The top 4 work boundaries to increase your profitability and avoid burnout

The top 4 work boundaries to increase your profitability and avoid burnout

As a woman of a certain age, I’ve grown wise to the fact that two things are most precious to us: time and energy

But we can often spend our whole lives giving them away without a moment’s thought.

When we feel we have lots of time and energy, we can take them for granted.

But when we don’t have much of either, we grind along, working to other people’s schedules and demands. They exist as a finite resource for everyone, no matter where 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 and 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.

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

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

But as I woke up to my 40s, 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 20s, and I spent most of that decade crawling my way through quite extreme peri-menopausal symptoms, over-worked adrenals and wearing my Superwoman cape to get by every day.

But what has all this got to do with business?

There’s a magic word that I want to share with you that has become one of the most essential strategies to my business growth and comes up repeatedly in our coaching conversations with our clients.

Boundaries

Without boundaries 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 the amount of hours you put in and the money you pay yourself at the end of each month doesn’t feel worth it.

In this article, I’d like to share the top 4 work boundaries I’d recommend you have in place to increase your profitability and avoid burnout.

1. Hours Worked

What hours are you prepared to work?

Very few clients 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 started your business, your work diary probably looked very empty. It’s not until you begin marketing, start working with clients and become able to attend various events or conferences that you find your diary getting booked up. Meetings are being scheduled to suit other people. You don’t consider 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 don’t have the time to focus on projects that could grow your business.

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

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

Here is 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?
  • How would I spend the other days? (For example, are certain mornings or afternoons important to keep clear for certain activities?)
  • My favourite day of the week is … and this is the reason why …
  • The days and hours 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 crucial 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 you want to do 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, could you decide what changes you can make to your scheduling and working hours? Do you need to block out certain mornings or afternoons for routine activities, such as content creation or team meetings?

If you cannot make any immediate changes, at what point can you introduce this new schedule? Can you add this to your diary right now?

You control who and what takes your attention during your working week. Some may not feel this is the case, especially if you are fully booked with clients for the next weeks or months. But when you decide what’s important to you in spending your time, you set the necessary boundaries to create the space to grow. 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 an optimum level of clients, products, or programs you can sell while maintaining the service level 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 challenging 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 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 on how many clients you can effectively onboard each week, month or quarter. This simple exercise can radically change your profitability overnight, and if you need help working this through, get in touch.

Please email me at [email protected], and I’ll happily 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 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 constantly switching on.

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

Yes, your clients may have their preferences, but if you allow them to communicate with you on their messaging channel of choice, you will 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 the same day if you get their email before 2 pm. And for all quick messages or check-ins before meetings, you keep your WhatsApp between 9 am and 5 pm, Monday through Thursday.

Over the years, I have had many clients 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 team member), you can remind them of the original agreement and reset the boundary again.

For those of you who run a business that serves hundreds of customers online, the same principle applies to customer support and help desks. Could you clarify what support your business offers and when so your customers know what is expected? Lousy 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 upfront.

4. Holidays & Time Off

Last but not least is the need for holiday boundaries. I see only a few self-employed business owners rarely plan their holiday times.

If employed, you would automatically get 20+ days of 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 many, holidays and time off are forced upon you, either by kids’ school holidays 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.

Without this, you will keep working and working and working. 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 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 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 keep on trucking, which I know is not suitable for me over a long period.

What Now?

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

Now that you’ve read through this, I recommend you schedule the time to work through each. You will need time and energy to do this, a clear space to think and reflect on what’s important to you. Some of you will think you won’t have the time, but this will be because you need to have the proper boundaries for yourself and your business. You need to take this critical time out to avoid keeping those wheels spinning.

If you are 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 doable one to put into place, especially if you start to change your schedule two months hence. This may not make an immediate difference, but if you do, you will thank yourself for your forward thinking in just two months!

Until next time,

 

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.

 

 

 

 

 

 

How to start your week off right

How to start your week off right

There’s absolutely no doubt, that what you do on a Monday morning sets the tone for the rest of the week. And often the weeks proceeding.

I’ve learned the hard way.

If I start my week faffing about and scrolling through social feeds, the rest of my week will follow in a similar pattern. I end up drifting from one thing to another, reacting to what comes in to my inbox and I start to lose any clarity that I may have had about where it was I was headed.

At the other extreme, I have at times when I started my week with a blaze of energy, jumping into multiple projects and taking action. This may sound great but starting my week like this, I was always in danger of pinging from one thing to the next over the following days, working faster and faster until I hit Friday like a brick wall.

