The Big VAT Ceiling Problem (and how you can avoid getting stuck under it)

The Big VAT Ceiling Problem (and how you can avoid getting stuck under it)

If you are struggling with the thought of VAT registration, you need to read this.

Perhaps you have a fear of losing clients if you have to put your prices up 20%, or you simply don’t know how to approach the whole situation.

You can become VAT registered at any time, but businesses only have to pay VAT once their annual turnover reaches a certain threshold (currently at £85,000 in the UK). A point in your business growth that should be celebrated as you are now officially adding value to the economy, and you are well on your way to achieving that 6-figure status. But unless you registered for VAT right at the start of your business journey, this growth milestone is guaranteed to trip the majority of business owners up, especially if you are selling to consumers, who can’t claim the VAT back.

What ought to be a pragmatic, logical decision, becoming VAT registered can quickly become an emotional storm of over-thinking.

In today’s article, I want to highlight the possible stories you may be telling yourself (stories that probably not true … but affect your decision making), highlight the three choices you have over when to get VAT registered, and then give you a number of possible opportunities for you to move forward so your business growth doesn’t plateau.

First off, I want to share my VAT registration journey because I got stuck here for almost two years. I was finally forced to register for VAT on 1st April 2016 but not getting VAT registered when I set up my second coaching business in 2013 has probably been the only business decision I’ve ever regretted.

If I’d treated it as part of setting up a new limited company back then, I wouldn’t have had to deal with the painful two year experience of waiting until I was forced to register; registering only when I reached the threshold, and not before. When I started my first coaching business, CanDoCanBe, in September 2004, charging VAT wasn’t even part of my thought process. I wanted to keep things simple and my money goals back then were far lower. I was selling to other business owners but most of them weren’t VAT registered themselves.

Over the years, my business grew, but just as I thought about taking my income seriously, I lost my Dad after 18 months of cancer. My business took a back seat and I barely made a profit during those two years. When I came back to work in September 2010, all I could do was to focus on building up my business again … registering for VAT wasn’t on the radar.

By 2014, I had rebranded and started my second business, Karen Skidmore Ltd, and I had found myself getting close to the VAT threshold quite quickly. Although I had been working with various mentors at the time, technically I had all the support to create and build new revenue streams and raise my game. But somehow I never really upped my game sufficiently enough.

The looming VAT threshold had created a number of stories in my head.

I was experiencing the Big VAT Ceiling.

For two years, my business revenue came in at just under the VAT threshold; I couldn’t have worked any harder to have stayed in the same spot!

Having spoken and worked with many business owners at this level of their business, it turned out that I wasn’t alone. The stories I was telling myself about what it meant to be VAT registered, were the same as many others.

The VAT Stories That We Tell Ourselves

We all have stories running around in our heads, particularly around money and pricing. Stories about why certain people buy from us; how certain marketing campaigns work, and others don’t; how much you think people will be prepared to pay you.

These stories aren’t necessarily true or false, but are based around our beliefs and what we’ve seen, heard and experienced. When we are unsure or emotionally connected to an outcome (ie “I have to make the sale to prove that I am good at what I do”), we make what happens (or doesn’t happen) mean something to us. These stories are just assumptions, and never really based on what’s really going on.

Making the decision when to register VAT creates the perfect conditions for such stories, assumptions and over-thinking. Here were the three stories that I had running around my own VAT registration. Which ones do you relate to?

1. My clients won’t pay VAT as so few of them are registered themselves.

If you are selling to consumers, rather than organisations who can claim the VAT back, charging an extra 20% on your prices can feel an enormous hike.

When I was struggling with this, my clients were business owners, but very few of them were VAT registered themselves. I just couldn’t get my head around increasing my fees by 20%, knowing that they couldn’t claim this back.

But VAT is part of our everyday lives. We may not like paying it, but we know we have to pay it. If VAT was included in prices, then we often don’t blink an eye. It’s when you choose to buy, get excited about buying, go to the checkout and then be told “Oh, that’s another 20% please” … that’s when, as consumers, we can decide that something may become too expensive because the price suddenly changes at the last moment.

2. I hate finances – I want to keep things simple.

I love simplicity. But using simple as an excuse not to understand the stuff that would help me shift my business forward, was … well frankly … a crap excuse.

I am never going to try to convince anyone that VAT is simple but as I learnt, you don’t have to be a VAT specialist to get VAT set up. That’s why you have a trusted accountant who you take advice from, and move on.

Plus you really can’t go wrong by reading through the clear steps outlined on the gov.uk website. You just need to make the time to sit down quietly and go through each section.

3. I’m going to lose clients if I put my prices up.

Similar to story number one, but this story threw up all the insecurities I had about my prices. Pricing is one of the biggest mental exhaustions for business owners, especially for those of you who are selling your time and expertise.

Charging VAT immediately puts up your prices by 20% which may well be the biggest jump you’ve ever had to make since starting your business. So it’s no surprise that bubbling up to the VAT threshold throws up all sorts of over-thinking and worries.

Making the VAT registration decision

Registering for VAT is simple compliance. However, if you’re playing emotional head games and you start believing the stories you are telling yourself, you are going to stay stuck here at this revenue ceiling for many years.

There are three choices you can take with your VAT registration.

Choice 1: Do everything possible to NOT have to register for VAT

I hear of business owners wanting to create multiple businesses, so that they trade different products and services through different businesses. I went through this thought process myself. Legally, there are ways of being able to do this; speak to a good accountant and I’m sure you can find all the right loopholes to allow you to do this.

