The Time to Review Your Business is Now!

While walking past a group of elephants,  a man noticed that they weren’t being kept in cages or held by the use of chains.  All that was holding them back from escaping the camp, was a small piece of rope tied to one of their legs.  He was  confused as to why the elephants didn’t just use their strength to break the rope and escape the camp.

He asked a trainer nearby why the elephants were just standing there and never tried to escape.

The trainer replied:  “When they are very young and much smaller, we used the same size rope to tie them and, at that age, it’s enough to hold them. As they grow up, they are conditioned to believe they cannot break away. They believe the rope can still hold them, so they never try to break free.”

The only reason that the elephants weren’t breaking free and escaping from the camp was that over time they adopted the belief that it just wasn’t possible. Perhaps they tried when they were younger and smaller but failed.  That failure created the belief that they couldn’t succeed.

So why am I telling you this story?

Simply because many of us are like these elephants.  How many times have we believed that we are “stuck right where we are?”   Perhaps we had dreams and goals for our business that didn’t work out so we believed that we could never grow beyond what we already were.  We can’t see beyond our mindset, to envision a different outcome or possibility.  So, why take a risk and try to have a more successful business when we might fail? .

But whether you’re leaving behind a busy holiday season or are on the threshold of a new business, I’m here to convince you that the New Year is the perfect time to let your dreams soar and believe that you can achieve them.

So where do you begin?

You may suspect that I’m going to tell you that this is the time you need to dig out that business plan or, if you don’t have one, start making one.  Far from it.  Instead, let’s go back to the beginning and, in your mind, revisit the reasons that you started this business in the first place.

I’ve learned, through my own personal experience and as a small-business counselor, that knowing how to set goals and objectives and even the ability to create a technically perfect business plan is not enough.

Like New Year’s resolutions, goals alone have little or no meaning and are soon tossed by the wayside and forgotten if they are not grounded in the heart and the passion that you feel about your business.  You can set all the goals you want and create the best possible business plan and still be a failure.  But if you have a purpose for what you are doing and feel strongly about it, success will follow.

I suggest that you dig deep inside yourself and try to determine what is really important to you — not just in a business sense — but what you feel passionate about.

What was your purpose when you started this business?  Have other changes in your life affected that purpose to the point that it is no longer viable?  What is your purpose in life and how does that purpose relate to your business?

Our business doesn’t stand alone.  It’s a part of us.  It’s like a big circle that begins and ends with us while including every phase of our life — family, business, social, and more.

Our business is us and we are our business.

Each of us has own deep-rooted reasons for being in business.  Some of you want to be able to stay home with your children; others are in it to make as much money as possible; and others just feel “called” to it.  Some go into it for the challenge.  There are those who think it will be a fun and easy way to make money.  There are probably as many different reasons as there are individuals.

In my case, the kids were grown and I didn’t want to spend my days having lunch with the ladies and volunteering.  It was now time for “me” to follow my dreams and become more than just an extension of my husband and children.  My journey began with publishing a statewide newspaper, evolved into selling real estate, then developed into a local gift basket business which mushroomed into what it is today.

Only when you understand what your own unique purpose is can you build an effective plan to achieve that purpose.  That is why writing a business plan seems so difficult and why no one else can write one for you.  The books give you the technical format but
only you can individualize it for your own inner self.

Once you know what your purpose is, it’s much easier to determine the nature of your business, your growth potential, and your market.  The marketing, management and financial areas of your plan evolve naturally from these decisions.

Just as we change and grow, so should our business and the plan that describes it.  We learn not only from our own mistakes and triumphs but from hearing about those made by others.  As we try new and different ideas, we discover that what works for someone in another city may not work for us.  For this reason, it’s good to critique our past year’s work and plan for the next, always keeping our purpose for being in business in mind.  Learn to trust yourself and your own judgment.

You will even discover that your reason for being in business will change through the years.  Children grow up, marriages die, fun becomes work, and businesses succeed beyond our expectations.  As a result, your reason for being in business, and even your passion for being, may change as well.

Your business should evolve as you do.  When the children are older, you may discover that networking and personal presentations are more important than direct mail in the growth of your business.  Unexpected business growth and success can bring a need for change as well.  You may find the need for employees, business management software, a larger work area, or a desire to develop a different niche or service.  As your business changes and grows, you will probably dream bigger dreams and hopefully accept the new challenges that go along with those dreams.

But as your business grows, it is all too easy to get so caught up in it that it becomes an obsession.

Instead of the business being you, you become the business.  Your social life, your family and your health are suddenly squeezed to death.  You don’t want to let go of any small part of the business.  You consider yourself to be responsible for every little thing.  Sound familiar?  If anything will kill passion and result in burnout, this will do it for sure!  If this is you, the New Year is a perfect time to revisit your reason for being in business and determine what you can and should do to rekindle the passion.

