I was chatting with a client recently and the conversation was centered around the financial side of running a business. Because, well, we all know that when you run a business, expenses, income and the money you’re making is always going to be an important area of focus (and if it isn’t, we should probably have a talk about that!). The conversation came around to the topic of cutting costs and, especially in tough times, how we could save a buck or two. Some of the areas of spending that came up were in our teams and the programs and courses we’ve invested in over the years. But as we talked about the importance of these expenses our businesses can mount up and justified our reasons for spending on them, I said something my client said immediately landed with her.
I told her: ‘Stop looking for ways to spend money.’
The thing is, it can be easy to fall into the trap of feeling guilty about cutting back on expenses, especially when it comes to making cutbacks in your team. And as someone who’s been on the other side of the coin, especially during my VA social media manager days, I know how guilty people have felt about having to release me because I just didn’t make their bottom line when it came to choosing where the dollars needed to be spent.
Now I’m on the other side of things, working with coaches and CEOs who are having to make those tough choices, especially with the threat of a recession just around the corner. One of the things I find super interesting is how these business owners are trying to set themselves up to be able to sustain, and even grow, in this period of uncertainty. But here’s what’s really incredible… it’s totally possible!
Understanding the Financial Landscape
You only have to look at the news or any business-related online forum right now to know and realize that the threat of hard times is very real. When it comes to running your business, it never pays to have your head in the sand, ignoring what’s going on in the economic climate. It’s that old saying: “forewarned is forearmed”. If you know what might be coming, then you can start to prepare and put things into place to be able to carry you through uncertain times. After all, the ultimate goal of running your own business is to increase your profits, and have more money in your pockets at the end of the month, quarter or year. How else can you achieve your life goals or maintain the flexibility you’ve come to know and love?
The thing is, emergencies and unknown situations will always come up. They’re going to happen at some point in time while you’re running your business. It’s inevitable. So being prepared and planning for those times will put you one step ahead of the curve. You’ll want to have money in reserve, meaning you can continue to make sound investments in the future of your business. Making sensible choices that’ll help your business in the long run will keep it going well beyond any other business that hasn’t prepared for difficult times.
Three Key Strategies for Long-Term Success
There are three things I always work on with my clients to help them set themselves up for long-term success.
#1: Eliminate Debt
If you’re carrying around excessive amounts of debt in your business, your cash flow and profit are always going to be restricted. The constant cycle of getting money in so you can immediately send it back out again is a vicious circle and it won’t help to free up your cash flow. So, before anything else, do the uncomfortable thing – face down your debt and figure out how you can reduce it as quickly as possible.
#2: Increase Profit
Increase the amount of money that gets tucked away into your pocket, your investments or whatever other ways you spend it to further your business in the long run. You can do this in two key ways.
- Reduce your expenses
- Increase your pricing (and/or your sales)
It doesn’t matter whether you choose to make some cutbacks in some areas of spending in your business, increase your pricing, book more clients, or introduce new offerings. The ultimate goal is to increase the margins of profit in your business more than what you’re doing right now.
#3: Don’t Stop Marketing
This key point definitely will be getting a whole post of its own, because it’s a vital one to pay attention to. Here’s the thing… when things are difficult and you’re having to find ways in which to save money by reducing your expenses, the natural inclination can be to stop your marketing efforts. But here’s why I think that’s a terrible choice to make:
- It interrupts the momentum and effectiveness of your existing marketing efforts. Think about it… every time you stop and start what you’re doing, the algorithm has to take the time to learn what works best for you all over again. Now I’m not saying you shouldn’t take time away from social media, especially if it’s for your own peace of mind or self-care. But there are ways to manage it in your absence. I’ll dig into this more deeply in another blog!
- Your marketing is how people are going to continue to find you. And when things are tough and you’re in need of more work, being able to stay visible is the only way to keep any potential work coming in. If you’re not marketing yourself, how can you expect people to find you?
- In the world of business, marketing expenses are the number one thing most companies will cut first when times are hard. Which means far less competition and fighting to stand out from the crowd for you. That’s definitely not an opportunity you want to pass up!
There are ways to cut back your expenses and still be able to market your business effectively. Whatever you decide, keep showing up on social media, keep sending regular emails to your audience, keep recording the podcasts or applying for speaker engagements. Keep being present, while everyone else is withdrawing their marketing.
So remember, when it comes to protecting your business so that it keeps on going beyond whatever tough times you’re experiencing right now, keep these three key strategies in mind:
- Eliminate debt as much as possible
- Increase your profits (by either raising your prices, booking more work or introducing new offers—or a combination of all three!)
- Keep marketing your business
If you have questions, I’d be happy to answer them for you! Slide into my DMs over on Instagram and let’s have a chat about how you can keep your business going beyond uncertain times.