90 Day Business Tune-Up

Memorial Day Weekend is over and summer is here—-yay! The fourth quarter, which has the most revenue potential for most Freelance and other business entities, will arrive at the close of this short, sweet season and whether it brings you a feast or something less than, you’d better be ready. There’s a lot to prepare for this year.

Inflation has been eating your profits for at least two years. The shakeup that followed the recent collapse of three big banks still lingers and talk of recession refuses to subside. So maybe it’s time to take some defensive action to insulate your enterprise against the turbulence? Ya think?

Then again, you may have reason to feel optimistic. Are you one who anticipates a potentially robust fourth quarter? That happy thought may inspire you to consider scaling your operation, maybe hiring one or more part-time or even full-time employees, to ensure that your organization will seamlessly meet the increased demand for your products and services.

In either scenario, you’ll have some planning to do and it makes sense to start the process now and guess what? You can make a few smart moves that will give your business a summertime tune-up that will start showing the results you want in just 90 days! Analyzing key performance index metrics, numbers that reveal what’s really going on in your business, is Step One. You’ll want to verify the customers who bring you the most business, the average dollar amount of invoices, the average length of your sales cycle and the average number of days it takes to collect receivables, for example. That and other KPIs will help you decide what should be done to capitalize on your advantages, minimize potential obstacles and give some wiggle room when it’s needed.

SWOT Analysis

Objectively evaluating your business on a monthly or at least quarterly basis is always time well spent, regardless of the economic conditions you face. Since the 1970s, the SWOT Analysis has enabled business owners and leaders to account for the Strengths, Weaknesses, Opportunities and Threats that a business should focus on and manage. FYI, there are many free online tools that make it faster and easier to conduct a credible SWOT Analysis, ensuring that you evaluate all aspects of your business and help you consider goals and next steps.

Taking a peek at two or three major competitors can also unearth useful information and may even help you recognize previously undiscovered opportunities to pursue or other potential advantages to explore. Look for what can help your business stand out, including product or service add-ons and upgrades, customer loyalty rewards and customer experience and after-sale support.

Once the SWOT has been completed, identify what can be implemented in the short-term and develop strategies that include action plans and a timetable to keep you on schedule and drive results. Other areas that may benefit from scrutiny and are known to produce tangible results quickly are below.

Cash-flow

Insufficient cash-flow makes it difficult to manage your accounts payable and other fixed expenses and can result in late fees. Two strategies that you can institute immediately are known to improve your business cash-flow— 1.) speed up collection of accounts receivable, usually by timely invoicing and 2.) control spending.

Re: invoicing, time tracking software often has invoicing capability and it’s a timesaver for B2B service providers. Alternatively, you can develop the practice of creating a draft invoice when you send a contract to customers. The services you provide will be described and will be the basis of your invoices. Mostly, you’ll only need to add the time spent on the tasks.

Coaxing customers to pay on time may also mean that you need to broaden your company’s payment systems. Accepting two or three payment formats (e.g., mobile and online in addition to checks) could shorten the average number of days it takes to collect outstanding receivables. In addition to meeting customer expectations and helping to increase sales conversion, digital payments also mean money is deposited to your account within 48 hours.

Re: spending, examine your budget and look for what can be reduced or eliminated. For example, have you been a user of premium services and if so, are the upgrades meaningful? Also, you might consider renegotiating your contracts with suppliers, asking for a lower credit card interest rate if you always pay on time and reduce any discretionary spending.

Finally, money saved allows you to build a nice cash reserve, oh happy day! That means you’ll face the most favorable conditions should you look to obtain a line of credit that provides additional cash reserve. With a line of credit, you can draw from it on an as-needed basis but only have to repay what you actually borrowed.

Pricing

We all know that prices are rising and this gives you “permission” to raise yours—-maybe by 10% -20%? Your customers probably won’t complain, unless they are especially price sensitive. Consumers don’t stop purchasing when prices increase—-they simply adapt to what’s within their budget.

Consider designing a premium and a budget version of your services and add two new price points to the mix. Consumer behavior surveys have demonstrated that shoppers of B2B and B2C products and services appreciate the options of multiple price points. It’s highly unlikely that the majority of your buyers will gravitate to the lower price and in fact, if you design your premium services to reflect what buyers value most, a majority will probably choose to pay the higher price in order to obtain what’s important to them.

Customer experience and retention

If business slows down, it’s imperative that you step up your customer retention activities. Keeping a customer is always less expensive than acquiring a new one, so do whatever possible to persuade customers to keep doing business with you.

Prioritize customer satisfaction. Along with providing high-quality products and services, attentive customer service and beneficial after-sale support will result in significant improvement in customer satisfaction. Furthermore, everything from a website that navigates intuitively, to quick follow-up on questions asked on social media will positively impact the customer experience and the good reviews, repeat business and referrals that every business needs.