Over the years I have tried out different Monday morning routines, and have worked out what I need to do to keep myself on track each and every week, without over stretching myself yet still achieving what’s important to me and my business goals.

So I thought I would share these with you today to help inspire you into reviewing how you start your week and decide on the two or three key things that have to happen to ensure you remain focused and on track, without drifting through your week or hitting that Friday brick wall.

1) Check in where I am in my energy cycles

Having gone through some pretty horrid years of recovering from burn out and dealing with menopausal symptoms (still ongoing!), I now make sure I track my energy ebbs and flows. I have had to redefine my workflow and understand the patterns that I naturally go through during my menstrual cycle, as well as how I am affected by the seasonal changes, weather patterns, daylight hours and moon phases.

Some parts of my energy cycle I feel clear headed and naturally in flow. In other parts, my body feels stiff, my brain is foggier than usual and I feel myself retreating. I call these our natural Ebb & Flow energy cycles and once you start to become body conscious of them, they are incredibly powerful to help you do your best work.

So at the start of the week, I remind myself where I may be in my menstrual cycle (which has become far more erratic as I approach my menopause), where we are in the moon phase (I have a clock on the wall that tracks this for me and helps me see quickly at a glance) and what the weather may be doing in the week ahead.

If you haven’t done so already, I highly recommend you get a copy of my Energy Tracker which will help you embody this work. I liken it to checking your weather app on your phone and if it says there’s 60% of rain, you’d probably take an umbrella with you if you are going out. You aren’t trying to predict how you are going to feel energetically, but preparing yourself for whether you are more like to experience ebb energy or flow energy.

And if you are interested in how your menstrual cycle in particular affects your productivity, check out this article here: Marketing with your menstrual cycle

2) Overview of my business objectives and intentions for the week ahead

Next I give myself an overview of what is happening short and medium term in my business. I have a Big Vision and a strategy for the year ahead, but for my Monday mornings, I focus on what is due to happen over the next 4 to 6 weeks. I review what I have planned and have scheduled in my diary and then I drill down what needs to happen on one piece of paper.

This “one piece of paper” concept is important. I don’t have running to-do lists that go from week to week (these can distract and overwhelm you if you never seem to get the bottom. Read more about how to-do lists distract you here.) and I actually don’t use any fancy online scheduling tools because of the time it used to take me to maintain all the notifications, priority colour changes, etc. I’ve tried various ones but this way just doesn’t work for me.

My intentions for the week get put down on to one A4 sheet of paper, and that sheet remains on my desk until the end of the week or I have completed them all, whichever happens first. I then decide who needs to do each task or short project on that sheet of paper so I either put my initials next to or the initials of somebody else that it needs to be delegated to. So quite often a lot of the things that go down there have the letter A to it, which stands for Alexia, who is my VA and looks after my client and diary management.

This is often a fairly quick exercise taking no more than half an hour or so, as long as I do this every week. If I’ve been away or haven’t done this for the past few Mondays, it can longer. Sometimes I need a bit warming up, a coffee, sometimes a walk, depending on where I am in my energy flow.

3) Money Management

The next thing I do every Monday morning, is my money management. Often it takes me just 10 or 15 minutes to dive in and get this done. I go into my Xero online bookkeeping system, where I have all my bank account reconciliations to check to see what money is coming in and what money is flowing out. I check what I need to still pay for, and what invoices of mine maybe still outstanding. And I also review my revenue spreadsheet so I know how balanced I am moving towards my financial targets for the year.

This simple process gives me a real grounding about where I am financially in my business. It’s what keeps my eye on my profitability. It makes sure I don’t get carried away with all the dozens of ideas that I’m always coming up with it, to ensure they financially benchmark against where I’m going from the money side of my business.

When I don’t do this, I could go weeks before realising that maybe my cashflow was about to dry up or I was overspending. I would often bury my head in the sand, especially when sales weren’t what they could have been, which meant I didn’t have the right energy when I showed up for my sales conversations. So now this money focus happens every single Monday morning.

4) Weekly team meeting

The fourth thing that I do is I have a zoom conference call with my team, Alexia my Operations Manager, and Melina, my Senior Coach. I didn’t really do this for the first eight or nine years of my business. It didn’t seem necessary when it was just myself and Alexia, who was more of a virtual assistant back then. But this weekly 45 minute call has made a huge difference to how we work together.

If you know me personally, or you have worked with me, you know my brain can work incredibly fast. I’m full of ideas; I’m a very creative and innovative person. And the danger of being this way is that I am always racing ahead and Alexia’s trying to keep up; trying to work out where I’m going, and what’s the latest thing I’m doing.