But, what an absolute over-complication of a very simple problem.

The mindset here is coming from a place of scarcity; of restricting how you operate, which in turn can close down all opportunities for future growth. Yes, there may be good reasons why this could work for you, but what if you are faced with the same problem again in a year or two when your separate businesses all start to bubble under the VAT threshold again?!

I’m all for tax efficiency and only paying what you owe, but if you make this choice, it’s like running a race by always looking over your shoulder at your competitors behind you.

Choice 2: Wait until you reach the threshold and you have to register for VAT

This was the choice that I made, and boy did it create stress at the time. For the few months leading up to this point, I was constantly checking to make sure I wasn’t going to get caught out. Always be seeking counsel from your accountant at this point because there are some hefty fines and potential back payments to be made if you decide to ignore this.

At the month we realised that VAT registration was inevitable, I had to quickly put together a letter explaining the situation to my clients that they would be paying an extra 20% the following month. In the end, I handled it all OK, but I created so much stress for myself. I know, looking back, that this was a big distraction and stopping me from working on future growth plans. Registering for VAT not only turned out to be a painless process, but my business revenue went happily up once I had removed the self-imposed ceiling to my business growth. I was no longer tripping up over all the VAT stories I had been telling myself.

Choice 3: Play the long game and take control over when you are registering for VAT

This is the choice I wished I had made; knowing that I was going to have to register for VAT at some point in the next year, I ought to have picked a date in the future and planned my business growth strategy and marketing campaigns around it.

Here are some of the opportunities that you may have:

  • Plan the VAT around your next price increase. All good businesses increase their prices at some point; to not only keep up with inflation and market rates, but also how you are positioning yourself and the clients you are attracting more of.
  • If you are working with consumers who can’t claim the VAT back, make your prices VAT inclusive; you don’t need to make the fact that you are now VAT registered a big story so don’t overcomplicate the buying decisions your clients have to make.
  • You could take the other approach and make the fact that you are now VAT registered a celebration; it’s a sign of your success and the fact that you are now contributing value to the economy. Choose your messaging carefully though, as your clients have to feel part of your success, rather than now feel they’ve been negatively affected.
  • Announce price increases well in advance; I’d recommend between 3 and 6 months. The more notice your clients have, the less likely they will have a grievance with you. They will appreciate your communication and professionalism.
  • Increase your prices for new clients only and take the VAT hit with your existing clients. This approach needs to be worked out carefully, making sure you can afford to do this, but grandfathering your existing clients (the provision in which an old rule continues to apply to some existing situations while a new rule will apply to all future cases) could be a smart move to keep your client base loyal, and a thank you for supporting you over the past few years.

Depending on your business model and marketplace, you may have other ideas. The important thing to remember though is when you are able to take control of when you become VAT registered, suddenly you have an amazing opportunity to step up your business to the next level of growth.

If you’ve been struggling with the thought of VAT registration and the fear of losing clients by having to put your prices up, how has this landed with you? Your personal beliefs around money create a lot of energy – positive and negative – around what you take action on to grow your income potential. And VAT registration can be a big emotional trap for many business owners, so you are not alone.

I’d love to know your thoughts. Please leave a comment below.

Until next time, do less, be more, play bigger.

 

 

 

The Growth Ceilings: what to do when your business growth plateaus

The Growth Ceilings: what to do when your business growth plateaus

Have you wondered why you are not making the progress that you thought you ought to be making by now? It doesn’t matter how much harder your work, how many more hours you put in or what money you throw at your marketing, there comes a point where your growth gets stuck. 

It happens to every business; it’s not just you! 

There is a misconception that business growth has two stages; launch and grow. You successfully launch a new business or product, and then set on growing your business by finding more clients to increase your revenue. 

But over time, the growth phase slows down; you start to plateau. 

For some, you may have two or three high revenue months. But the months between aren’t and this is where the infamous feast and famine roller coaster starts to kick in, and you don’t seem to manage to get the growth that you had in previous years. 

It doesn’t matter what you do or what new marketing initiative you put into place, when you look back on your financial accounts over the past few years, your business has bumped along at the same revenue.

Why? 

When you are selling your time and/or expertise, you will eventually run out of capacity or energy. Or worse, you run out of both at the same time and you get on the fast track to burn out as you can’t keep up the delivery of what you are selling. 

The Shirlaws Group carried out some fascinating research several years ago. They interviewed more than 700 businesses to discover that there are predictable ‘black holes’; key turnover figures where businesses get stuck because they don’t see where they have to shift strategies to get through them.

When I started to apply this ‘black hole’ research to the businesses that I’ve been working with over the past years, I began to see the same patterns at lower turnover figures. 

You get stuck because you aren’t switching up your strategy to reflect the next level of growth. 

Essentially, what got you here, won’t get you there. 

Here are the three ceiling incomes your business will predictably get stuck at, and what you can do to shift your thinking and strategy to move through each one. 

The Freelancer Ceiling – £45K

At around £4K monthly sales, there’s a very good chance you get stuck under The Freelancer Ceiling. You are selling your time either by the hour or have created a number of low priced courses or programmes. 

Even though you may be getting recommendations through word of mouth, you haven’t worked out your marketing well enough to have a consistent flow of new clients, and you start each month wondering where your money is going to come from. Although you are working hard to keep your spirits up, you are running out of marketing ideas and energy. 