Get free advice

I’m honored that you read my blog (thank you!) but there are other sources you can explore and they’ll have information and advice well beyond what I offer. Small Business Development Centers and SCORE, both affiliated with the Small Business Association, offer free technical assistance and resources to owners of businesses of every size and what you learn can make a real difference. .https://www.sba.gov/about-sba/sba-locations/headquarters-offices/office-small-business-development-centers

Your local chamber of commerce or neighborhood business association will charge a (reasonable) annual dues plus a per event ticket price, but you’ll get a good ROI. There will be at least a few events that justify the money invested and you’ll get to meet fellow business owners and Freelancer peers. You might event meet your next client.

Finally, remember that the professionals you hire to provide business support services—your banker, accountant, bookkeeper, HR or IT specialist— also have expertise in addition to the specific service that convinced you to work with them. I’m sure that within their spectrum of expertise, they’ll be delighted to share valuable insights and maybe even help you to recognize new opportunities.

Thanks for reading,

Kim

Image: Kelley Wholesale Florist at The New England Flower Exchange in Chelsea, MA.

Forget About Bouncing Back—Bounce Forward!

A pandemic viral infection stalking the earth is not the only beast that can give any business a deadly wallop. An aggressive competitor, economic instability, technological advances that makes your biggest product obsolete, or the bankruptcy of an important client can take a business under like a riptide.

It’s a scary moment and no business is immune to a set-back. How can the business founders or leaders right the ship and head for calmer waters? Let’s take a couple of deep cleansing breaths, tap into your storehouse of resilience and figure out how to not just bounce back from business troubles, but bounce forward and stage a re-entry on higher ground.

When the realization sets in that the business is in a perhaps irreversible tailspin, the most common emotions the business founders/ leaders will ordinarily feel are fear and panic, followed closely by sadness and feeling like a failure. The enterprise that once made them so proud has been wrenched away. The body and soul ache.

You are encouraged to own your feelings. Denial, as revealed by a “take it in stride, carry on as usual” attitude is not recommended, but it is inadvisable to wallow in sorrow for an extended period. Recovery, personal and professional, lie in a rational examination of what went wrong and an informed decision about what to do next.

Start with SWOT

The old chestnut strategic planning technique that was first popularized in the early 1970s is still relevant today. Use SWOT to tally and measure the value of resources available to the company, assess current and projected business conditions and decide how to rebuild. A well-chosen and executed pivot or strengthening of the original business model, perhaps with the addition of an untapped niche market or infusion of capital, may be the healing recipe.

Strengths are valuable resources that can be leveraged—-still popular products or services; skills held by the founder and team members; the company brand/ reputation; strategic relationships; the client list; the email list; well-developed social media networks; cash reserves. Bundle the right set of strengths and propel your enterprise toward a profitable bounce forward.

Weaknesses are gaps and shortcomings that put the company at a disadvantage relative to competitors. Some organizational weaknesses cannot be eliminated because attempting to do so would not be practical. Instead, do what is possible in the near term to shore up, minimize, spin, or work around them. Primarily, it’s important to honestly and fully take stock of and plan around what has the potential to derail a forward bounce.

Opportunities are developments or circumstances in the environment that the company may be able to use to its advantage. Pursuing an opportunity is an offensive strategy that facilitates a bounce forward. However, one may search the horizon and find not a single lifeboat in sight. It may be necessary to pause and figure out how to create an opportunity, or wait for one to arrive.

While in limbo, finding a part-time j.o.b. may be the stopgap solution you need. I’ve been there and can testify that the strategy can aid a bounce forward. Search for a low-visibility gig that offers a desirable benefit in addition to money (which is probably inadequate). The idea is to get paid to discover and learn something that can contribute to the relaunch of the business and your professional life.

At my low-paid, part-time j.o.b., I eventually realized that my public speaking skills were greatly improving. That led me to search for and obtain a teaching position that continues to provide an intermittent but helpful revenue stream. Teaching enhances the brand and the cash-flow of Freelancers and business owners. That same j.o.b. required me to work with groups and I also came to realize that I could lead mastermind groups, where non-competing business owners and independent consultants meet each week or month to share experiences and insights that serve to support and inspire one other to achieve goals and become more effective leaders.

Threats are obstacles, challenges, or other developments in the environment that stand to undermine a company’s profitability and survival. Changing demographics, tornadoes and earthquakes, political or economic developments, computer hacking or data breach and the coronavirus pandemic are examples of threats. A company typically has little or no control over these events, which are external.

