🎧 Listen to the episode on THE Profit First Podcast (10 mins)
If business feels harder than it should right now, this one's for you.
It's harder to get new customers. It's more expensive to get new customers. The cost of everything is going up. And the general feeling in the country, the energy, the vibe, isn't great either.
I feel it too
I'm saying this as a business owner myself. Yes, I'm an accountant and I run an accountancy practice. But I'm also a business owner like you, and I feel it too.
Here's what we're doing about it. We're spending more on marketing this year than we ever have, even though business is tough. That's a deliberate choice. When things get hard, it's very easy to fall into a scarcity mindset and start playing small.
I'll be honest, I also don't really watch the news most of the time. Some things are worth keeping an eye on, like the Budget. But if I let all of it in every day, it doesn't give me the right energy or the right state of mind to make good decisions.
You're not alone if your business is struggling
You often hear that around 80% of businesses in the UK are struggling on some level. When you first hear that, it's a bit of a revelation. You realise it's not just you.
At the moment, I'd say it's more like 90 or 95%. There's less money in circulation and less positivity around. Lots of the businesses we speak to have cash flow challenges. Some are still carrying a Bounce Back Loan. Some have a payment plan with HMRC.
It doesn't have to be this way. But it is more common than people admit.
And as an owner you're carrying a lot. You're responsible for the results of the business. You're responsible for your team getting paid so they can pay their mortgage, as well as paying your own mortgage, as well as paying HMRC. So please don't kick yourself.
There's a season for everything
There's a season just to get through things. There's a season to plant some seeds. And there's a season to reap the rewards.
Right now, I think the work you do behind closed doors matters most. The thinking you do. The decisions you make. It's all about building resilience and thinking longer term. The trap is becoming a victim of circumstance.
The one sheet of paper exercise
This is the bit I'd really like you to do.
Get a piece of paper and draw a line down the middle.
Left side: what you cannot control
On the left hand side, write down all the obstacles and challenges in your business that you cannot control. Tax policy. What's on the news. Get it all out.
Trust me, you'll feel better. A problem shared is a problem halved, and writing it down is a way of offloading. It stops it spinning round and round in your head.
But be careful. Make sure those things genuinely are out of your control.
Be specific about cash flow
Take cash flow. "I've got cash flow problems" is far too general. There could be ten different reasons behind it, and lots of them you can control. Is it chasing customers to pay sooner? Your pricing? Going after different customers? A different offer?
Some of it you can't change today. If you've got an HMRC payment plan of, say, £3k a month, you need to pay it. If your big customers pay on 60 day terms, you might not be able to change that this month. But longer term you can reduce your reliance on them and win customers who pay in 30 days or upfront. Even a deposit can be a game changer.
Right side: what can I do about it?
On the right hand side, write: what can I do to make this 1% better? What can I do this week to move in the right direction?
It might be:
- a phone call you've been putting off
- booking that tax planning meeting before the year end
- speaking to HMRC about a payment plan
- speaking to the bank about your overdraft or a cheaper finance option
- finally making that hiring decision
- spending more time on marketing to bring customers in
- surrounding yourself with people who've been there, whether that's a community, a mentor or a coach
By writing it down, you take the power away from the problem in your mind.
You can control how you run your finances
You can't control everything. But you can control how often your bookkeeping gets done.
We think it should be done every single week. Ideally by somebody else, so you can focus on growing the business. Then look at your numbers every month so you understand where you really are.
Nobody likes those brown HMRC envelopes. But we don't want to treat Xero or QuickBooks the same way and bury our heads in the sand. If you don't identify it, how can you possibly improve it?
The triple S strategy: state, story, strategy
One more thing you can control is how you start your day. For me that means not checking email first thing and getting to the gym. We call it the triple S strategy:
- State. Put yourself in the right state in the morning.
- Story. You then tell yourself a better story for the day.
- Strategy. And from there you make better decisions.
It stops you getting dragged into all the doom and gloom.
How this links to Profit First
This is what we do with our clients. We help them see their numbers as they are, no better and no worse. Then we build a plan. Where do we want to be in 90 days? In a year? Two years? Three? What needs to change?
It's all connected. Understand the story in your business, and focus on what you can control.
Want a hand with your numbers?
If you'd like to talk it through, drop me a line at hello@wearegro.co.uk.
- Watch the £5K Growth Model webinar: free training on building a business that can generate an extra £5K a month.
- Explore the Gro Academy: get free access and learn more about Profit First.
- Book a free meeting: we can look at what profit may be on the table, along with any tax saving opportunities.