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Business Coach (1:08)

In today's episode, we answer a question that comes from Tamur that asks I'm struggling with making enough money to keep my business going. What should I do? Here's the truth. If you don't solve the money problem in your business right now, your business simply won't survive. The issue that a lot of people have with this problem is that they say to themselves, I'm doing everything. I'm working hard. I'm doing long hours. This thing is just not working well. I'm here to tell you that it's not about working hard, okay? It's about what you focus on. And it's mostly about some really tough decisions. You're delaying decisions about the numbers of your business. We're going to break it down in today's lesson and make sure we do everything we can possible to salvage the business and get you to a place where you love it again, where you feel like it's worth your time and effort. Tamara, first off, thanks so much for submitting this question for today's Q and A Wednesday episode. If you have a question you want to ask, just like Tamara just did, go ahead and submit it over 100mba.net Q Tamara, first off, you're not alone. This is very common for many entrepreneurs to struggle with, right? This idea of where you're working super hard, but you could barely make enough to make it worth it, right? Your, your profits are just not there. The good news is, is that there are Specific steps you could take to get your business back on track financially. I know this because I've been through this more than once. And I want to just say, first off, this is not fun. I know how it feels. It's horrible, right? Because you feel like you exchanged your job for a worse job, right? A job that makes you work twice as hard, with three times as much stress, with less freedom, because you're tied down to making sure that this business stays afloat. But don't worry, I'm going to give you some exercises to do right now so that you can get back on track and start making the money that you deserve in your business. So that you can start to feel like it's worth your time, worth your effort, and feel re energized. Here's the bottom line. If your business is not rewarding you financially, it's just not going to be sustainable. That's it. Period. Right? If you are sustaining financial blow after blow after blow, it's not feasible for you to actually continue to do that for very long, okay? So you have to understand that it's not just about fulfillment. It's not about the purpose or the goal or the impact you're making. You still have to make it worth your time financially. Otherwise you and your family are just not gonna do it for very long. Okay? So we gotta get the financial piece of your business sorted so that you are actually taking home enough cash to make it worth your while. You're taking home enough profit so that you can reinvest into your business and grow properly, and you're focusing on the right things. So I'm gonna walk you through the steps. I'm gonna share some stories from my own experience, what worked for me. Hopefully that would inform you and your path so that way you can get out of this difficult situation. Step one. You want to understand the truth about where you are, right? You can't fix what you don't fully understand. Many entrepreneurs avoid looking at their numbers because it feels overwhelming, depressing, whatever you want to call it. But knowing exactly where you stand financially is the first step of solving the problem. So it's time for you to open up your books, your P and L sheet, your finances. If you need some help from your bookkeeper or an accountant or whatever, get some help. It's not gonna take long. I remember when I did this, I thought this was gonna take, you know, days. It actually took just a few hours for me to understand where I'm actually at. And really what you are looking at are three basic Things, your expenses, the revenue you're making and your profit margin, how much money you're keeping. Now, I must warn you, this is going to be uncomfortable, but you just got to do it right. Once you do this, actually, you start to feel energized and liberated because you have the truth. And now you know what you have to do. You know exactly where the problem lies. And I'm going to walk you through how to identify where the problem is so that you can get on track. So the first action step is to review your finances today. Look at your revenue, look at your expenses, look at your profit. Identify where the money is going and where you can cut back or reinvest strategically. Okay, so we're going to talk about expenses in a moment. And where you can cut and not sacrifice too much. Right? And where you can spend and really make money. But as a first step, open up your books, get your finances, order so you know exactly how much you're spending, how much you're making, and what the profit margin is. By the way, if you don't have a system for this, you don't have a spreadsheet for this, you could use my template, my P and L template that gives you everything with the formulas baked in. Just go to 100- MBA-NET templates and you can download all our templates there. It's absolutely free and I provide it because I know how important it is and I want to make sure your path to success is easier. Step number two, you want to focus on the most profitable activities while cutting the things that you absolutely do not need. Okay, this is two pronged. Number one, we're going to look at what actually brings in money and what is something that I can kind of cut out, even just temporarily, because it doesn't actually directly impact my sales. And this lens, this criteria is going to allow you to know what to cut so that you have some breathing room. I'm going to give you an example of what I did when I was in this situation. I looked at my P and L, I looked at my expenses. I first started with, what are the things that if I just removed today, wouldn't really impact my business, wouldn't really impact me being able to get more customers, being able to provide or serve my current customers. And I realized I was overstaffed. I actually was paying payroll for a team that was for a business