Our team meeting now grounds our week, gets us all focused on what is happening in our client programme, Momentum, which of our clients may need extra support, as well as what tasks are needed for events or campaigns coming up.

These are the four things I do every Monday. I’d love to know what you do each Monday morning to start your week.

Do you do the same things or do you do things differently?

Or perhaps this has inspired you to put some regular tasks or appointments in your diary every Monday morning.

What’s important is that you have a regular focus to your Monday morning (or it could be Sunday evening if you prefer – whatever works best for you) so that you don’t have to rethink Monday morning every week, and it gets you working on what and where it is you need to focus your time and energy on, rather then just jumping straight into your to-do list and reacting to the week.

Having this approach will give you that focus; reviewing, and possibly resetting your focus to ensure that you know where are in your journey and bigger plans.

If you don’t have this weekly grounding of planning, scheduling, tasking, working out where the money is, and who in your team needs to do what, it’s really easy to go adrift. It’s really easy to get carried away with ideas or get lost in the confusion and drown under information and feel you have too much to do.

So what can you do every Monday morning to start your week?

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

 

 

 

 

The Profitability Sweet Spot: a simple pricing formula to use with your next proposal or programme

The Profitability Sweet Spot: a simple pricing formula to use with your next proposal or programme

The problem with selling services, such as coaching, advice and consulting time, is that it’s very easy to get caught up with how much you ought to be charging. Emotional stories such as “I’m not that worth that much” or “There’s no way my clients will pay that” whip you up into a storm at times, and you can spend days, if not weeks, agonising over the price of your next proposal or new programme.

When you’re selling your time and expertise, you have a low cost of sales, which means you don’t have to spend that much each month to be able to do what it is you that you do. So your prices are often based on how much you feel you can charge.

Although I am a big fan of trusting your intuition in business, emotional feelings are not good commercial indicators, especially if you are working hard to find enough clients each month and you may be coming from a place of worry or anxiety over where your next piece of business is coming from.

What if you could have a simple pricing formula to ensure the prices you charge, give you the income that you want at the end of each month?

There are a number of ways of calculating prices.

Cost based pricing; good for physical products, but not so good for services because of the very low costs involved, particularly if you work virtually and don’t have any office or clinic space.

Value based pricing; typically used for services, but because of the emotional stories, very few service professionals allow them to charge enough and so end up using the next method.

Market based pricing; set your prices based on what everyone else in your market place is doing. The problem with this method is that the only way to ‘win’ at this one is to be the cheapest. Customers will typically use price as the deciding factor when choosing you and you get trapped into having to work harder by having to work with more clients. It’s like putting your next proposal or new programme on Amazon marketplace and just hoping you come out on top of the searches.

There’s a fourth method and that is income based pricing; charge the price that gives you the income you want. And this is what I wanted to demonstrate in this article.

Before I dive in, I have a few caveats.

1) I’m over-simplifying the figures in this article to make it easy for me to share examples. Do you own finance work and costings to make sure it stacks up for your own business.

2) The kinds of businesses that this can work for are usually service providers, such as consultants, coaches, accountants and therapists, because operating costs are usually very low for these kinds of businesses, particularly if you are working virtually and have no office or clinic space.

3) What I am sharing here is not professional accountancy or finance advice. I am not a qualified finance advisor so do seek proper tax and accountancy advice from your own accountant.

4) In my working examples below, I write about monthly revenue. For most businesses, your revenue ebbs and flows. Sometimes people refer to this feast and famine, but in my experience, there is always a natural cycle of a few months of harvest and a month here and there of letting your fields go fallow. So don’t get hung up on the fact that a monthly income needs to be consistent to be successful, because consistent income is one of those holy grails that marketers sell you, but isn’t always easily achievable! It’s how you manage your manage your money during the harvest months that allow you enjoy the fallow months that matters.

How you may be using your income reports right now

For most people, you hire an accountant or bookkeeper to keep track of your finances, and at the end of each year, your accountant hands you your end of year accounts. This is when you find out exactly how profitable you were over the last year, how much tax you now need to pay and how much you’ve actually earned.

There are two problems to this approach. One, you may end up being very disappointed by the final figures, wondering where all your money went after working hard all year. If you’ve not been on top of your finances during the year, this is also where you may find that you’ve not put aside enough tax. This happened to me in my early years; it’s not a nice feeling!

Two, your tax returns and company accounts aren’t really designed for your business use. Tax returns and statutory accounts are legal requirements to let the Inland Revenue know how much tax you have to pay. As day-to-day tools to help you manage your business, they are pretty useless. Some business owners will have accountants who help them with management accounts each month, but for most, they are still too clunky to be use them to help decide on what their pricing ought to be.

