TIPS TO HELP YOU RESPECT YOUR REVENUE
1. Know Your Numbers
At the absolute minimum understand your overarching revenue goal and projected expenses on an annual basis. Understand the amount of money you’ll need to not just survive but to thrive. Part of the reason people start a business is to have more “work-life balance” so making sure you have enough money coming in so that you’re not forced to work 24/7 is essential to long-term success and mental health. When you have your total revenue worked out, break this down into 52 to give yourself a weekly check-in point to how well, or not, the business is performing.
2. Identify Your Levers
Do you know exactly which areas of your business bring in the greatest revenue? Which are the most profitable? Too often small business owners will be unaware they’re wasting precious time and resources on things that contribute little to the bottom line. I ask many of my clients to do some mind mapping starting with their income or revenue goal in the middle, and then literally mapping out all of the ways that revenue goal may be achieved. For example, you may have a goal of $1m, and perhaps $300k will come from events, $450k from sponsorship and the rest from products sold. Once you have the figures in place, determine how much time and resource is required to achieve them. What you’re looking for are the items that can be achieved quickly and still generate a great return. The online tool mindmeister is great for this (as is a pen and paper).
3. Ask For Help
As Benjamin Franklin famously said, ‘An investment in knowledge pays the best interest’. Unfortunately, for most of us, money education is not something we learn at school – or even at home. While this looks to be changing (Melbournian Kenny Chy won My Big Idea with his proposal that students learning about basic money management), for many when it comes to money we need to swallow our pride and ask for help. This may be investing to work with a company like Counting Clouds, seeing a financial advisor, meeting with a money mentor or enrolling in a short course about money and business. You don’t know what you don’t know, but by working with an expert you’re closer to making the right financial steps for your business.
4. Utilise Online Tools
Before I resigned from my full-time exec role in 2015, I met with a successful business owner. She suggested I invest in using an online platform, like Xero or MYOB, to make invoicing, payroll and payments easier. Her biggest message was think like a CEO from day one and start as you mean to go on. Like Line, she also suggested that speaking to an expert FIRST, before setting myself up on these platforms would ensure I understood how best to use them and could link up my accountant or bookkeeper to help me with challenges that arose. While the cost to this may be more than using a free Excel document or Google Sheet, the long-term benefits far outweigh any upfront investment.
5. Don’t Be Afraid to Let Go
If something isn’t working financially, don’t be afraid to let things go from your business. While you may want to flog it for another few months, or even years, part of being a successful small business owner is understanding when it’s time to let something go (no matter how emotionally invested you may be). This could be a product line that’s just not cutting through, a service that takes more time to complete than you make from it or, unfortunately, staff who are not fulfilling the role you hired them for.
Fiona Killackey is a business consultant and coach and the founder of My Daily Business Coach, a consultancy that provides business coaching and consulting, branding + marketing workshops and creative ideation. Fiona will be teaching a new workshop in July for people wanting to start a business, Loving Mondays: How to Plan and Start a Business.