To move beyond the Freelancer Ceiling you have to shift out of Freelancer Mindset, and start adopting a Business Owner Mindset. It’s time to change up your thinking, strategy and evaluate how good your services and products are, how well you are communicating that to your potential audience, and shift your client working relationship to be one of partnership.

You have to start outsourcing the stuff that is frankly below your pay grade; it’s time to release tasks such as diary management, proposal writing, invoicing and client onboarding. So if you haven’t hired your first admin support or virtual assistant, now is the time to do so. 

It’s also time to evaluate the boundaries you’ve set with your clients to ensure you aren’t over-delivering or under-charging (often both!).

And finally, you want to be able to free up some of your time to develop your intellectual capital, such as your process and framework of working with clients, marketing collateral, such as brochures and videos, and credibility proof, such as case studies and keynote speaking. 

This may sound like a lot, but over a course of a year, you will surprise yourself how much you can get done with the right plan in place. And all this will give you the strong foundations for your next growth phase, and help you get off the busy, always-be-marketing hamster wheel. 

The VAT Ceiling – £80K

The next plateau happens at around £80K; the revenue that all businesses need to register for VAT. If you’ve already registered your business for VAT when you first started, then you may not get stuck here for long. But for those of you who have waited to register your business until now, then I’m afraid the mental block can hit you hard. 

On one hand, this is simple compliance. Your business has been deemed to be contributing to the economy so it’s time to charge Value Added Tax; a phase that ought to be celebrated by all. 

However, the emotional head games begin and you start to worry about having to increase your prices by 20%, especially if you are selling to consumers rather than other VAT registered businesses. I got myself stuck under this ceiling for more than three years before I finally took the plunge and got registered for VAT. A painless process in the end and funnily enough my business revenue went happily up once I had removed the self-imposed ceiling to my business growth. 

But moving past this ceiling is much more than just registering yourself for VAT. If you’ve done the work as above to establish yourself in the marketplace, you’ve hopefully created a good suite of offers that sell well, your marketing is working and you are starting to have regular periods of £10K months.

To increase your revenue further into a 6 figure business, your Business Owner Mindset needs to shift into CEO Mindset; it’s not just about marketing yourself harder but developing a longer term game plan and being more strategic about what you want out of your business. 

If you don’t realise this, you become the bottleneck. This phase of your business growth needs you to shift your focus from marketing, selling and delivering, to putting in the right process, systems and people in place to support your growth. 

It’s time to start putting your energy into HOW your business is run; what and who is needed to support your growth. You need to ask yourself whether you’ve got the right business model in place to scale up and whether your branding – your positioning, website and social profiles – are reflecting the business you are becoming. And you have to be sure you are working with the right partners and hiring the right people for your future success, rather than what you need help with today. 

The Capacity Ceiling – £200K

As you sell more and your revenue creeps up to the £200K mark, there comes a point that whatever it is you are selling, you’re running out of capacity; time and energy.

Trainers, coaches and consultants can comfortably sell £150K to £250K worth of services and programmes with a small support team. But the bigger the contracts or the more programmes you sell, the less of you there is to go round your clients. The dynamics of your working relationship starts to change and there’s every chance you are feeling stretched, and your clients don’t feel they are getting the value that they may once had when you were a smaller business.

Your business starts to feel like project management hell, you begin to drop some balls and you don’t get the chance to catch your breath or take the time out to work on your own development. 

You start forgetting about the importance of your CEO Mindset and spending time working on the projects to support your business structure and processes, and you become a busy freelancer again, simply at a higher revenue.

If you want to grow beyond this point, then this is the phase where you stop treating your business as something you do, and start getting clear about who you want to become; the role you want to play, the impact you want to make and your bigger vision. 

Do you want to keep things simple and decide that you like what you do but you want to work less hours and reduce your stress; increase your profitability and still have Fridays off and longer holidays? 

Do you have ambitions to grow a team so that you pull back on the actual delivery to either outsource the work or recruit associates; to run an agency or consultancy that you may want to sell one day?

This is the time for you to switch your business model to a well-oiled exclusive boutique business with a waiting list, a scalable digital or training model, or create a team of mini-mes; associates, licenced practitioners, franchisers or employed consultants. 

It’s worth bearing in mind that a good business growth strategy doesn’t come in one size fits all, hence why you have to adopt a CEO Mindset and start spending time working on yourself, not just on the business. It’s important to dig deep into what it is you REALLY want out of your business and life, make decisions on where to focus your time and energy, and re-evaluate who you hang out with as you move up a league in your development. 

So, it’s really not your fault that your business may be plateauing; you couldn’t be working harder than you are already. But hopefully now you may see what shifts in your thinking and strategy need to take place at different revenues. 

If you want to dive deeper into this, then I highly recommend you join me for my next Ignite event where we spend the day together working on where you are in your growth journey and what shifts you need to take to make your onward journey a success. 

Thank you for reading. Until next time, do less, be more, play bigger.

 

 

 

 

 

 

The top 4 work boundaries to increasing profitability and avoiding burnout

The top 4 work boundaries to increasing profitability and avoiding burnout

As a woman of a certain age, I’ve grown wise to the fact that there are two things that are most precious to us. But too often we can spend our whole lives giving them away without a moment’s thought.