You need a simple pricing formula that you can use to quickly and easily price up proposals and programmes.

The Profitability Sweet Spot

If you are like most service based business owners, there’s every chance that you allow yourself to think that whatever you charge your clients, is what you get as income, minus a few expenses and a little bit of tax.

Thus if you charge a client £1000, you may think in your head that your income is about £900, give or take. If you have been trading for several years, this may be why you feel deflated at the end of each year when your accountant hands you your tax returns, and you realise you ended up making very little money. This can often trigger those thoughts that you aren’t working hard enough and thus you keep on the crazy ‘work harder’ hamster wheel.

Here’s how I look at a business’ finances, and how I use them to help them with my pricing.

There are four main areas that your revenue needs to go towards, apart from your personal income; tax, running costs, business growth and personal development.

Let’s go through each one.

  • 20% Tax. You only pay tax on your profits, rather than revenue, and there are different tax rates depending on your overall income, including personal tax and corporation tax, if you are a limited company. This is why I make the caveat above about over-simplifying. I am not a tax accountant and nor do I want to be working out my own tax each year. But I do want to include a percentage of tax in my pricing to ensure I am being paid the money I want in my personal bank account. 20% is often slightly higher than it needs to be, but I always work to have more money in my tax account rather than risk having a short fall and not being able to pay my tax on time. Anything extra left in my tax account after I’ve paid my taxes I see as a great way of saving, so it’s a win win in my opinion.
  • 10% running costs. Of course, this is going to vary depending on your business, which is why you have to get clear on exactly what you spend each month. But over the years of working with many consultants and service businesses, this figure is a good average to work from to get started. This percentage needs to cover everything from internet services and website hosting, to admin support and insurance.
  • 5% business growth. Your business needs income, too. You may need ad hoc technical support, or need to invest in a new website, images or brochure design. Having this percentage ensures you have the cash to build up a buffer to pay for what you need, when you need it. Too often small businesses like yours struggle to invest, particularly as they start to scale up and grow, because they are trying to pay for things like new websites or branding out of cash that month, and that’s never easy to do.
  • 5% personal development. Investing in yourself is critical as a business owner. Yes, this may cover the obvious such as coaching or mentoring, but you may also want to invest in CPD training or keep yourself up to date with the latest industry trends or attend a conference. Again, like business growth, people often try to pay for these things out of cash that month and if you struggle to have enough money, you forgo what is needed to develop yourself, both personally and professionally.

So the profitability sweet spot becomes 60%, which means for every £600 you want to earn, you need to sell £1000 to get that income.

Or let’s put it another way, for every £1,000 you sell, your true income is just £600. How does this make you think about your prices?

Now that you know you need 40% of everything you sell to go towards tax, running costs, business growth and personal development, can see why you have to charge better than most of your competitors.

Let me give you some working examples.

Example #1 Freelancer wants an income of £2,000 a month so needs to sell £40,000 of services a year

20% Tax: £8,000
10% Running Costs: £4,000
5% Business Growth: £2,000
5% Personal Development: £2,000
60% Personal Income (Profitability): £24,000

To sell £40,000 of services in the year, your monthly revenue needs to be £3,300. And if you work with five clients during the month, they each need to be spending £660 with you each month.  Thus, £40,000 divided by 12 months = £3,300 divided by 5 clients = £660

Example #2 Consultant wants an income of £6,000 a month so needs to sell £120,000 of services a year

20% Tax: £24,000
10% Running Costs: £12,000
5% Business Growth: £6,000
5% Personal Development: £6,000
60% Personal Income (Profitability): £72,000

To sell £120,000 of services in the year, your monthly revenue needs to be £10,000. How this breaks down per client will depend on your business model but if you are predominately working with as a consultant, then this may look like five clients a month need to spend £2,000 a month with you.

If you sell group programmes, then maybe you need to be selling ten places at £1,000 a month. Or if you sell longer term contracts, such as training or consulting, then that may be ten clients over the year that all need to spend a minimum of £12,000 each.

What will typically happen with a business this size is that you will have a few different revenue streams, and your revenue will often ebb and flow over the year, as highlighted above in my caveats. But it never needs to be complicated.

If you struggle working this through with a business this size, then reach out to me. I do this work with my clients all the time so it’s easy for me to show you what your revenue model could look like with the right prices in place.

