MBA2561 Q&A Wednesday: I'm Struggling With Making Enough Money To Keep Going. What Should I Do?

Summary

The $100 MBA Show: MBA2561 Q&A Wednesday Summary

Release Date: December 18, 2024

Episode Title: MBA2561 Q&A Wednesday: I'm Struggling With Making Enough Money To Keep Going. What Should I Do?

Host: Omar Zenhom

In this compelling episode of The $100 MBA Show, host Omar Zenhom addresses a critical concern from entrepreneur Tamara: struggling to generate sufficient revenue to sustain her business. Drawing from over two decades of entrepreneurial experience, Omar provides a structured, actionable roadmap to help business owners navigate financial turmoil and steer their ventures back to profitability.

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Acknowledging the Struggle

Omar begins by empathizing with Tamara's predicament, emphasizing that financial struggles are a common hurdle for many entrepreneurs. He states, “If your business is not rewarding you financially, it's just not going to be sustainable. That's it. Period.” (01:16)

Step 1: Understand Your Financial Situation

The first crucial step Omar advises is gaining a clear and honest understanding of the business's financial health. He highlights the importance of reviewing key financial documents such as the Profit and Loss (P&L) statement to assess expenses, revenue, and profit margins.

“You can't fix what you don't fully understand.” (03:20)

Omar recommends utilizing his free P&L templates available at 100mba.net to simplify this process, ensuring entrepreneurs can quickly grasp their financial standing without being overwhelmed.

Step 2: Focus on Profitable Activities and Cut Unnecessary Expenses

Once financial clarity is achieved, Omar advises entrepreneurs to identify and concentrate on the most profitable aspects of their business while ruthlessly cutting non-essential expenses. He shares his personal experience of overstaffing and excessive spending on tools and software, which he had to trim by 65% to improve his profit margins.

“I was overstaffed. I actually was paying payroll for a team that was for a business much bigger than mine.” (05:45)

By eliminating unnecessary costs, entrepreneurs can free up resources to reinvest in areas that directly contribute to revenue growth, such as marketing and sales.

Step 3: Simplify Your Sales Process

A streamlined sales process is vital for converting leads into customers. Omar emphasizes making the sales funnel intuitive and the offer clear, ensuring potential customers understand exactly what they are purchasing and the benefits they will receive.

“A confused mind never buys.” (08:15)

He illustrates this with his experience at Webinar Ninja, where simplifying the checkout process led to an overnight increase in sales by removing unnecessary steps and clarifying the value proposition.

Step 4: Resist the Temptation for a Quick Cash Injection

While the impulse to boost cash flow through massive sales or discounts is strong, Omar cautions against such quick fixes. Instead, he advocates for building sustainable revenue streams that ensure long-term profitability. He reflects on his mistake of relying on short-term sales tactics, which only provided temporary relief without addressing underlying financial issues.

“Instead of focusing on how can I just get through the end of the month, I need to focus on ways to make revenue predictably, consistently.” (11:05)

Step 5: Ask for Feedback From Your Best Customers

Engaging with loyal customers can provide invaluable insights into what aspects of the business are most valuable and identify opportunities for expansion. Omar shares how he reached out to Webinar Ninja's top users to discover their needs, leading to the creation of Course Ninja—a complementary product that significantly boosted revenue.

“Reach out this month to five to ten of your best customers and ask them what they love about your business.” (18:40)

This step not only enhances customer satisfaction but also uncovers new revenue streams aligned with customer demands.

Step 6: Commit to Consistent Marketing

Consistent marketing is the lifeblood of continuous business growth. Omar stresses that marketing should be an ongoing effort rather than a one-time campaign. Regular, high-quality marketing activities build a steady pipeline of customers, ensuring the business remains resilient against churn.

“Marketing is a consistent habit. Regular high-quality marketing builds a pipeline of customers.” (20:15)

He encourages entrepreneurs to commit to a chosen marketing channel—be it email, social media, or ads—for at least 30 days to observe tangible improvements in traffic, leads, and sales.

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Conclusion

Omar Zenhom wraps up the episode by reinforcing the necessity of making tough, strategic decisions to ensure financial stability and growth. He challenges entrepreneurs to implement the outlined steps diligently:

• Review and understand your financials.
• Focus on profitable activities while eliminating waste.
• Simplify your sales process for clarity and efficiency.
• Avoid short-term cash fixes and build sustainable revenue streams.
• Leverage customer feedback to enhance and expand offerings.
• Maintain consistent marketing efforts to sustain growth.