It’s all too easy to become comfortable with our habits, our designs, our marketing, or our methods of doing things.  What’s wrong with that? you may ask. If it works, why change it?

The reason is easy–
Passion and habit do not make good bedfellows. 

As you become a business creature of habit, you’ll discover that things are perhaps easier but your creativity and passion has withered.  Your courage to try new things and discover new ideas and products has slowly died.  Then suddenly a huge risky
opportunity emerges or a major change in your business situation or personal life occurs.  It’s at that time when you’ll find the change or opportunity difficult to handle because you’ve traded courage, change and creativity for habit and comfort.

Remember, however, as you revisit the reasons you started your business and think about how to refocus and renew it in order to rekindle the passion that you once felt, success means different things to different people.

To me, success starts with desire and purpose.  Success is living my life the way I choose.  Success is knowing when to let go of what doesn’t work anymore and making changes that help me achieve my purpose for being in business as well as my purpose for living.  To me, success is happiness.

Decide what success means to you and make your plans to refocus your business accordingly.

Now What?
The Next Steps

During counseling sessions with small businesses of all kinds, I’ve found that success has as much to do with avoiding operational mistakes as it does with the overall economic environment.  We tend to do the things the same way we’ve always done them, making minor adjustments along the way.  But the time may have arrived when you should reconsider if the “same way” is the best way.

Look at every phase of your business and determine what, if anything, needs to be changed.  Perhaps you have a storefront that is no longer as profitable as it once was or is not focusing on your most profitable customers.  Or your home based business is outgrowing your basement.  Now is the time to consider other options.  And think outside the box.  Instead of  an expensive retail store location, a better solution may be a warehouse or even a storage unit that has hot and cold temperature controls.

Get out your financial records and look at where most of your customers are coming from.  Records are good for much more than just filling out your tax forms. Keeping good records of costs and what worked as well as what didn’t makes planning easier. You know which months are slow and when you’ll need heavier marketing. You’ll be able to plan more effectively for the busiest seasons.  This knowledge will go a long way towards preventing discouragement during the slower months.

The longer you’re in business, the easier it is. I have 30 years of records to compare. As a result, along with many other observations, I can tell you that, in my market, January and August are my slowest months while December, July and May are the busiest.

So if you haven‘t been keeping good records, promise yourself that you will begin today as you make plans to refocus your business.

Get out paper and pencil and write down the answers to these questions.  Just answering them in your head isn’t enough if you are are really going to use the answers to grow your business.

• Are most of your sales profitable?
• If you are creating the custom one-at-a-time gift basket for personal gifting, how can you cut down on the amount of time that goes into each individual creation?   Perhaps you should consider standardizing basic designs and then use something “uniquely creative” such as a themed label or gift box to make them special.  Do you offer too many choices or not enough
• Decide if you need to be targeting a different market.  In what area are you making the most sales?  The least?
• Is your business profitable throughout the year or is it a seasonal business?  By looking at your business differently and changing your basic business model, you can expand those seasonal highs into year-round sales.
• What about your marketing?  Are you tracking it and determining what has worked and what hasn’t?  Are you constantly educating yourself about new methods and opportunities for marketing?
• Are you a local business that would like to expand into a national one?
• Have you educated yourself on how to create a successful e-commerce business?
• Have you considered offering your designs to other gift basket companies on a dropship basis?  Or perhaps you should consider increasing your sales by adding dropshipped gift baskets to those you create.  The internet has made these options more possible than ever before.
• Are you still doing everything yourself?
• Do you have employees that cost you more than you feel they are worth?  Perhaps it’s time to consider outsourcing some of the chores to others, either in your own community or even across the world.  Virtual assistants can do everything from marketing to maintaining websites and blogs to accounting and organization.  Big corporations do it.  Why shouldn’t we on a smaller scale?Just be sure that the person you are hiring can be trusted to do the kind of job you expect and can be trusted with the information you share.

As you review your business for the past year, or several years, make notes to yourself.  In addition to the questions to ask yourself mentioned earlier, think about these ten most common mistakes made by other business owners.

1. Lack of Focus:

Most of us don’t have the resources to go after multiple markets simultaneously.  You can’t be all things to all people.  Many retail stores are guilty of this.  They have to provide different types of gift inventory for personal customers and for corporate ones.

Specialization simplifies your life and maximizes your profits.  Being focused on a specific target customer makes it easier to create an effective marketing message as well as decrease the need for excessive inventory.

2. Failure to Track

Many small businesses do not track where their sales are coming from, which products are selling better than others, and which inventory is sitting on the shelves gathering dust or reaching expiration dates.  It is essential for the internet business to track where the customers are coming from and what they are buying.  And this isn’t something that should be done only at the end of the year.  It should be an ongoing process.