When we have lots of these two things, we take them for granted. But when we don’t have much of either of them, we grind along, working to other people’s schedules and demands.

They exist as a finite resource for everyone, no matter where on this planet you live, and yet we can’t make more of either of them when we run out.

They are the most valuable resources we have in our lives and businesses, and yet without some fundamental boundaries in place, we will under-value them; give them both away to anyone who demands them of us, without recognising the need to use them first on ourselves and what’s important to us.

These two things are time and energy.

When I was in my 20’s and 30’s, I often felt I had boundless amounts of both. If I felt tired, I would just grab another cup of coffee. If I was hungry and didn’t have the energy to cook a meal, I would simply throw in a ready meal in the microwave or eat a sandwich on the run.

We could do that then, couldn’t we? And without much thought to the consequences or long term impact.

But as I woke up to my 40’s, kicking off the decade with a young family (2 kids just 22 months apart), reeling from losing my dad to cancer and a business to run, my time and energy resources were suddenly depleted.

That coffee fix or sandwich on the run didn’t quite do the job as it had in my 20’s and I spent most of that decade crawling my way through quite extreme peri-menopausal symptoms, over-worked adrenals and wearing my Superwoman cape just to get by every day.

But what has all this got to do with business?

There’s a magic word that I want to focus on this month with you, that has become one of the most important strategies to my own business growth, and one that comes up time and time again in our coaching conversations with our clients.

And that’s boundaries.

Without boundaries in place to protect and fuel your time and energy resources, you will often end up working like a ‘busy fool’, as one of my clients called herself before we began working together. You may be making money, but for the number of hours you are putting in, the money you pay yourself at the end of each month, it doesn’t feel worth it.

So this month, I am shining a light on this important topic within your business. I want to share with you some boundary strategies that we need to put in place with our clients, and with ourselves.

In this article, I want to focus on the top 4 work boundaries I’d recommend you have in place in order for you to increase your profitability and avoid burnout.

1. Hours Worked

What hours are you prepared to work?

Very few clients that I have worked with have ever stopped to think about how their ideal week could look; they have allowed their weekly routine to be shaped by what their business gives them.

When you first started up your business, your work diary probably looked very empty. It’s not until you begin marketing, start to work with clients and become able to attend various events or conferences that you find your diary starting to get booked up. Meetings are being scheduled to suit other people. You don’t take into account the preparation or rest time you need between appointments. Your once open diary is now pulling you apart, you’re wearing your busy badge of honour and you find you don’t have the time to focus on projects that could grow your business.

The irony of time management is that you can’t actually manage time; you can only manage yourself.

In order to put a stop to this, I’d recommend you take a breath and work out what your ideal week could be. If a week feels too routine for you and you imagine different things happening at different times of your working month, change the time frame to an ideal month.

Here are a list of questions to help you define your ideal week.

  • My ideal working week starts on …
  • What would I do on my first working day to set the right tone for my week ahead?
  • How would I spend the other days? (For example, are there certain mornings or afternoons that are important to keep clear for certain activities?)
  • My favourite day of the week is … and this is the reason why …
  • The days and hours that I want to work with my clients are …
  • I am most in flow during this time …
  • What I love to be spending most of my time doing is …
  • Who I want to be spending more of my time with is …
  • When I am not working, I want to be … (This question is especially important for those of you who don’t have other commitments, such as family members to look after, to pre-determine your working hours. It can be far harder to switch off from work when you only have yourself to be committed to, so decide what it is you want to be doing when you are not working.)
  • How I want to feel at the end of my ideal week is …
  • What do I want to do or achieve daily?
  • What do I want to do or achieve weekly?
  • What do I want to do or achieve monthly?
  • What are you not prepared to sacrifice? (Are your Fridays sacred? Do you have to pick up children every day at 3.30 pm? Are you happy to work during the weekends but you have to have two days off during the week? Decide what time you aren’t prepared to give away so you can set those boundaries in place now and avoid frustration or resentment at a later date.)

Once you have answered these questions, decide what changes you can make to your scheduling and working hours right now. Do you need to block out certain mornings or afternoons for routine activities, such as content creation or team meetings? If you are unable to make any immediate changes, at what point in the future can you introduce this new schedule? Can you add this to your diary right now?

You do have total control over who and what takes your attention during your working week. I know some of you may not feel this is the case right now, especially if you are fully booked with clients for the next weeks or months. But when you decide what’s important to you in how you spend your time, you set the necessary boundaries needed to create the space to grow and you will realise that the right clients will want to work with you when you are available, rather than you being dictated by their schedules.

2. Capacity Available

What is your capacity and availability for taking on new clients?

I often hear business owners asking for more clients, but they haven’t stopped to consider how many clients would give them a ‘full’ business. Think of your business like a hotel booking sheet. A hotel will have a finite number of rooms to sell for every day of the week. No matter what you sell, you will find there will be an optimum level of clients or products or programmes you can sell, whilst still maintaining the level of service you want to give.

If you choose to maximise your sales and compete on price (AKA always sell at lower prices because you feel it’s easier for you to sell), you are going to find this a tough marketing strategy; competition is going to be tight and you have to ensure you have the distribution channels or delivery systems in place to keep up with the demand.

For most of you reading this, you will have better success in thinking in terms of optimising your sales and deciding how many clients or customers you can serve in any one week or month. By doing your sales numbers this way, you can work your charge rates back from here once you’ve decided how much you want to earn, and thus set your boundaries as to how many clients you can effectively onboard each week, month or quarter. This simple exercise can radically change your profitability over night and if you need help in working this through, get in touch.