What if you are running at a higher profitability than 60%

What if you are genuinely paying yourself far more than 60% of your revenue each year? If it’s working for you, then great. You don’t have to be putting aside 5% for business growth and 5% for personal development, for example. And you may find your running costs are less than 5% over the year.

But there are two profitability danger spots you need to look out for.

Swinging into 80% or more

If you are swinging towards 80% profitability and above, and earning £800 for every £1,000 you sell, then there is a danger of your business being under-invested and under-resourced.

In the short-term, this may work. Enjoy the fruits of your labour!

But long-term, you may find yourself burning out, particularly if you are in the higher revenue bracket as seen in example #2. If you run a business with a revenue of £100,000 and more, then there is every chance you need a good operations person, and perhaps even start looking at hiring associates if you are in high growth phase, so it may mean you aren’t spending enough to give you the team, processes and systems to support you in your work.

You are working hard at doing everything yourself, and although this can work in the short term, over many months and years, your health and wellbeing is going to suffer trying to keep up with delivery work, as well as what it takes to sell and support you and your clients.

Swinging into 40% or less

If you are swinging towards the 40% profitability and lower, and earning less than £400 for every £1,000 you sell, then there is a danger of your business being over-invested and under-resourced.

In the short-term, this may be necessary; you may be going through an intense period of growth and hiring new members of your team whilst the revenues go up. Hang in there if this is the case, and stay strong with your vision.

But long-term, you may find yourself over-spending and if there is one guaranteed way of a business going under is a lack of cash.

One area I often see being over-spent is personal development; high priced coaching programmes and getting sucked into big marketing programmes can often put a business owner into a cash flow crisis, especially if you are using a credit card to finance.

The other area is hiring too many people, especially if you have decided to run a big launch or you are developing the digital marketing side of your business. You want to have a tight rein on your finances and ensure that whoever you are hiring have clear ROI targets and know what is expected of them.

So watch out for these two swings in both directions. Over the many years of working with consultants, agencies and service professionals, the sweet spot for your personal income happens around 60%, whilst ensuring 40% of whatever you sell goes into your tax, running costs, business growth and personal development pots.

How does this help with your pricing decisions? Let me know what you put into place and how this impacts your business.

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

Why health is the number one investment in your business

Why health is the number one investment in your business

Fatigue, stress and hormone imbalances have become serious problems for many business owners, particularly those of us in our 40’s, 50’s and beyond. And it’s caused many to pull back and play small to protect themselves. When we feel exhausted, we can talk ourselves out of plans we feel we don’t have the capacity, confidence or courage to take action on. But this fatigue and fear of not having enough energy is costing us dearly, and over the years I have come to see that our health is the number one investment we need to make in our businesses.

I’ve experienced fatigue over the years and I know only too well how frustrating and costly this exhaustion can be.

I’ve been frustrated and, at times, incredibly angry about how crap I’ve felt as I’ve gone through my midlife changes and there have been long periods of my business when I’ve pulled back and not done the things I wanted to do. When have the right conditions to fuel our vitality, growing profitable, sustainable and scalable businesses is much easier. But in order to do this, we have to understand and know how to work with, rather than against, our own cycles and flow, as well as the cycles and flow of our business, the economy and the planet we live on.

My fatigue began in my late 30’s. I was in full Superwoman mode; mother to two young children and running a successful term-time online coaching business. Then my Dad got sick. After 18 months of going through three rounds of seriously intensive chemo, he died of Lymphoma in the summer of 2010. My parents lived in Devon at the time. Me in Surrey. So I spent the best part of two years driving up and down the A303, sometimes back and forth in one day. It was no surprise that my shoulders seem stuck to my ears from all the driving, and I had consistent chronic neck pain.

My life seemed to take on a black comedy as, if that wasn’t enough to deal with, I had been convinced to take on a 9 month rescue dog because the family wanted a pet. The autumn of that same year of my Dad dying, he got run over by a truck. £6,500 worth of vet bills and reconstructive leg surgery later I was left looking after a lame dog, whilst dealing with our family grief. I tried counselling but one session was enough for me to decide I didn’t have time to let all this grief out so I zipped it all in. And in January 2011, I went headlong back into making my business work again.

I re-designed my business to get away from the constant launching of digital programmes and closed down a membership site product. I knew I didn’t have the capacity or the inclination to spend my time learning and keeping up with the latest digital tactics that I was teaching. And I missed direct contact with clients, being involved with their decision making and simplifying their marketing systems.

My business moved into a one-to-many model and I launched my first group coaching programme in June 2011, The GID Marketing School, which is still offered today as a foundation course for our Momentum business growth programme.

