*This post is off-topic from my usual referral and client experience topics but contains some valuable lessons for all business owners so I wanted to share…enjoy!
I could have titled this article 365 Days’ Worth of Business Lessons Learned from the Trenches of My Small Business Owner Clients.
It just sounded too wordy.
But it is the truth.
Though I spend most of my time now building the online side of my business helping small business owners and solopreneurs follow my system to generate referrals without asking and to build sticky client experiences, I still have a few clients I coach monthly with a focus on business and productivity. The number of coaching clients has decreased over the last three years based on a model shift I started back in 2015. I used to coach about 35 clients a month, then dropped it to 24 a month and now it is around 12 clients a month. All while maintaining roughly the same revenue (it’s this thing called raising your rates). 😊
This shift – or what I call structuring my business by design – has allowed me the time to focus on developing my products and services for the online side of my business so I can reach more people with my message on how to generate referrals without asking.
But through my monthly work with my one-on-one coaching clients, I have a front row seat to their struggles, challenges, successes and celebrations as they run their businesses.
Most think what they deal with is specific to their business…but most business problems are universal. The challenges I see in a client who is an interior designer are like the P&C insurance agent and are like the CPA and attorney.
Truth is – as business owners – we all struggle with most of the same issues. So, for this article I wanted to share the 6 lessons my clients (and me) learned throughout 2017 in hopes they will help you shorten your learning curve in 2018.
Let’s dive in!
1. Celebrate Success
We started the session with an update on how the business was progressing…pretty typical start to a session with my clients. Hitting the $1 million mark had been one of our focused goals of our coaching. One partner answered… “We are at $1.12 M roughly as of my last calculation.” Then he moved on to discuss another topic we were focusing on for that session.
“Wait!” I said, “Did you just hear yourself?”
The business partners looked at each other and then at me.
“You’ve hit the $1M mark and you brushed over it like you were telling me what you had for dinner” I said. “Have you even celebrated accomplishing your goal?”
When you accomplish a goal – despite your busyness or desire to move on to the next goal, project or task – you need to take time to enjoy the win. No one can enjoy it for you and you need to honor your hard work. But most importantly you need that celebration to serve as motivation to keep going, to accomplish the next goal or milestone you have set for yourself and your business.
TIP: Know in advance how you will celebrate every goal accomplished. When I hold my published book in my hands in April (2018) I will celebrate with a weekend away with my husband. The reward makes getting to the goal line that much sweeter!
2. Understand Your (Subtle) Cycles
Most, if not all, businesses experience cycles. Some are easy to identify – like the CPA with a looming April 15th deadline or the M&A (mergers & acquisition) attorney or investment banker in crunch mode as clients try to get deals closed before the end of the year.
But what is harder to identify are the subtle cycles that happen with some level of regularity in your business but since you haven’t identified the pattern, you are doomed to deal with the issues again and again like Groundhog Day.
“I just don’t know if this is the right decision for me, Stacey,” my client said sounding stressed. “I think I should do it, but this just isn’t a good time.”
I prodded for more information, “what makes this not such a good time?”
“Well, business is slower right now – seems it always is this time of year – and I am feeling a cash crunch,” he shared.
“Wait,” I said, “You’ve said that before. Do you have to make that decision right now?”
“No,” he said, “I could wait until next quarter. But what do you mean I’ve said that before.”
I explained that this same time last year, he talked about making a different decision – equal in size in terms of cost – and he said he was feeling a cash crunch. What we had determined last year that the cash crunch wasn’t real…what was real was that his pipeline of new business had slowed during 4th quarter and he internalized this as a cash crunch.
Turns out a slowdown in his pipeline happened every 4th quarter and he hadn’t acknowledged the cycle. Once he identified the cycle, he could start making different decisions. Through our discussion, he acknowledged he needed to shift big financial decision out of 4th quarter so he could evaluate them with a clear head. He also spent time deciding if he wanted to take different actions to change his 4th quarter pipeline.
TIP: Business cycles aren’t always obvious and aren’t always yearly. But you probably have some cycles you need to identify…you may not be able to change or shift the cycle but being aware of them will allow you to approach decisions with all the facts.
3. Do the Work, Take Action
As their final session ended, she looked at her business partner and then looked at me, slightly panicked. “We aren’t seeing the movement, the results we need. What are we going to do?”
Unfortunately, continuing with coaching at the time wasn’t a financial option, but they didn’t need that.
I looked at her and gently said, “You are going to do the work. Everything you need to do is in your notebook. You took copious notes during all of your sessions – you know what to do, so do it.”
And they did. They took action. They did the work – even when they didn’t want to – and their results speak for themselves. They had their best year ever.
TIP: Most of the time it is us who stands in our own way of accomplishing goals, moving forward or growing to the next level. I see it with my clients when they tell me the latest reason they didn’t do their homework from the last session. But those who see improvement, those who experience movement in the right direction…it all comes down to their willingness to do the work. Even if they sometimes have to force themselves to do it.
4. Know Thy Numbers
“I want to reduce my expenses this year down to 25% of revenue.”
“I plan to be at $1M in a year or two.”
“I must hit the $100,000 mark this year.”
My response is always the same when clients share what they want to accomplish. “Great, I say. Where are you now so we can map out a plan to get there.”
My question is typically met with blank stares.