much bigger than mine. Like, I don't really need all these expenses on my book. It's great to have it. If I was, you know, for to build for the future. But I'm not. I was a bootstrap business. I didn't have unlimited funds to just be in the negative. So I got brutal with my expenses. And it was tough because that means cutting staff, people that I work with, people I enjoy spending time with, right? But I had to get real, like either the business is going to survive or these people are going to have a job. So I had to do what's right for my customers, for my business, for the people that will gonna stick around after these cuts. So I cut so many expenses, including tools, including software, including people that were on the payroll, and I was able to get my expenses down by something like 65%. That automatically shot up my profit margin and allowed me to have some breathing room and be able to pay myself a reasonable salary, be able to reinvest in other things in the business that matter. And that's where the second part of this is, focusing on the most profitable parts of your business. What are some of the areas in your business that if you don't get this right, you don't make money? Okay, so for example, with my software company, Webinar Ninja, there are some areas I just couldn't sacrifice, right? Like marketing and sales. These are things that bring in customers. Every time I spend money on this, I make money. These are the things you don't want to go backwards on or cut out. You want to actually double down on. You want to cut somewhere else and reinvest there because the business doesn't get new customers without it for you. You might find that you can cut back on product development. Maybe your product is good as it is. It just needs to be sold right now. And you can cut back temporarily on product development. Maybe you can cut back on some leadership. Maybe you don't need that many leaders in your business right now. You can go leaner and cut out some high salaries. I know even businesses that cut out their customer service software like Intercom or Zendesk or whatever they choose to use because it was getting expensive. It was like thousands of dollars a month. And by saving that, they can have a little bit of buffer or spend it on marketing, and they just stop offering chat support to their customers. They just said, hey, we only doing email support. And they just use Gmail, like the business Gmail, right? The G suite email with the company domain. But the point here is, is that they just did email support via Gmail for free or at least for a very low cost each month versus thousands of dollars. So this kind of lens, you're looking at what makes me money, what can I just stop doing, even temporarily so that I can get back on track? Don't forget to take a close look at what's working in your business, right? What's actually helping you get more customers. Why don't we just put more fuel to that fire? So analyze your business right now. What is making you money? What is not making you money directly? What can you cut temporarily? What can you cut even permanently? What are some things that you can kind of cut out in terms of software or personnel or even departments altogether? Listen, let's just take a time out for a second, okay? This might seem a little bit drastic, but your business is going to die if you don't take immediate action. You need to take drastic action, right? Cutting things out that you don't need and almost like getting really scrappy again, like a very, very small startup. If you can get some relief financially by you just doing everything, you can do it. No one's stopping you from doing this. Actually, I know a very successful entrepreneur, Sal Lavinga, who is the founder of Gumroad, a huge company that helps people sell their products and services online. He got to a point in his company where he had to let go of everybody and he did everything, support marketing, everything. And it was, you know, a certain period of time. But then he started hiring again when he could afford it. Step 3 Simplify your sales process. If it's hard for your customers to buy from you, they won't, period. Simplify your sales funnel and marketing so that your offer is crystal clear. You pay me X, I will give you X. This is exactly what people are looking for. If it's clear to them, oh, this is what the after picture looks like. This is what my life is like. After I buy your product or service, then I am totally clear on what I'm paying for, right? That's appealing to me. I'm willing to pay for it. But if it's muddy and they don't really understand what they're buying or what you're offering, they're gonna leave your website as quickly as possible because they have a lot to do in their life. They have a lot of distractions, a lot of demands. They're not gonna try to figure it out. You gotta make it super simple for them to understand. One of my favorite quotes of all time when it comes to marketing and sales is a confused mind never buys. When I streamlined the checkout process for Webinar Ninja, sales went up overnight. Customers didn't need to jump through Hoops. They were clear on which plan is right for them, what they needed, what they're getting with this plan, and they're able to sign up within seconds and get started. I needed them to get inside my product so they can get value as soon as possible, so they can feel like, yes, this was the right decision. So unless you're selling super high ticket offers, 10,000, $20,000 deals, you don't need to make it super hard for them to like, get on a call with you or you know, go through a presentation. Make it easy for them to get started, make it easy for them to buy, to make the decision right. If they're on your website, make it simple. So as an extra step, review your sales process. Is your offer easy to understand? Can customers purchase quickly without any confusion? Simplify where possible, cut out steps that are not required? Do you need all that information from them when they're checking out? Or can you get the basics, the bare minimum, and then get it later once they're a customer? These are the things I'm talking about in terms of simplifying the process. It's better over here.