What’s the cost of generating that revenue? Is your customer base diversified … or is it so concentrated that if you lost one, it’d really hurt?
It’s not unusual for businesses to generate 80% of their revenue from 20% of their clients.
Better serve them so well they’d never dream of leaving. And while you’re doing that, work on diversifying your revenue stream.
Set one or two outrageous goals for the coming year. They have to fit into a specific timeline and be measurable.
I went through this exercise with a friend of mine last year. She said she wanted to grow her business, but attached no numbers or timeline to it. That won’t work.
Keeping things vague lets you of the hook if you fail. In contrast, assigning measurable specifics to your goals dramatically increases your likelihood of success. So think big and use your SMART$! Make your goals …
S – Specific
M – Measurable
A – Achievable
R – Relevant
T – Timely
$ – Cost Sensitive
What are the actions you need to take to reach those goals? When will you need to start? Who’s specifically responsible for taking them and when do they need to be completed? This is where the Project Planner comes in. It gives you a framework by which to track your status. Are you on target … or not? If not, what issues need to be addressed?
Lastly, minding your business also means focusing on what it does for YOU, not just what it does for others. This is a two way street where both provider and client win. They get exceptional service or a great product, and you get the means to support yourself and enjoy a comfortable lifestyle while building financial security for the future. Plus, you’re awarded a priceless intangible … a strong sense of purpose and fulfillment.
But for you to win as a businessperson, first you have to be profitable!
To be profitable, you have to respect the power of money and mind the numbers. Follow the planning and analysis suggestions I’ve outlined here and you’ll be well on your way to consistent and ever-expanding profitability and success.
Laura Webb CFP® is founder of Webb Investment Services, she provides wealth management and investment consulting services and is a Certified Financial Transitionist®. 82 Patton Ave, Suite 610, Asheville, NC 28801, 828-252-5132. www.laurawebb.com Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC Webb Investment Services is independent of Raymond James Financial Services, Inc. and is not a registered broker/dealer. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. CFP Board owns the CFP® marks in the United States. Any opinions are those of Laura A. Webb and not necessarily those of RJFS or Raymond James.