Encouraging resilience and proactive management, Omar assures listeners that with determination and strategic action, overcoming financial struggles is entirely achievable.

“You're going to feel so much better just by writing this down and taking a few steps forward in implementing those decisions.” (21:50)

He concludes by inviting entrepreneurs to subscribe to The $100 MBA Show for ongoing support and insights, fostering a community of empowered and financially savvy business owners.

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Notable Quotes:

• “If your business is not rewarding you financially, it's just not going to be sustainable. That's it. Period.” — Omar Zenhom (01:16)
• “You can't fix what you don't fully understand.” — Omar Zenhom (03:20)
• “A confused mind never buys.” — Omar Zenhom (08:15)
• “Instead of focusing on how can I just get through the end of the month, I need to focus on ways to make revenue predictably, consistently.” — Omar Zenhom (11:05)
• “Reach out this month to five to ten of your best customers and ask them what they love about your business.” — Omar Zenhom (18:40)
• “Marketing is a consistent habit. Regular high-quality marketing builds a pipeline of customers.” — Omar Zenhom (20:15)
• “You're going to feel so much better just by writing this down and taking a few steps forward in implementing those decisions.” — Omar Zenhom (21:50)

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This episode serves as a vital resource for entrepreneurs facing financial challenges, offering practical strategies and motivational guidance to navigate and overcome business setbacks.

Transcript

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[Business Coach]

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 at 100- MBA.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. Your finances. If you need some help from your bookkeeper or an accountant or whatever, get some help. It's not going to take long. I remember when I did this, I thought, this is going to 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 the 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 100mba.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, 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 going to 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, and allowed me to have some breathing room and be able to pay myself 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' 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, 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 going to 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 going to try to figure it out. You got to 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.

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[Business Coach]

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[Business Coach]