If you haven’t been doing this, get out those sales records and analytics reports and check carefully for those jumps and bumps.

3. Failure to Clearly Define your Customer

This goes with lack of focus as well as tracking.  If you haven’t already sat down with pen and paper and described your best customer, do so now.  You can even take it a step further and interview your best customers, asking them questions about your
service, your products, their expectations, and what they want that you don’t offer.  You may be surprised at the answers you receive.

4. Failure to Plan for the Future

Just getting into your car and driving off into the sunset for a vacation, without maps or plans, can produce many surprises, some of them unpleasant.  Without a plan, you can’t know where you’re going and won’t know when you get there.  The same is true of a business.  We’ll talk about an “easy to create” business plan later but with any decision that you make regarding your business, you need to know why you are making that decision and what you hope to obtain from it.

5. Pricing

Pricing of your products and services should not just be a figure off the top of your head.  There should be a reason for every price you set.  I see all too many people discounting when they don’t have to.  Prices should be tied to value to your customer rather than how much you think they can pay.  Target the customers who can pay for the value you provide.  You need to keep an eye on your competition’s pricing but don’t get into a pricing war.  Product as well as shipping costs have increased over the past couple of years fo make sure that your own product pricing takes this into account.

Think about it.  Selling ten gifts at $50 each gives you $500 while selling double that number at $15 each only gives you $300.  So it’s not quantity.  It’s value.

6. Failing to go after Repeat Business

This is a major mistake that many small businesses make.  They fail to remember that the best customer is the repeat customer and repeat customers are usually the most profitable ones.  Constantly trying to get new customers is expensive and time consuming.  It’s starting all over again.

If you aren’t already, maintain a database of your customer’s life events, likes and dislikes, and determine how you can sell more products and services to them.  Also don’t forget to show them how much you appreciate their business.  Don’t always be in a sales mode when contacting them.

7. Failure to Keep Good Records

Financial records not only make state and IRS reporting easier, they also provide you with information you need to properly manage your business.  They are the eyes of your business and can provide you with insights that you would not have otherwise.

8. Failure to Budget

If you plan to profit, you are more likely to do so.  All too often, profit is just “what is left over” at the end of the financial period.  A failure to budget means that your expenses may not be in line with your expected revenues.  A lot of start-up businesses don’t do enough research to determine exactly what their costs will be.  As a result, their working capital is used up with unexpected expenses.

9. Under Capitalization

Having enough cash in the bank to support yourself and to get your business off the ground or to grow it is essential.  I’ve seen more businesses fail for this reason than for any other.  You can operate on a shoestring only if you have that shoestring to begin with, budget your expenses tightly, and plan on how best to build it into a whole shoe.

10. Failure to Embrace Technology and Using it Effectively

Technology is constantly changing and it’s difficult to keep up with it. Some can be very useful for running your business.

Quickbooks and other accounting and tax software is much faster and more accurate than the old double-entry bookkeeping that I grew up with.  The Internet makes finding phone numbers and information easier and helps us stay in touch with customers but it can also be used as a time-waster.  Facebook, Linked-in, and the other social media available to us can be used to build mailing lists but they can also beaddictive.  Groups and blogs, related to our industry, are wonderful ways to stay in touch with our peers and to learn the latest techniques and information about products.  And, in today’s world, every business should have a website or it is losing lots of leads.

Look at the technology carefully and ask yourself what will it do for you.  A smartphone can be wonderful for the person who needs to receive and send emails while on the road or away from the office.  For me, all I need is a phone where customers can reach me or I can call them.  If you have a smartphone, do you really need a tablet?  The newest technology is expensive so it is wise for each of us to look carefully at how it can benefit us.

Now that you’ve done all this, here are some other questions to ask yourself (and write the answers down) before we move on to the next phase.

1. What is your biggest business objective in 2020?
2. What is the most important thing in your business? In your life?
3. Where are your biggest opportunities as you enter the new year?
4. Where do you see a gap in your market that everyone else is missing? What is needed?
5. What do your customers complain about?
6. Where are you leaving money on the table?
7. What new revenue streams can you most easily add next year?
8. What are your top three time eaters and energy drainers?
9. What are the top five marketing strategies that you need to focus on?
10. What marketing strategies do you need to either drop or cut back on?
11. How will you know at the end of 2023 that you’ve had a great year?

Did you do just read the last few pages or did you really think and take notes?

You’re going to need those notes for the next phase so if you didn’t write anything down, the time is NOW!
Go back — Reread — Think — Write it down.
Then it’s time to prepare for a prosperous 2023!

 

Read the Previous article in this series A New Beginning

Read the Next article in this series:  Are You Growing Your Money Tree?