Profits - Quantum Scaling℠

Maximizing Business Growth for Long-Term Success

by Peggy Niles

Building a profitable and sustainable business in the service industry goes beyond just getting more clients and cutting costs; it’s about making your money work strategically to achieve growth and scalability. Here’s a fresh perspective on how seasoned business owners can plant the right seeds for success:

1. Strategic Marketing Investments:

Instead of merely spending money on advertising and marketing, it's crucial to ensure that these dollars are working effectively for your business. Consider the culture within your company – does your message reflect your values and the tangible and intangible benefits your customers receive? Consider collaborating with marketing partners who align with your business model, track analytics to identify successful platforms, and tailor your message to attract your ideal clients. This approach ensures that your marketing efforts contribute significantly to your top-line revenue.

Imagine Joe, a local coffee shop owner who spent a chunk on marketing but didn't see the coffee lovers pouring in. Turns out, his message wasn't shouting out the cozy, community vibe his café was all about. After teaming up with a marketing crew that got his vision, tweaking his message, and tracking the results, Joe found his shop buzzing with customers who loved the vibe. It's not just about ads; it's about making sure they sing your business tune.

2. Technology as a Growth Enabler

Technology costs should be viewed as investments that can impact both the top and bottom lines. Choose applications and software that align with your business needs, rather than adopting solutions based on generic recommendations. Test tools during trial periods, explore all their nooks and crannies, and don't be shy about using them to the max. Tech should work for you, not the other way around. Take the time to explore the full capabilities of the software you invest in, as many businesses underutilize tools due to unawareness. Avoid the common mistake of purchasing multiple applications for different purposes when consolidated solutions exist at a lower cost. Strategic technology choices can be instrumental in scaling your business effectively.

Take Sarah for instance, a tech-challenged entrepreneur who bought an app because a friend of a friend said it worked wonders. Turns out, it didn't quite fit her business needs. When Sarah explored other options during a trial period, she stumbled upon a tool that not only saved her money but also streamlined her operations. Now, she wonders why she ever struggled with tech. It's not just about having apps; it's about having the right ones (and using them correctly) that make your business life easier.

3. Strategic Planning for Long-Term Success

Incorporate strategic planning into your business approach to anticipate future needs, analyze resources, and identify when your company may outgrow its current systems. By adding a strategic layer to your business operations, you empower yourself to proactively address challenges and seize opportunities, ensuring long-term success and growth.

Picture Mike, a growing consultancy owner who hit a wall when his systems couldn't keep up. With some strategic planning, Mike anticipated the growth, upgraded his resources, and smoothly transitioned to a more robust system. Now, his consultancy is handling more clients without breaking a sweat. It's not just about today; it's about getting ready for the business of tomorrow.

In a nutshell, the focus should not solely be on cutting costs but on making intentional and strategic investments that contribute to the overall health and expansion of your business. By understanding the impact of your spending and aligning it with your goals, you can position your company for sustained success in any competitive industry.

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What’s the Thing with Cash?

by Peggy Niles

I always hear people talk about what they would do with the million/multi-million dollars if they had it, but they talk as if it’s a pipe dream. Rarely do I hear how they will go about getting it or what’s stopping them from breaking through that glass ceiling. In fact, I’ll go out on a limb and say people that talk publicly about their cash or investments are just like those who post “the perfect lives” on social media.

Do you ever get the feeling that perhaps everyone is a little afraid of cash? Perhaps it’s the lack of having it that’s the problem or maybe it’s the comparative environment it creates. There is something about it that makes it such a sensitive topic.

Some think it alienates friendships or worry about how it will change them. I challenge those arguments and here’s why: “If you’re in business, aren’t you in business to make money?” Yeah, some may jump all over this with responses that “there’s more to business than money” and “I want to make an impact” and “I want to serve _____________”. All good arguments, yes, BUT 1) if you’re not in business to make money, why don’t you have a non-profit or charitable organization instead of a for-profit business and 2) wouldn’t you be able to make more impact or serve more if you had more money? Ultimately, you want more money so you can accomplish more, give more.

What’s that old saying “Cash is King”?

Cash flow is such a vital thing when you’re running a business and yet little time is spent truly managing it, especially in small-to-midsize businesses. That being said, you can’t only focus on the top line sales but have to also focus on maximizing the bottom line profits. This is what will allow you to reinvest in both your business and yourself, as well as allow you to donate to your causes.

One of the problems that exist is making judgment calls and decisions based merely on the cash balance in the bank. That, combined with the fact that the decisions are made on an “as needed, in the moment” call, can create a lot of rockiness and uncertainty for the business and the business owner.

Consider this for a moment. Let’s assume you’re a sports fan; I personally like ice hockey. You’re a huge fan, but your city’s team frustrates you because they continually play a defensive game and their offense never tries to score. Do you think they’re going to win? Do you think they’ll have any chance of advancing to the playoffs if the other teams have an offensive game?

So what’s the difference between the team that plays defensively and the team that plays offensively? The defense is in “reactive” mode, but the offense is in “proactive” mode. We can compare this to those who just operate on the bank cash balance (defensive team) to those that manage their cash flow and don’t hesitate to discuss it (offensive team).

So how do we alleviate this problem?