All the changes I was making to my business was working on paper. I was certainly doing less, having more fun and making more money than before. The problem was that I was still in Superwoman; that same driving force I had back in my 30’s was being used in my 40’s. And let’s not forget the trauma of losing my Dad I had buried deep inside of me.

In the summer of 2012 I hit the proverbial wall. I simply couldn’t get out of bed one weekend. I realised that this tiredness I was feeling wasn’t going to be fixed by a few early nights. I would like to be able to give you a happy ending, but unfortunately, my exhaustion confused and depressed me. My GP told me I was fine and that all women my age go through this kind of symptoms and as my blood tests all came back normal she simply suggested I take some iron tablets.

I conveniently blamed my physical state on peri-menopause which gave me permission to believe that all women went through this so just get through it and by the time I’m 52, all will be well. Ha! My saving grace finally came from finding a community called One of Many in 2017 and it was through some deep personal development work that I began to feel alive again and take back control off my physical and mental health issues.

What I’ve come to deeply understand through my fatigue journey is that you can look to others for inspiration on what makes a business work, have the best product funnel set up and following the latest surefire, tried-and-tested marketing system … but if you don’t find the ways to create the right conditions to fuel your vitality whilst you go about growing your business, you’re in danger of boom-and-bust and crashing your body.

That’s entrepreneurial burnout. And it’s rife right now. But it’s not doom and gloom.

The reason I wanted to share my story is to inspire you that there is life, vitality and the full force of creativity on the other side. That once you make the decision to invest in your health and wellbeing for the sake of your business, you will experience it for yourself why it needs to be the number one investment to make before you look at any growth opportunities.

Once my fatigue was under control, my business began to blossom once again and through my teachings around True Profit Business and the work we do with our Momentum members, I feel I am doing my best work yet. Yes, I have invested in systems, processes and my team but it wasn’t until I began to take my health seriously that I experienced the shift in my own business growth.

I still have to manage my health and wellbeing and yes, I do have set backs as I get tempted with bread and cakes, and eating too much sugar. But I stay alert and tuned in to my body because I know, if I want to do the work that I want to do, I have to make sure I have the right rhythms and rituals in place to support my health.

It’s why we now have Health & Wellbeing as one of the five steps in our Grow Strong™ planning process in Momentum; it’s the foundation that each 90 day plan is built up from so that each of our members are clear on what rituals and rhythms they need to support their growth.

So along with their sales targets for the next cycle, they have to submit what they are doing to move, as well as nourish their mind, body and spirits.

What to do if you feel you need prioritise health as your next business investment

Perhaps you’ve hit the wall like me back in 2012 and you’re staring at this screen frustrated that your brain fog is so thick you can’t think straight. Perhaps you’ve not hit that wall yet, but you recognise the tiredness is affecting how you think about your business and you’re perhaps pulling yourself back on plans you previously had. Wherever you are at with your current health, if you feel you need prioritise your health, here are some of the things I did to start taking some control back of my energy levels.

1. Recognise you have a health problem

The sooner you stop kidding yourself that everyone else is tired and this is just the way of the world, the sooner you can start helping yourself recover. Start with your GP. And yes, I know from experience, that many GPs are just not equipped to understand and investigate fatigue illnesses or hormonal changes so it can take months, if not years to get the medical help that you need. And you may have to go private if you can afford to pay the fees. I’ve found that hormone testing is best done privately because you’ll simply get better results. If you’re interested in speaking to someone, then I can recommend Nicki Williams from www.happyhormonesforlife.com

But don’t get ahead of yourself and make this a bigger problem than it needs to be. One visit to the GP and a blood test later and you may find you have a real simple medical treatment to follow. The reality is that there’s every chance you’ll have to be making some serious lifestyle changes – what you eat, drink and how you exercise and move – but start somewhere and your GP will hopefully be the place for that.

2. Ask for help and explore your options

I know from experience that fatigue causes confusion, brain fog and decreases your ability to make decisions so you need to ask for help. I battled with this for years. I thought I could fix it all by myself with Google searches and a few books on menopause. But it wasn’t until I started getting recommendations for health practitioners such as kinesiologists and acupuncturists that I started to realise that my fatigue had a shed load of trauma and grief blocked behind it. It wasn’t pretty, that’s for sure, but shifting this blocked energy helped me tremendously to get my physical health back on track.

Explore your options, speak to friends or family members, try out treatments recommended to you and you may surprise yourself with what works for you.