Email me at [email protected] and I’m happy to arrange for one of our coaches to talk you through the process and help assess your profitability options.

3. Communication Channels

Technology is a double-edged sword; it’s made ways of communicating and corresponding with clients and prospects more accessible than ever … but that’s also meant that you are in danger of managing multiple platforms, never being able to follow a message trail and always being switched on.

First rule of communication is that you DON’T have to be everywhere or have every messaging app switched on at all times.

Yes, each of your clients may have their own preference, but if you allow every one of your clients to communicate with you on their messaging channel of choice, you are going to let your precious time and energy run out each day. You decide which communication channel(s) you want to use and set your working hours.

For example, you may want to only use email for all communications on the projects you are working on and you promise to respond within one working day or same day if you get their email before 2pm. And for all quick messages or check-ins before meetings, you keep your WhatsApp on between the hours of 9am and 5pm, Monday through to Thursday.

I have had many clients over the years, complain of having to answer WhatsApp messages on Sunday mornings or late at night. But the truth is that they have allowed that relationship to happen because they didn’t have clear communication channel boundaries set up at the start of their relationship.

If these boundaries slip as the relationship goes on (as often is the case if a client forgets or gets comfortable with working with you and treats you as they would any other member of their team), you can simply remind them of the original agreement and reset the boundary again.

For those of you who run a business that serves many hundreds of customers online, the same principle applies for customer support and help desks. Be clear on what support your business offers and at what times, and your customers will know what is expected. Bad customer support happens when there are no clear communication boundaries set up and the customer will ALWAYS have higher expectations of response than you can give them. So avoid this from happening by setting clear expectations up front.

4. Holidays & Time Off

Last but not least, is the need for holiday boundaries. I see too many self-employed business owners rarely plan their holiday times.

If you were employed, you would automatically get 20+ days holiday a year. And yet, when most people want to work for themselves because of the freedom of choice, they rarely take holidays. The irony!

For most of you, I’d put money on the fact that holidays and time off are forced upon you; either by kids’ school holidays (you can’t work when the kids are off so you swap one job for another!) or you end up booking a week off just as you reach breaking point and the holiday becomes a necessity before you keel over in exhaustion.

Holidays and days off need to be planned ahead. Without this, you will just keep working and working and working. So set the boundaries now, and look ahead over the next 12+ months and decide which days you want to set clear for holidays.

You don’t have to book anywhere, nor do you need to decide what it is you want to do with that time off. But without blocking these days out in your diary, you will automatically fill up the space with work, more work and more work. I have to do this myself every 3 or 4 months, on top of our family holiday time. If I didn’t block out chunks of 2 or 3 days around the flow of our business, I would just keep on trucking, which I know is not good for me over a long period of time.

What Now?

These 4 boundaries may be just the foundation for you to work on more, depending on what business model you run and how you work with your clients. But if you have found yourself working like a ‘busy fool’, then starting with these will hugely help shift your patterns of work and help reclaim your time and energy precious resources.

Now that you’ve read through this, I’d recommend you schedule the time to work through each one. You will need time and energy to do this; a clear space to think and reflect on what’s important to you. For some of you, you will think you won’t have the time, but this will be because you haven’t got the right boundaries in place for you and your business. Without taking this critical time out, you run the risk of keeping those wheels spinning.

If you are really super busy, start with a small slot of just 20 minutes – just the right amount of time to sit down with a cuppa – and work through the first one, Hours Worked. This is the most do-able one to put into place, especially if you start to change your schedule from two months hence. This may not make an immediate difference, but you will thanking yourself for your forward thinking in just two months time if you do!

And if you know of someone else who needs to read this article, please share it with them. You could be saving their health and sanity!

Until next time, do less, be more, play bigger.

 

 

 

Comfort and growth can’t co-exist: a one year reflection

Comfort and growth can’t co-exist: a one year reflection

This time last year, life, as we knew it, changed.

As I sit here and reflect over the past year, and of course acknowledge the trauma that happened to so many, I am also in awe by how many people have shifted and grown their businesses.

Comfort and growth can’t co-exist.

It often takes extreme discomfort for us to make big changes to how we are living and working. And for all the grief and loss that many have encountered, there are many others who have risen up, like a phoenix from the ashes.

I think of all the new experiences that I have bought that I would have never considered before March last year.

Joining fitness classes over zoom is probably something we’ve all done for the first time this past year. But now some fitness professionals are going further and making decisions to staying online; they’ve realised they are now open for a global market (time zones dependant) and have upped their tech skills to have a full TV production suite in their home studios.

This month I booked a magician for my son’s 19th birthday (never too old for a magician, yes!) through an Airbnb experience. An hour’s private show beamed straight to my laptop from a chap over in Japan; it was 4am for him! He told us that his day job was a project manager and in June last year he decided it was time to turn his hobby into his career. He now runs between 3 and 5 shows every few days, to an audience across the world, and is regularly booked for corporate events, as well as families like us.

And last week, I had a virtual photo shoot. Yes … a professional photo shoot through an app that I downloaded on my phone. I was a little sceptical about this but if you are on Instagram, you can see the results on my profile @karenskidmore. I was blown away by the quality of photos and how good Aga was at directing me by only using her voice.

What about me? What new skills and ways of doing business have I adopted?