Don’t get me wrong…those are awesome goals to aim for…but are they even real? Meaning are they attainable? And are they based on facts and not emotions?
If you don’t know where you are – if you don’t know your business numbers – then how do you know how to map out a plan to reach them?
We can’t map out a plan if we don’t know where we are starting from. And knowing your business numbers is a good place to start. To know what you need to do to decrease expenses to 25%, you need to know where you are starting from. You need to go through you monthly P&L or general ledger to get a handle on your numbers.
Knowing what is your current expense percentage now helps you answer questions like…
- What will it take to cut expenses to 25%?
- Can you jump from where you are to 25% or do you need a stair-step approach?
- Can you get there by cutting expenses alone or do you need to increase revenue while keeping expenses down?
- And how did you land on 25% as “the number?”
To hit $100K or $100M – how clear are you on how many clients it will take to hit the desired revenue number (average sale x # of clients)? Is that even feasible, do you have the capacity to handle that many more clients? Or do you need to shift your product offerings to hit your number?
I am always amazed at those who don’t know their numbers, their business numbers. Now it does happen to us all at some point which is why you should know your numbers and make it a habit to review them periodically.
TIP: Three tasks you should do every year:
- Pay attention to your monthly financials on a monthly basis or at least a quarterly basis. My book keeper sends me an email letting me know my monthly financials are available in Dropbox and that serves as a reminder to go in and check them out.
- Set a projected budget every year and track the actual spending against it.
- Do a “statement” audit a few times a year but at least once a year…end of year is a great time. A statement audit is to review the charges – particularly recurring ones – on your monthly credit cards statements and bank statements, looking for charges to services or products you don’t use. My statements audit this year will save me a few hundred bucks a month which is over $1,000 a year. Not a huge amount but it all adds up. Once you identify what you don’t use or need, eliminate it.
5. Pull Back to Go Forward
We over-commit, we stretch ourselves too thin, and live constantly in a state of FOMO (fear of missing out). We worry about connections and introductions we are missing out on, opportunities that are passing us by, and see doors that we think are meant for us but open for someone else.
So, we say yes – to joining that organization, to taking that board seat, to one more coffee. Our worry about what could be or might be drives us to say yes when we should say no. Which puts us in a head-on collision with time-consuming and energy-reducing activities that move us further away from our goals.
My client was running a full-time business and trying to start a new one on the side. But he wasn’t making traction.
We discussed at length that he needed to step down from some of his responsibilities, so he could create space to focus on the new venture he was trying to start. He knew what he needed to do, but he couldn’t bring himself to do it. He made little progress, until he had had enough.
He told me “I finally stepped off that board and away from the organization all together. I now have time to focus on what I really want to accomplish.”
I see this all the time…the over-committed business owner or professional who is literally sabotaging their success by giving away their time in areas that won’t move them forward. It’s not being on one board or involved in one organization – it’s the 3, 4 or 5 that consume your time. It’s not saying yes to a few coffees a month but looking back at your month and noticing you said yes to 10 or 12 and you said yes to say yes, they weren’t strategic.
And unfortunately, it takes us arriving at a point of being fed up for us to be willing to make a change.
TIP: As the new year starts it is a perfect time to re-assess what you say yes to. Determine if there are boundaries you need to put in place, commitments you need to step back from and know exactly how you will use the time you are about to gain back. This past year I stepped down from two organizations and though I wasn’t thrilled to disappoint anyone, I knew it was the right thing for me to do for my business.
6. Set Goals, Keep Them Front & Center
I know, I know everyone is talking about setting goals this time of year and it will continue early into next year. And then the hubbub will die down and we will all get back to business as usual.
But that is not how it is supposed to be!
You set goals so you have a strategic plan to follow so you can move forward and accomplish what you say is important. The “setting of goals” is to give you a road map…the plan you will follow after assessing where you want to end up and getting clear on where you are now. Reflection is just as necessary in any goal setting process as dreaming and visioning about the future. But goals must be more than just “here’s what I want to accomplish next year!” They need to fit into the bigger picture of where you are taking your business and yourself.
I use a Reverse Goal Setting™ process for myself and with my clients. It allows us to connect our next year’s goals to a why bigger than one year and allows us to see where we are going and how next year fits into the bigger picture, the vision of what we want our life and business to be.
I remember one goal I set at the end of 2014 during my annual Reverse Goal Setting™ process…I wanted to design my business so that it could support a month-long sabbatical and I wanted to accomplish it within 5 years. By attaching a why to it and taking the time to create a plan with milestones I would have to hit to make it a reality – I was able to take that sabbatical this year…two years earlier than planned and one week longer than expected.
I will always treasure my 5-week sabbatical in the summer of 2017 and I look forward to my next one. This sense of accomplishment pushes me forward to tackle the next big goal.
There you have it…six important lessons learned from the trenches of my small business owner clients. But there were countless other lessons I could have included. Every situation, every challenge, and every opportunity provide a chance to learn, improve and move forward. The question is – as it always is – will you apply what you learned or just keep going through the motions?
So, tell me, which business lesson resonated with you the most and is one you want to learn from and apply next year?
Is there a lesson that you did learn this year that isn’t on my list?
I want to know, so please let me know in the comments.
Here’s to you taking control of 2018 and experiencing the success you deserve!