How many of you had mothers who said, “You can’t have your cake and eat it too!” Mine certainly did.
And yet here I am finishing off a nice slice of vanilla raspberry with Italian buttercream. It was delicious [thanks to Sweet Cheeks Baking Co.]!
What’s the point of having a nice slice of cake if you can’t eat it?
What’s the point of having your own business if can’t enjoy it?
It’s small business growth handled carefully that gets owners out of the business grinder and into the easy chair.
After the excitement of the honeymoon period, many small business owners find themselves toiling under an oppressive workload and struggling to keep effective employees while dodging local tax regulations. [Andy feels your pain!]
There actually is another way to have your cake and eat it, too, or have a business and actually enjoy both it and your life!
Take my client, Sweet Cheeks Baking Co. That’s the remains of their delicious cake in the above photo. Elaine and her partner Donna were nearing burnout. Despite working 12 hours, 6 days a week creating delectable cakes and pastries that had won community loyalty and many awards, they were frustrated with the business cash flow.
“Nearing our 10th year in business and annoyed that we weren’t profiting more, my business partner and I finally decided to reach out to a consultant. We were not happy with the food-specific consultants we interviewed, but we really liked Andy Kemal at INFIX the day we met him. His intelligence, experience, commitment and immediate suggestions impressed us. He kept emphasizing how to work via “the data,” and now we know why. After only a few months, we have already seen an enormous improvement in our costs, cash flow and teamwork!” ---Elaine Ardizzone, co-owner Sweet Cheeks Baking Co.
After focusing on “the data,” (to which they refer in their testimonial above) for just one year, the bakery was able to improve cashflow significantly AND pay back debt and think more positively about the future.
More importantly, however, Sweet Cheeks Baking Co additional revenues and reduced expenses means that Elaine and Donna can actually take vacations without worry. They can afford to pay staff larger bonuses and have the extra time to work on promoting and expanding the business. They now feel in control of their business rather than constantly crushed by it. They say the increase in confidence and peace of mind they now enjoy is priceless.
5 Steps to Having a Small Business and Enjoying It, Too
Most small business owners start out thinking they just need to do a marketing campaign and the money will start rolling in. Robust demand doesn’t always make you successful, however. It can make you more busy and overwhelmed, even to the point where you completely paralyze. It’s not uncommon for companies to fail because they can’t keep up with orders and customer demand. I call this “so successful you fail” syndrome!
Small business growth must occur in a clear-eyed, controlled way when the owner carves out the time and energy to take the five steps below. While these steps involve tracking many numbers and much data, I swear to you that it’s the only way to sustain for the long-term and create a business that is more like a 9-to-5 than 6 a.m.-to-midnight. Some misguided glory exists for small business owners reporting that they “put in a 100-hour week.” I’ve seen the results, however: burnt out people struggling to determine their next move after entrepreneurship.
Most of the small business owners I coach feel they do not have the time to take these steps. I can’t emphasize enough that they switch you from working IN your business to working ON your business. Working ON your business is the only way to achieve sustainable small business growth and a balanced, enjoyable life. In other words, working ON your business is the first step in having your cake and eating it, too. I cover the importance of working ON your business in this previous post.
Working on your business requires drawing back and gathering the data that reveals what’s really going on over the days, weeks, months and years you fulfill orders and hope for enough money to get by.
1) Capacity – Knowing your capacity, or how many products or services you can provide in a day, involves understanding how long it takes to complete one product or service. This means you must time track to determine when you start a job and when you finish it. You can then append a block of time to each task or product. From there you understand just how many clients you, as the owner, can take on in any given week.
Since most small businesses start in starvation mode with no clients or customers, they have a hard time shifting to more realistic understanding of their capacity. We’d all like to think if we just work hard enough, we can fulfill all orders. That’s just not possible. Understanding your capacity means sitting down with a spreadsheet and filling out time for each product or service you offer.
2) Capture – The key to boosting revenues is capturing more leads, a portion of which you will eventually convert (sell to). This includes using sales people to make calls, leveraging the most effective marketing tools today (email!), and holding events to get PR. It also means having a way of capturing interested parties contact information (again, email!) so that you can market to them repeatedly. After all, it takes 8 to 12 touches from a business before a prospect actually buys.
Always gather data on the leads captured via each outreach. Efforts that win more leads should be redoubled. The less effective should be dropped, even if they were fun at the time!
3) Convert – Getting a lead to buy has become the subject of much discussion, particularly since so many sales are now transacted digitally. When you hammer out your business’s key steps that get more leads to convert, you can repeat those for a higher “conversion rate.” You can also train your team on these steps so that they waste less time enacting ineffective methods.
Often, getting conversion rates up is a matter of trial and error. After all, each business, customer and product or service is unique. Small business must test to hone their unique best practices.
4) Compound – The most successful small businesses know that current customers tend to buy more new products or services. In fact, it’s common knowledge that acquiring a new customer costs 5 times more than selling to an existing one. While we all need new customers to keep the pipeline full, determining what other types of products or services your current customers want shortens the buying cycle significantly. You can skip the whole nurturing process. Loyalty programs tend to be very successful for retail businesses.
5) Calculate – Calculate your margins so you can know exactly which products are making you money and how much. Anyone who’s watched “The Profit” with Marcus Lemonis has seen him scolding boutique owners who keep an unprofitable product simply because the store owner’s mother designed it. Successful small business owners must get brutal and make a list of all product or services costs (labor+materials+overhead+marketing), their prices and margins. This data enables them to drop what doesn’t pay.
Did you think you left “data” behind in college? Much of life is about data, and when you get a grasp on your business data, it actually becomes your friend!
Small Business Growth Takes Conscious Tracking
Landing your business on easy street takes growth and growth is a multi-faceted thing. Too many think growing your top line or revenues means success. It doesn’t. What happens when you have twice as many orders to fill than your staff (or you) can produce? Often, it means turning to expensive business loans, and loans can make life MORE stressful rather than less. You can grow steadily, even slowly, keeping revenues ahead of expenses when you use the 5 steps toward business growth outlined here.
Want some hand-holding while you do it? Contact us, we can work out whether you have a capacity, conversion or any one of a number of problems that plague small businesses today.
With your problem identified, you can start working on it right away. My outside perspective, which comes from two decades running engineering department, overseeing costs, margins and revenue at Qualcomm. You can learn more about me here.
To sign up for your no-obligation 30-minute online consultation, click here. Choose your spot and calendar it and we’re good to go!