Step 4, Resist the temptation for a quick cash injection. This one is a tough one. You gotta really be disciplined. But it's tempting to run a massive sale or discount and bring in quick cash. But it can hurt your margins and really set a precedent that devalues your product for the future. Now the whole point of reason why we opened up our books, figured out what's working, what's not, did the cuts that we had to do is so that we have Some breathing room so we have some sustainable numbers to work with and make sure that we are making enough money to do things with a level head. We want to make clear decisions about our business financially. So instead of focusing on like, how can I just get through the end of the month? That's what the cutting was for. Okay? We're going to focus on sustainable revenue streams. Things like going up market, like getting bigger customers, introducing annual or two year plans. You want a really strong user base that's going to serve you and provide you revenue. Not just today, not tomorrow, for years to come. When I felt financial pressure, my knee jerk reaction was let's run a big sale, let's run a big offer and get some customers in and then that way we don't have to worry about, you know, this financial pressure right now. But then I took a deep breath and I said, no, if I have financial pressure, there's something wrong with the business model, there's something wrong with my finances. I need to cut out some things. I need to reinvest in things that are actually bringing in money. That's where we fix the problem. Not through a sale. That's just going to Band aid the solution temporarily. This helped me build a better business. Trust me, I've been there. I made that mistake where I would just rush to make a sale, make some sort of offer and bring in an influx of customers and what feel good and solve the problem temporarily. But the problem still existed. I was spending too much on things that didn't bring in customers and I would find myself in the same place in a matter of months. So as an extra step, instead of thinking of doing some sort of flash sale or some sort of like clearance, think about ways you can make revenue predictably, consistently, right? Say for example, you're in E commerce and you sell, you know, T shirts for example. And I've seen this with the brand True Classic. They do this and they want to increase sales, right? One of the things you could do is do some sort of membership like Amazon prime where people get free shipping when they're part of that membership. You know, they pay an annual fee and that's predictable revenue. Every single year or every single month, they're adding more value to the customer, they're getting them to come back. Could you offer something like that or a premium service or some sort of product that adds on to your existing product or service, increasing the lifetime value for each customer. Focus on sustainable ways to get more revenue, not short term fixes. 7 or 5. Ask for feedback from Your best customers. Go take a look at the customers that use your product or service the most, that spend the most money with you. You can look at this in your dashboard if you use a payment processor like Stripe and your loyal customers can provide really good insights into what they value most about your business, what they value most about your product or service. And you can learn how you could serve them better. Find out what other problems they have that you can solve for a fee, of course. For example, at Webinar Ninja, I reached out to our top customers and asked them, what are you using our software for? What's your business model? How are you leveraging this software? And I learned that they were doing coaching calls, I learned that they were doing live cohorted courses. And I thought, oh, that's great. And we learned how to create a great product for them called Course Ninja that allowed them to sell live coaching and courses. And it was an add on product that we created with Webinar Ninja and allowed us to increase our revenue on something that I know customers need because I spoke to them and they told me so. As an action step, reach out this month to five to ten of your best customers and ask them what they love about your business, your product, your service. Ask them what you can improve and ask them, you know, what are some other areas of your business that you wish there were solutions for and then you can come up with a strategy of how to deliver that solution. Step six and our final step, commit to consistent marketing. This matters more than you think. But if people don't know about your product, they can't buy it, right? Marketing isn't a one time effort. It isn't a thing that we do once and we forget about it. It's a consistent habit. Regular high quality marketing builds a pipeline of customers. You need to keep your business running, right? Just because you have a certain number of customers doesn't mean they're gonna last forever. They're gonna churn out, they're gonna leave you, right? And you need to make sure that you have as many and more customers coming in. And that's where marketing is so important. I committed to consistent marketing. To this day. I run as many heads as possible to promote our podcast, to promote our email list, to promote our program, the hundred dollar mba. And I run free trainings. I run live calls so that I can tell people what we're all about, tell them the value that we offer. And a lot of people get bored of this. They're like, oh, I've already said this, but you're saying something to new people, okay? They haven't heard this message yet, and they need to hear it so that they can understand the value you're offering. One of the best things I learned from public speaking training is that you want to work on a talk, like a keynote, and you want to deliver it to more and more people, new audiences. And that's how you got to see your marketing, is that, hey, I have a message about my business, the value I offer, and I need to just say that over and over and over. The value prop of what I offer to more and more people, new people, people that haven't heard it yet, right? And by the way, people need to hear it more than once for them to fully understand it and to remember it. So as an action step, choose a marketing channel, whether it's email or social media or ads, and commit consistently of marketing, talking about your business, the value offer for the next 30 days. See what happens, okay? See if you get more traffic to your website, right? See if you get more customers. See if you get more leads. Does it make any difference purely on just brand awareness? I have found that just doing consistent marketing allows your business to grow. Tamar, thanks so much for asking. Today's Q and A, Wednesday's question. Struggling to make enough money is not easy. I know where you are coming from. I've been there more than once. But it's solvable, right? Basically, today's episode, I'm gonna just sum it up for you, is all about making some hard decisions. You're gonna sit down and you're gonna commit and say, I'm going to make some decisions and I'm gonna make it happen. And I'm not gonna leave this room or, you know, I'm not gonna let today go by without putting a line in the sand. What am I gonna cut out? How am I gonna focus on things that are gonna bring in money? Right? Think about all the action items I talked about today. Simplifying your sales process, resisting the temptation for a quick cash grab, right? But do something that's going to actually build your margins for the long term. Cutting out unnecessary expenses, gathering feedback from your customers, staying consistent with your marketing, right? These are decisions you need to stick to and you got to make. And that means, hey, this week I'm going to have to have some talks with people on my team that I'm going to let go. I'm going to have some talks about cutting services that I don't need anymore. I'm going to have to cancel some things. I'M going to have to start spending money on here and make these decisions and follow through. You're going to feel so much better just by writing this down and taking a few steps forward in implementing those decisions. Thanks for tuning into the Hundred Dollar MBA show, Tamar. I hope this episode gave you clarity and the tools to turn things around for your business. And if you're listening and you have a question, if you're struggling with anything, I'm here for you. This is why I do this is I want to help people have a better journey towards success in entrepreneurship than I had. I had a very difficult time. I learned the hard way. You don't have to. You can learn from my experiences. And the best way to continue to learn from my experiences is to subscribe to the show. Hit subscribe on whatever you use to listen to this podcast or watch this podcast. Whether it's YouTube or Apple Podcasts or Spotify or whatever you'd like. Hit subscribe. You'll get the next episode automatically. Thanks so much and I'll check you in the next episode.

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