I’ve always worked predominately online, so working on zoom wasn’t new to me. But I have had to learn how to run my all day workshops virtually, as well as our Mastermind Days for our Momentum Impact members. I’ve decided these work better online – more powerful – and I won’t be travelling into London to run these again, something I would have never considered before last year.

I’m also now working in my Plotting Shed, a new garden office that we built at the end of last year. With my husband now working from home, it became apparent we needed two separate offices. Of course, I volunteered to go outside. And I love it. (Again, you can go see what it looks like on my Insta pics.) It is the most gorgeous space and it makes me smile every time I walk down the garden path to unlock the door each morning.

Would any of these examples that I’ve shared here have happened without the discomfort of the last year?

Absolutely no.

This past year has pushed many of us to our extreme boundaries. We’ve been forced to step outside of our comfort zones and face, head on, parts (or even everything) about our business that stop working suddenly twelve months ago. You’ve made decisions about where and how to move your business through these last twelve months and, whatever has happened, there’s every chance your business is very different from where it was a year ago.

Acknowledge what you’ve achieved in your business through these uncomfortable months. And know that the potential of what is possible happens because you don’t stay comfortable.

Which leads me to wonder how we can all make sure we take full advantage of a little (or a lot of!) discomfort from time to time so that we can keep moving forward and ensure we are thriving in business.

If you want to discuss what I’ve shared here today and you’re interested in being challenged in what you could achieve, get in touch.

Until next time, do less, be more, play bigger.

 

 

Money energy in your business: how to stop chasing pie-in-the-sky figures that burn you out

Money energy in your business: how to stop chasing pie-in-the-sky figures that burn you out

Your business instinct is far stronger than you give it credit for.

However, if you are worn out and feeling frazzled (and hey, don’t we find ourselves at the end of our tethers most days right now!) it’s easy to find yourself fire-fighting your way through your business week.

I want to give you an opportunity to recalibrate and define clearly what it is you need from your business to enable you to grow. In my book, True Profit Business, I teach a model for growth that at its core has something I call The True Profit Compass.

A compass is an instrument used for navigation, but it doesn’t tell you which direction to go in. It aligns you to your magnetic north so you can orientate yourself before deciding where to do next.

The True Profit Compass works exactly like this. It aligns you to your magnetic north – your business instinct – and helps you make decisions to design and run your business to serve you, rather than burn you out.

There are three energies at play in this compass; money, impact and creativity. And it’s money that I want to focus on with you today. Although money may not be your core driving motivator for growing your business, there’s no doubt you have a need for money coming in.

I look at money being split into two sections: the time and income needed to help you flourish.

Your time is a limited resource, which often goes unchecked and undervalued. It’s important you consider what boundaries you want to set, and the systems and business model needed to give you the time that you want.

For income you may not need much income for day-to-day living. However, I don’t know many people who started their own business to just ‘get by’ so let’s get you clear on what you need, as well as the amount you want to fulfil your wealth goals and life plan. Plus if you plan to grow, you will absolutely need money for investment in your business growth and expansion (hiring people, putting in systems & marketing budget) so you have to consider how big a business you really want to have one day.

Let’s dive into each one and give you a framework in order to work out what time and income is best for you.

Your time

What hours are you prepared to work?

Very few clients that I’ve worked with over the years have stopped to think how their ideal week or month could look; they have often allowed their business week to be shaped by what their business gives them. If you could reset your work schedule for six months from now, how would it look; how would you spend your time, what hours would you work and which days would you take off?

What is your capacity and availability for taking on new clients or selling new programmes?

I often hear business owners asking for more clients, but they haven’t stopped to consider how many clients would give them a ‘full’ business. Think of your business like a hotel booking sheet. A hotel will have a finite number of rooms to sell for every day of the week. No matter what you sell, you will find there will be an optimum level of clients or products or programmes you can sell, whilst still maintaining the level of service you want to give.

If you choose to maximise your sales and compete on price, you are going to find this a tough marketing strategy; competition is going to be tight and you have to ensure you have the distribution channels or delivery systems in place to keep up with the demand. For most of you reading this, you will have better success in thinking in terms of optimising your sales and deciding how many clients or customers you can serve in any one week, month or programme.

By doing your sales numbers this way, you can work your charge rates and prices back from here once you’ve decided how much you want to earn.

What are you not prepared to sacrifice?

  • Are your Fridays sacred?
  • Do you have to pick up children every day at 3.30pm?
  • Are you happy to work during the weekends but you want two days off during the week?
  • Do you always want to have July and August off?

Decide what time you aren’t prepared to give away so you can set those boundaries in place now and avoid frustration or resentment at a later date.

What changes do you want to make in the future to the way you spend your time now?

For some of you, making changes to your current schedule may not be feasible. If you are booked up with work for the next few months, run a busy clinic or see clients in a regular time slot every week or month, then you may need to look at your diary for three or four months hence.

If you want to move your diary schedule around in the future, what will it look like and when do you want to do it? And I’d recommend blocking out this time now before you find yourself filling it with more client work!

Your income

I avoid asking my clients to decide how much money you think your business can or should make. When setting money goals, it’s often your ego that makes these decisions because of external influences; it’s important to be inspired but if all you see, read or hear is success defined by six or seven figures, then this will have an influence on when you believe your business will be successful. What I want you to do here is take a more inward approach to how much income you need and want to make from your business.