3. Is your business model right?

As the pace of our living gets faster and social media feeds us a stylised version of what business success looks like, we seem to be obsessed by how to get more done in less time. And when we’re not sure exactly what needs to be done, rather than look to our vision and business strategy for answers, we buy into the next “should-be” marketing tactic, funnel or success formula that promises us results but simply distracts us by never-ending to-do lists.

It’s easy to see how a lot of people get trapped by building the wrong business model and end up selling and delivering the wrong products and programmes that only drain them of their energy. It’s why one person’s success formula won’t necessarily work for another.

The more time we spend understanding ourselves and how we work, the easier it becomes to build a business that fuels us. Personality profiling tools such as Talent Dynamics are a really quick and easy way of starting this process and other tools such as Motivational Maps can help us understand what makes us tick. Think of it like packing for a holiday; if you were going on a beach holiday, you wouldn’t be taking your ski jackets with you. It’s the same for your business. If being in front of screens all day drains you, is a digital business really right for you … even though you’ve been told by many experts that passive income is the way to go?

Build a business model that’s right for your being, your values, how your energy flows and the money you need to make the choices of how you spend your time.

4. Know that energy flows and needs replenishing

I have learnt that we have many energy states that we have access to help us thrive and rise to our full potential. Energy isn’t static; you can’t keep it topped up and have it stay there. Nor is to be treated like a credit card; think you can go full pelt for a few weeks and then catch up with sleep at the weekends.

Energy flows in cycles and to help my clients experience how to work with this flow, I teach three different energies to use when they are growing a business: Lean In, Lean Back, Ground.

Giving energy flow form can help you keep going forward with your business growth plans, but without the drive and push energy that can burn us out. When you know which energy to use for different tasks such as visioning, planning and implementing, you’re able to make better decisions and find a simpler flow to working during your week.

If feeling energy flow is new to you, then I recommend you first start tracking your energy cycles and flow that happen throughout the day, week and month. It can be hard to do if you are particularly fatigued so it may be that you need to action steps 1 and 2 first before you try this. But what you will find is that some tasks you do in your business light you up and some suck you down. At some points of the day you feel alive and at other times you may just want to crawl back under your duvet. For women, your monthly cycles have a direct impact on our energy so if you haven’t done so already, starting tracking these immediately.

I’m no bean eating, juicing goddess!

If you know me, you’ll know I’m certainly not some bean-eating, juicing goddess who gets up every morning and starts her day with yoga and meditation. I’ve tried but it’s simply not me. If that is your thing, great …. but you may be pleased to know you don’t need to be all zen in order to create zen in your life.

What I do know is that without creating the space in your week to work on your vitality, the vision we have for our business just doesn’t happen. And this is what I want to help you stop from happening. Because when you are exhausted, you pull yourself back; you will talk yourself out of plans you feel you don’t have the capacity, confidence or courage to take action on.

If you want to discuss this with me and what you can do to redirect yourself and your business, get in touch or book in for a 30 minute zoom call. I’d love to help if I can.

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

 

 

 

 

Wintering in a heatwave

Wintering in a heatwave

The heat has been vicious here over the past few days. Having been a teenage sun worshipper, I have now become a version of Patsy; floating around the house in my beach kaftan, sighing, “I like it hot, but not this hot.”

To make matters a little hotter, we are having an extension built.

The back out of our house is boarded up, blocking any form of breeze able to drift through. And with both front and back gardens full of cement boards, diggers and skips, there is no chance of finding a shady corner outside, either.

So this weekend, I found myself dragging a chair into our hallway to sit in front of the open front door, and gave myself permission to do nothing but read for two days.

The book I found myself immersed in for the whole weekend was Wintering; a story of how the author, Katherine May, learned to flourish when, as she calls it, life becomes frozen.

And yes, the irony of reading Wintering in the middle of a heatwave was not lost in me. 

As it turned out, it was the perfect book to read.

A client recommended it to me after we spent time together working through how she could build a business, without having to jeopardise her health. Our discussion took a deep dive into how important rest was. Together, we worked out how to develop a work rhythm that would allow her to sell enough to meet her money goals while avoiding the need to fight hard to keep up with it.

It seems to be me that rest is something that very few people feel good about taking. 

Over the past decade, our society has sped up to allow us to buy anything, chat to anyone, post online anywhere, 24 hours a day. Our patience to wait for things is no longer needed, which has no doubt impacted on the fact that patience with ourselves has been pushed aside, too.

I live in a country that not only has vast changes to our daylight hours throughout the year, from 16 hours in the summer to less than 8 hours in the winter but is also buffetted from our island’s ever-changing weather patterns. 