Here are 3 tips:

Get over the old school “don’t discuss cash” issues; don’t look at cash as a comparison trap or status symbol, but a tool for you to be successful and advance your company to the next level.
Create a way to have necessary financial information at your fingertips on a regular basis.
Use the data to make key decisions and plan accordingly by anticipating your needs and resources so you get ahead of the game.

Don’t Let Your Numbers Slip Away

by Peggy Niles

Know your numbers! This is one of the top five rules in business, if not the first, and yet so many business owners and CEOs are unaware of their numbers. A large percentage of businesses operate from the cash balance in their bank account or wait until they have to give their accountant their financial statements after the year ends to do their tax return. Some have their numbers available but they’re looking at the wrong ones, if they’re looking at them at all. Much of this comes from the unknown, fear of what they’ll see, or a lack of understanding.

The problem is, when you don’t know your numbers at all times, you’re most likely not only losing money, but also opportunities!

One might misinterpret knowing your numbers as knowing your sales, but that’s not the case. Just because you have sales coming in the door doesn’t mean you’re making profits. If one of the reasons you’re in business is to make money, and I believe it has to be, then you need to make sure you’re operating at the highest profit you can so you need to know more than your top line sales figures.

Knowing your numbers identifies things you should be focusing on to improve your business, it creates accountability for both you and your team, and it leads to growth for your company.

Have you ever tried to obtain a loan or recruit an investor into your business? I can guarantee if you don’t know your numbers they won’t even talk to you. Numbers don’t lie! A savvy business person can see where the strengths and weaknesses are within your company when they review your numbers. You want to know these numbers and understand the story they’re telling.

Some of the numbers you want to know include:

The client/customer acquisition cost: How much does it cost you to get a client or customer? This number should include the direct marketing costs (design, ad placement, tools, etc), the employee/contractor cost for time spent, hidden costs of freebies, etc.

Profit Margins: An example is your gross profit margins, e.g. the percentage of profit made on your product or service / your gross sales figure for that product or service. Using a restaurant as an example you want to understand the costs of the ingredients going into each dish you serve in order to calculate the profit margin made on that particular dish.

Overhead Expenses: Don’t only look at how much you’re spending, but what you’re spending your money on and if the expenses are working for you.

Client/Customer Lifetime Value: How long does a client or customer stay with you? Over that time, how much can you expect to earn from them? Here’s an easy formula for calculating this number:

(Average value of a sale) x (Number of Repeat Sales) x (Average Retention Time in Months or Years)

It’s all a numbers game so do you know your numbers? Do you understand what they mean? Don’t go it alone; get some support to create the business and cash strategies to get what you want out of your business. This combined with getting clarity on where you really want to go and building the roadmap to get there will create your company’s ultimate success.

Are you ready to get off the hamster wheel and eliminate the overwhelm? Get your free breakthrough session today and learn how you can 3x your profits.

Peggy Niles

IT’S ABOUT PLANTING THE RIGHT SEEDS

by Peggy Niles

Part of building a profitable company with sustainable growth means being more cost conscious. Wait – DON’T STOP READING….I’m not talking about cutting costs! I’m talking about being more aware of how your costs are effecting the bottom line and the top line.

Here are a couple of examples:

Every business should be spending money on their advertising and marketing if they want to continue to bring clients and customers in. The important thing is to make sure the advertising and marketing dollars are actually working for you.

There is a certain culture within your company, a culture that represents you and your team; does your message show that culture? Does your message relay the true result – tangible and intangible – that your customers receive? Does your message relay what you truly offer, what you truly believe, and what your business model truly is? If not, your spend dollars won’t work as well for you because it won’t lead your best clients and customers to you, and therefore your top line revenue may not be as high as it could be.

Who are you using for your advertising and marketing? Are they creating material around you and your business model or are they forcing your message around their marketing model? Do you track and analyze the analytics to see which platforms are bringing in the clients and customers you want? If not, you’re decreasing your bottom line and throwing money into the wind.

Another great example is technology costs. There are applications and software programs that can add to your top line and to your bottom line. Are you sure you’re using the right ones for your business? Again, this answer depends on your business and your team. Your company may have chosen an application because it was referred to someone on your team by a friend or business acquaintance, but it may have been a general recommendation based on that person’s use, not specific to how it fits into yours. There might be another tool more specific to your needs so make sure you do your research and testing. Quite often there are trial periods for such tools – make sure to use those trials…actually use the tool during the trial on a daily basis so you can test its application to your needs.

Are you using the application or software to its fullest extent? Many clients of mine have had software that they are not utilizing to its fully capacity; in other words it has other capabilities that can be used but isn’t. Honestly, part of it may be laziness on the part of the user, but usually it’s unawareness so do your homework or it’s wasted $$$$s.

Another mistake has often been when more than one application is purchased for different uses when there are applications out there that do the same thing in just one program for less money. It’s all about not rushing into the purchase because of an immediate need.

Technology can be a strong tool in scaling your business so it is well worth the time and money to choose the right programs for your business.

When you add strategy to your business, you can anticipate your needs, analyze your resources, and know when your company will be outgrowing its current systems so you can prepare appropriately.

Peggy Niles, CPA

Strategic Scaling Solutions – We help companies scale without losing control

Category: <span>Profits</span>