Guarding against threats is a risk management, defensive strategy. The best offense is a good defense. Keeping an eye on technology developments that may impact the desirability of the company’s products and services as well as being aware of potentially influential direct or indirect competitors who could cut into the client list are essential defensive actions. The idea is to limit or avoid the impact of harmful business conditions.

Market research

When you’ve discovered what appears to be the best direction for the company, curb your enthusiasm and take time to investigate the most advantageous business strategy before taking action. You owe it to yourself to lay the groundwork for sustainable success.

Research the market size, target market purchasing habits, the competitive landscape and your ability to access customers. Confirm that demand for your products or services is growing and not flat or shrinking. Consider business model possibilities that could work well. Talk to someone at the Small Business Association’s (free) SCORE business development mentoring program and discuss your restart plan with experienced business leaders before investing time and money.

Market strategy

Articulate an appealing marketing message and pencil in the olaunch campaign. Will the business have a new name? How will you introduce this newly configured venture? How will you describe and explain your pivot or redesign to current customers? A from the ground up marketing plan must expertly package, explain, persuade and promote to enable the bounce forward.

Budget

Whether it becomes necessary to build a new website, order new business cards, or take a workshop that will enhance your credentials and perceived credibility in the minds of new and original customers, it’s important to project business start- up costs.

Develop a 24-36 month financial plan and ensure that working capital will be available. Plan to have income as the new business ramps up. This could mean remaining employed in the j.o.b. for another year. When escaping a set-back, one must do what one must do to nail a successful bounce forward.

Thanks for reading,

Kim

Photograph: Kim Clark

Your Business, Positioned To Succeed

Since you’ve made the commitment to go into business, as a Freelance Solopreneur who offers B2B or B2C services or an Entrepreneur, who employs a leadership team to operate a complex venture you, the founder and leader, will be expected to position your enterprise for profitability and success.

Strategic planning is the process by which business leaders aim to create sustainable success for their organization and it is the essence of business planning.  Strategic plans typically forecast the upcoming 36 months.  Strategic planning is eventually undertaken by all business leaders who fully grasp their responsibilities.

Freelance Solopreneurs might request that their advisory board members participate in the strategic plan development.  Entrepreneurs can count on their team leaders and they may also invite other staff members to contribute to the process.

Step 1: A SWOT Analysis to reveal where the organization is today

Suggest that the planning team use the classic strategy planning tool, the Strengths, Weaknesses, Opportunities and Threats (SWOT) Analysis matrix.  SWOT asks the planning team to acknowledge and document the current reality of the organization, in preparation for deciding how and when to move forward with plans for growth.

In the SWOT, basic information such as identifying resources that can be considered competitive advantages and factors that are considered minuses, start the process. Note that the Strengths and Weaknesses categories ask the team to acknowledge internal factors, that is, conditions that the organization can influence.  The Opportunities and Threats categories hold external factors that the organization can strive to exploit or avoid as needed, but are unable to control.

Perhaps the most important document for the planning team to examine is the Income (Profit & Loss) Statement.  Over the previous 8 to 12 quarters, have total net sales revenues met the forecast projections? What is the trajectory of (top line) gross sales? The P & L includes categories for each product and service that is sold and reveals the history of sales, gross and net.  That data allows for reasonable projection forecasts to be made for sales revenue performance in the near term and up to three years out.  From the P & L. the team will also acknowledge production or acquisition costs of goods sold for each product and service; all marketing and advertising costs; selling costs; fixed operating expenses; payroll expenses; and taxes, local and federal.

Your accountant will be an excellent resource for financial data analysis (whether or not your team includes a fiscal controller) and will be able to recommend attainable goals that will strengthen the company’s fiscal future, information that is essential to the SWOT process.

Statistics and other Information on market share, current and newly arrived competitors and changes in technology, government regulations, or the priorities and preferences of target markets, which can either help or hurt the plans for long-term growth and success, can be culled from quarterly or annual marketing data and reviewed during the SWOT process.  Quality control, operational processes and customer service protocols should likewise be included in the SWOT Analysis.

Step 2: Use the SWOT results to determine your company’s best growth goals

Once the strategy planning team has a clear picture of the current conditions of the business, the next step is to decide what growth could look like for the organization.  It is strongly recommended that the team research potential growth opportunities for the business, to first understand where expansion can be expected to be sustainable and second, the short and long-term expectations for the proposed expansion.

Plans for operational efficiencies, such as improvements in service delivery, customer service protocols, quality control and inventory management could also be evaluated and strategies for improvements formulated during the SWOT, since these elements can impact business growth and perception of the brand.

Decision-making is a huge part of leadership and the team will demonstrate its prowess here. in Step 2. Your team will have been guided by a comprehensive and candid SWOT Analysis, which allows the team to develop plans and move forward with confidence.