Let me share a story about a client I recently worked; she came to me with a financial target of £100,000. But once we worked out how much she needed to live on, how much she wanted to invest in her business and how many clients she actually wanted to work with at any one point, it turned out she didn’t need to stretch herself to find £100,000 in sales over the next year; her actual financial target was only £65,000.

This was her third year in business and, although she had achieved great things, she was exhausted by selling too many low-priced programmes and dealing with a 6,000 strong Facebook community. Once we had worked out her income streams, simplified her products and programmes to give her less to sell, and mapped out her marketing campaigns for the year ahead, she was visibly more relaxed; she had far less to do than she thought she’d end up with.

It turned out that the initial financial target of £100,000 came from the pressure she had been putting on herself to be seen as successful by her peer group, and if I’d been focused on helping her achieve her original six-figure target, she would have ended up burnt out and putting in the wrong growth strategy.

She still wanted to grow a six-figure business at some point, but her growth strategy for the next year was about simplifying and restructuring her business model so she had a stronger and more sustainable foundation from which to build on in the following two years.

This is why it’s important to know your financial needs right now, as well as what you want to achieve, and keep reviewing them as you grow. Don’t chase figures based on what you think is expected of you or your business.

How much income do you need right now?

If you haven’t done so already, you need to work this out. Not in your head; sit down with your bank statements, your bills and a calculator. If you are living with someone else, this may be a joint conversation. If you need to get a grip on your credit card debt or long-term savings plans, get help and speak to a financial advisor.

Too many business owners don’t know what they need to earn and are simply going about their sales on a wing and a prayer.

How much income do you want in the future?

Is there a savings pot you want to fill up? Have you got short- term savings you want to build for a holiday? Or perhaps longer-term savings for investing in a second property or pension? Again, get help from a financial advisor if you need to. Don’t wishfully think what you want; work out what that figure needs to be and over what time period you could work towards it.

What does your business need to sell to give you these income figures?

Once you’ve worked out your income figures, how does this translate into turnover figures? Remember, your income is different from profit (you have to pay tax), which is different from turnover (you have expenses). So once again, if you haven’t got these figures clear yet, work them out.

This money work is a big part of what we do in Momentum, our business growth programme. Yes, sales targets are set but without doing the work on what net/gross profit, business costs and forecasted income, you could be building a business on shifting sands; whatever growth in sales you get one quarter, disappear in the next because you haven’t got a solid money foundation in place.

What short-term ‘costs’ will give you long-term ‘gains’?

You may be in a period of growth in your business where your expenses are high because you are investing in new systems, processes or hiring team members. A lack of cashflow is what causes most businesses to fail, so rather than waiting to sell ‘enough’, do you need to seek external financing to fund your growth plan? If so, what options can you look at or how much do you need?

What now?

Working through this framework will help give you your magnetic north. You’ll find more about how to work through the energies of creativity and impact in my book, True Profit Business. But in terms of money, I hope that you can see how this can help stop you chasing pie-in-the-sky figures that are often fed to us by what we see on our social feeds, and now have realistic and sustainable figures to work towards, whilst still giving you opportunities to stretch.

Money pressures can break us.

And when we don’t give ourselves this opportunity of spending time to fuel our business instinct and working on our navigations from our True Profit Compass, we end up exhausting ourselves. Burn out is not a rite of passage to success … you can design your business to work FOR you and what it is you want out of life.

Until next time, do less, be more and play bigger.

 

 

Using intuition in your business: critical insight or a risky delusion?

Using intuition in your business: critical insight or a risky delusion?

You know far more than you give yourself credit for.

However, trusting yourself to know this and using your intuition to help you grow a business is not a natural way for many of us.

If you are like a lot of people who I work with, you have spent much of your professional career thinking your way through challenges and problems. Your default setting has been to seek answers externally (AKA ask other people what they think) and engage your frontal lobe, the part of your brain behind your forehead where you access to process information, analyse, think and plan.

You probably already use phrases such as ‘I knew in my gut that it was the right thing to do’ or ‘I felt the tug on my heart strings’. But using these insights in a business context often get swept away and ignored.

In doing some digging around for some quotes on intuition, I came across this article from Harvard Business Review from way back in 2003.

“The trust in intuition is understandable. People have always sought to put their faith in mystical forces when confronted with earthly confusion. But it’s also dangerous. Intuition has its place in decision making – you should not ignore your instincts any more than you should ignore your conscience – but anyone who thinks that intuition is a substitute for reason is indulging in a risky delusion.”

I’d like to think that using our intuition in business has come a long way since this article was first published, but if you are a Gen X like me, it’s hard to get away from the cultural programming we’ve had.

We have grown up in a culture that favours logic; at school we were programmed into learning, sitting in rows and changing lessons each time the school bell rang, followed by working our up a hierarchical career path that celebrated success measured by numbers and time.

Today, we have access to an endless supply of productivity apps, automation systems and bluetooth devices all designed to send us constant notifications and help us do more in less time. Our smartphones can tell us how well we are eating, sleeping and exercising, which means we don’t have to think for ourselves.

And when it comes to our business and marketing, we look to the algorithms to make decisions on when to launch a new programme or what content to create.

But first, why is your intuition so important to access?

If you allow yourself the space to connect and access your inner wisdom, you often find far simpler and easier answers to your challenges and problems. There’s no need to spend days analysing spreadsheets or writing up lengthy reports.

