I had a phone conversation the other day that made me shake my head in dismay. It was from Sarah, a successful business owner with a team of over 30 contractors and 5 staff. She was looking to scale her business with the view to an ultimate sale years down the track.
She had nailed her niche and was highly trusted and sought after. Her weaknesses were business planning and financial skills. She wanted to know when to invest and how much of her growth to achieve on her own, without excess loans or an investor. To date, her solution had been to work with a business coach, someone possessing skills she did not have with financial knowledge in her industry. Sounds like a match made in heaven, right?
Twelve months later, after parting with a lot of money ($24,000!!) and a deal of frustration, she asked what she should have received for that spend. After all, she was paying $2,000 per month for a single two-hour session to tell her business coach what she had done. Yep that’s it – she paid someone for the privilege of telling him what she had done!
No strategy, no modelling, no analysis, no advice and most importantly, no improvement.
Her frustration was palpable. She felt taken advantage of, mistreated, used… embarrassed.
I relayed to her the experience I had working with Claire, a woman with a similar business in a different industry. Claire wanted a mentor so, after working out we were a good fit, we spent a half-day session exploring her business to establish a plan. Three key income streams were identified, and, with a bit of modelling, we worked out the break-even points for each and the areas mostly likely to achieve growth. The most promising of these was identified for investment and focus.
Claire built the systems which delivered the growth. Whilst she did this, she invested additional capital in resources so she could maintain and grow this stream. A forecast was set. Within a couple of months, she estimated she could achieve 110% of her forecast. This gave her the confidence to fast-track the systemizing of the process as she had worked out she could repay the investment within 3 months of achieving profit.
Now, don’t be thinking this all went entirely to plan. Life and business don’t work that way.
One system did not function adequately so a replacement needed to be sourced. This added an extra month of expenses. However, Claire remained confident because the modeling work we did allowed for contingency plans to cover these inevitable occurrences.
Her next step was to consider adding additional resources to fast-track the growth even further. In another half-day session, we explored the pros and cons of employment, contracting, investment etc. This involved a bit of legwork on Claire’s part to understand her own appetite for risk. (This is not an easy process, so make sure you’re prepared emotionally for this.) Eventually, Claire came up with her decision.
Over the next two months, she employed a part-timer to hedge her risk as, like Sarah, she did not want to exceed her means. I walked Claire through the exercise of establishing the key skills required for the employee to have to adequately perform the tasks. A position description was written, training documents were organised and a schedule was set.
In six months, Claire had completely systemized one of her income streams, established the process for growth and invested in a team member to facilitate this. The process involved strategy, business planning, investigation, trial and error.
Sarah is now in the decision making phase. Like all of us, she has her own demons and insecurities to deal with… and she will because she’s made of the right stuff. I’m very confident I’ll be writing about her in 10-12 months once she has worked through the process.
The moral of the story…
You are in charge. Be clear what you want and ensure you have the necessary information to achieve your potential.
And don’t spend your resources without a plan to achieve your goals.