Step 3: Strategies, Action Plans, Monitoring and Review

Once the direction for growth has been determined and the financial and operational upgrades needed to promote that growth have been identified, then a list of growth objectives can be proposed and agreed upon by the planning team.  Once the growth objectives have been officially accepted, then the affiliated strategies and action plans, with time tables and milestones to mark interim demonstrations of success, can be developed, discussed and accepted by the team,

Major planning initiatives benefit from monthly or quarterly review, so that incorrect assumptions and forecasts can be quickly revealed and corrections made.  An internal communications plan designed to keep plan participants and non-participating staff apprised of the strategic plan’s progress supports the motivation to continue to carry out the action plans that drive success on the ground.

Thanks for reading,

Kim

SWOT Your Brand

Freelance consultants and small business owners rise and fall on the marketplace perception of their brand, also known as one’s professional reputation.  As a result, the brand/reputation merits ongoing enhancement, promotion and monitoring as a component of a strategy designed to support new business acquisition and encourage repeat business—in essence, the strategy you implement to build and maintain a good client list.  The brand can be reviewed and evaluated in several ways, one of which is through the prism of the gold standard of strategic planning, the SWOT Analysis.

Every year, self-employed professionals will benefit from examining the viability of their brand, to become aware of what actions and behaviors enhance the brand and what might undermine that precious resource.  Using the Strengths, Weaknesses, Opportunities and Threats metrics will reveal this information.

Strengths: Professional expertise, competitive advantages, prestigious or lucrative clients, referral sources, valued business practices, strategic partnerships, educational or professional credentials, financial resources, influential relationships. This element is internal, within your control.

• How can you leverage your resources to upgrade the types of clients you work with?
• How can you persuade inactive clients to call you back for more project work and stimulate repeat business?
• How can you obtain more billable hours?
• How can you persuade clients to hire you for more complex and therefore more lucrative projects?

Weaknesses: Whatever undermines your brand, the opposite of your strengths, gaps in what or who you know, or deficiencies in the value that you bring to clients.  This element is internal, within your control.

• Which of your gaps has the most negative impact on the business?
• Which of your impactful detriments appear to be quickly, easily, or inexpensively remedied?
• What can you do to shore up those handicaps and minimize your liabilities—are there business practices that you can modify, professional credentials you can earn, relationships you can successfully cultivate?

Opportunities: Conditions that favor the attainment of goals and objectives. This element is external and beyond your control, yet you may be able to position yourself to gain from the benefits created by its presence.  Good information about business conditions in your marketplace helps the Freelance consultant to objectively evaluate and envision the potential of short-term and long-term benefits and what must be done to earn the pay-off.

• What new developments can you possibly take advantage of to bring money and prestige to your business?
• Do you see financial reward in offering an additional service or product?
• Is there a good client you should be able to successfully pursue and sign, or a lapsed client who, with some outreach, could be willing to reactivate?
• Is there a developing niche market that you can pivot into, with some uncomplicated adjustments?

Threats: Conditions likely to damage the brand, or your ability to acquire clients and generate sufficient billable hours. This element is external and beyond your control, yet you may be able to position yourself to escape or minimize the catastrophe caused by its presence.  This category requires the immediate attention of you and your team, since it carries the potential to end, or seriously cripple, your brand and business.

Developing and implementing a strategy of protective action, for example a brand facelift or a pivot into more hospitable business turf, is absolutely necessary for survival, but inclined to be time-consuming and difficult to bring about.  Staying abreast of what is happening in the industries that you usually serve and the viability or priorities of your largest clients, will give you the resources of time and good information and prepare you to react and regroup.

• Has a well-connected and aggressive competitor appeared on the scene, ready to eat your market share and client list by way of a better known brand, more influential relationships, a bigger marketing budget, or other game-changing competitive advantages? If that is the case, then do everything possible to offer superior customer service, assert your expertise, step up your networking, enhance your thought-leader credentials and nurture your client relationships (holiday cards really do matter).
• Will some new technology soon render your services obsolete? If so, what skills do you possess, or what can you learn, that will allow you to successfully repackage your skills, reconfigure your brand and continue to appeal to clients who already like your work?
• Has an important contact left his/her organization, leaving you at the mercy of the new  decision-maker, who has his/her own friends to hire? Or has there been a merger that resulted in the downgrading of the influence of your chief contact, who may lose the ability to green-light projects that you manage? If your client contact has moved on, absolutely take that person to lunch or coffee and do what you can to make the professional relationship portable.  If your contact has lost his/her influence, ask to meet the replacement, who may employ you at least for the next project if one comes up quickly (but may boot you out for all others, unfortunately).

Thanks for reading,

Kim