In a matter of days, we can go from clicking on our central heating system in the middle of June to wondering how much it would cost to run air conditioning for the few nights of the year that seem to cook us from the inside out. (Nothing like a slow roast when you are going through the menopause!) 

And yet it seems that us Brits do our best to homogenise our work patterns so that we can still go at it hard no matter how many hours of daylight we get in a day; no matter what the season is; no matter how tired we feel or what in life we are dealing with. 

We are conditioned to keep working at a pace because going slow would be wrong, yes? 

I fought rest for a long time.

I had images of laying on the sofa, watching TV and eating wotsits. What a waste of my time! I couldn’t possibly allow myself to do nothing. That would be so unproductive.

Rest was for sick people; people who were signed off by their doctor and needed to recover from a severe illness. Rest wasn’t for someone like me, who had things to achieve and goals to reach.

But over the years of learning how to slow down and let go of my over-achiever self, I have realised how powerful rest is. So when I got my hands on my Katherine May’s book, Wintering, I couldn’t put it down. I read it from cover to cover.

Not only does she tell her own story of recovery, but she also interlaces it with interviews and research of the power of winter; that point in your year where you shift down a few gears, rest and sleep more.

She writes “Transformation is the business of winter…  a cyclical metaphor for life, one in which the energies of spring can arrive again and again and again, nurtured by the deep retreat of winter. We are no longer accustomed to thinking in this way. We are instead in the habit of imagining our lives to be linear; a long march from birth to death in which we mass our powers, only to surrender them again, all while slowly losing our youthful beauty. This is a brutal untruth. Life meanders like a path through the woods. We have seasons when the leaves fall from us, revealing our bare bones. Given time, they grow again.”

Let’s face it. You’ve had your from-hell-and-back moments, haven’t you? 

The older and wiser we get, the more travelled our paths become. Whether you’ve lost a parent or a child; recovered from illness or an accident; dealt with bully bosses or redundancy; closed down a business or declared bankruptcy; had a divorce or broken heart; everyone has one, if not several, periods of life where you are put under extreme stress.

And as you grow older and you experience changes in your hormones and body, stress is often harder to deal with. Without real rest and recovery time, it layers upon previous stressful times until you find that you can no longer cope. 

And yes, your body has a way of making you stop if it needs you to!

How many of us have allowed us to truly winter?

To believe that resting and taking time out will allow your creativity and impact to form? Because, after all, Wintering doesn’t just happen in the winter season. Resting can happen at any time you need it. And often resting needs to occur BEFORE you think you need it. 

In Katherine’s concluding chapter, she writes “To get better at wintering, we need to address our very notion of time. We tend to imagine that our lives are linear, but they are in fact, cyclical. I would not, of course, seek to deny that we grow gradually older, but while doing so, we pass through phases of good health and ill, or optimism and deep doubt, or freedom and constraint.”

This is my hope for us all at this crucial point of 2020. 

As I write this, it is the middle of August, traditionally the month of holidays before we gear back up for the back-to-school busy-ness of September. Whether you have school-age children or not, we were all school-age children once upon a time so this energy of a new academic year is often inbuilt into many of us.

But the danger is that we, as a society, haven’t really and truly rested. Yes, we’ve had enforced lockdown and haven’t been allowed to go anywhere for weeks and weeks. But very few people seem to have really and truly found the time and space to process what has happened over the past few months. 

And let’s be clear, we have all been through catalytic changes to the way that we live and work. The levels of anxiety bubbling through our communities are running high, with many on alert, waiting for the latest breaking news to ping through on their phones. Not one person has been unaffected by what has happened this year.

It feels to me that the more we can allow ourselves time for a good wintering, the more chance we have to flourish and become our potential, rather than chase a version of ourselves born out of busy-ness.

Rest is not just for people who need to recover from an illness. Rest is a critical stage of our cycle of growth, both for ourselves as people and for our businesses. 

Rest doesn’t have to be sitting on a sofa, binge-watching the latest box set (although it could be). It doesn’t have to be sleeping all day (although it could be). Rest doesn’t have to be isolated time to yourself (although it often is). 

Rest can be your version of how you shift down your gears and take the time and space to breathe; to review and reflect; to ignore your phone and forget about what time it is.

Rest can be for an hour, for a day, even a whole month or longer.

Rest can be the opportunity to feel into your power; to ground your energy; to connect with who you are, where you can impact and what is it you desire.

Whatever version your rest becomes, one thing I know for sure is that rest has got to happen BEFORE you think you need it.

Who’s up for a bit of wintering in a heatwave? 

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

 

 

Books Referenced:

Wintering by Katherine May

 

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