The answer often comes through as a clear path forward; it just feels right.

The official definition of intuition is:

“the ability to understand something instinctively, without the need for conscious reasoning.”

And if we go back in time to see the origins of the word in mid-15c:

intuicioun, “insight, direct or immediate cognition, spiritual perception,”

Hang on … instinct? spiritual? Are you going down the woo-woo route and telling me that all we need is to simply burn incense sticks and spend our time meditating on problems?

No. Spend too much of your time going within, and there’s no doubt you can find yourself ‘away with the fairies’. Very little action happens and if you then find it hard articulate or communicate your business direction with your team or customers, it all becomes very ethereal.

Logic still has a place and can helpfully sanity check ideas, bring concepts to form and create the structure, process and systems to allow you to run your business with ease. But without giving yourself the opportunity to open yourself up to feeling, listening and sensing what your instinct can tell you, you are missing out on some of the simplest and easiest options available to you and your business.

Your intuition will always have your back. It’s giving you feedback and insight into what is right for you, the person you are and what it is you truly want out of life.

So how to go about learning how to access your intuition?

For me, I have had a crazy relationship with my logic head.

I am naturally wired to be ruled by my head, which serves me well when working with clients and working through business infrastructure and systems quickly, and seeing the commercial opportunities linked with a bigger vision. However, when left unchecked, I can power on through and forget to take breaks to conserve my energy.

I crashed and burned when I was in my early 40’s, so I have learnt the hard way. When this happened, I realised I had lost all my connection with myself from the neck down. Burn out can do that to you! I remember being a class teaching pelvic floor exercise and sobbing silently into my yoga mat when I realised I could not engage any muscles in my pelvis area; there were no connections between my brain and core muscles. So was it any surprise that my intuition had very little chance of being heard?

A big part of my recovery journey, and understanding my midlife hormonal changes and menopause shifts, became looking at how to connect with my body. I stopped running and started dance classes instead. Nia Dance has become a regular part of my fitness routine now, connecting me to my hips and allowing me to literally shake away tension in my body.

I tried my hand at meditating but to be honest, it’s not a practice that I find much time for. I know that goes against the trends but I prefer a slow walk through the trees and spending my time watching the sun set, rather than sitting still, trying to calm my mind.

I’ve come to realise that, although every one of us has the ability to connect with our intuition, I have had to work at how to do this. And I know from speaking to many other business owners over the years, that I am not alone.

So here are my four simple steps that got me started.

1) Take the time to know yourself.

There are a tonne of psychometric tests and personality profiles available, often affordable and without the need to attend lengthy programmes. My favourite ones include MBTI Basics, Insights, Talent Dynamics (and also called Wealth Dynamics) and Human Design. Profiling oneself is not about trying to fit in.

Each one of us is unique and we don’t arrive on this planet with an operations manual. So the more we can understand our idiosyncratic quirks and behaviour traits, the less it becomes about what others expect of us and more about what it is that we want and value.

2) Spend more time in your body.

Many of you will exercise for the sake of fitness and health, measuring success by steps or sweat. But because so much business is often solved in our heads, these kinds of exercises can feed the logic brain. Spending time on moving your body consciously can really help you connect with the neural pathways that run around your body.

Movement such as dance – prancing around the kitchen rather than following a structured class – and slower walking focused on your posture – noticing how your feet connect with the ground with each step – can be simple ways of sensing your body and spending time ‘out of your head’.

3) Recognise that fear is different from intuition

… and sometimes it can be good to take the moment to ask the fear what it may be trying to tell you. Is there anything that you can put in place to make your next steps less risky for you? Perhaps you need more time to put your decision into action … maybe you need to hire some help.

If you choose to ignore your fears, you may find that you pull yourself back from taking action. So use your fear to shine a light on anything that you may avoid simply because it feels uncomfortable as this can be helpful in making sure you don’t avoid taking action on your decisions.

4) Create content without an agenda.

So much focus is given to the call to action and making sure whatever content we create in our business has a purpose. This can stifle creativity and stop many of us from exploring our ideas and methodology of our work. I’ve seen clients of mine flourish when I suggest that they blog without agenda; just write for the hell of it and see what comes out. I find writing incredibly cathartic and helps me form my ideas. Journaling can be incredibly powerful for this, too.

But if writing isn’t your thing then tune in to what form feels good for you; it could be that you paint or doodle your ideas. The important thing is that you give yourself permission to create for you … and you alone. This doesn’t have to be published or be made into a marketing campaign; you are simply allowing your creativity to come into a form that allows you to see patterns and recognise the power of who you are and what it is you want to express.

I believe that now, more than ever, is the time for you to place more emphasis on what’s within you and who you are.

Much of the expert space – coaches, consultants, trainers, designers, creatives- is now over-crowded, and the few market leaders rising to the top are simply being copied; their marketing and branding being bastardised.

Rather than looking outward first and choosing how you run your business based on logic success metrics, such as having to have a 6 figure business, give yourself the space to design and grow your business starting from within you and being clear on who you are and what you stand for.

I get that it may be easier to ask other people for answers to your questions about your business, but be aware that for every person you ask, you are going to get different answers.

When you start from within, and learn to trust your instinct, you can design and grow the right business that will support and enable you to show up and realise your full potential. And, in my experience, you’ll have an easier ride, reduce your mental bandwidth and feel less stressed in the process.

Until next time, do less, be more and play bigger.

 

 

 

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