by Adam Litster | Mar 7, 2025 | Profit First, VPS, Entrepreneurship Newsletter
Transforming a Highly Seasonal Business: A Profit First Success Story
If you are new to our weekly entrepreneur newsletter, I want to first extend a warm welcome (it’s finally getting warm outside!). This week, we’re going to take a slightly different approach. We’d like to spotlight an amazing success story one of our clients recently experienced. We hope this can spread a bit of hope for struggling business owners and maybe even inspire you to take greater control of your business’ cash flow to achieve the same success in your business!
In This Issue:
- A Success Story: Transforming a Highly Seasonal Business
- Profit First and Seasonal Adjustments: How They Smoothed Cash Flow All Year
- The Impact on Personal Goals and Emotional Well-Being
In a bustling city known for summer events and tourism, a specialized hospitality business had operated successfully for several years, routinely surpassing $1.5 million in annual revenue. In 2023, they hit a record $2 million in sales. At first glance, you’d think the owner was living the dream—yet behind the scenes, the business faced an all-too-common issue for businesses that experience inconsistent cash flow (and don’t we all at times): their revenue flooded in heavily during the late spring and early summer, aligned with peak festival and wedding season, while the remaining months lagged.
Although their variable costs (materials and subcontractors etc.) moved up and down with the number of clients served, their fixed expenses remained the same year-round—rent, equipment leases, and most payroll costs had to be paid monthly, no matter how much (or how little) income arrived. With no concrete plan to handle the severe difference between Q2’s strong inflows and the slower rest of the year, their cash reserves dried up by fall—leading to a precipitous drop in profit and nerve-wracking debt obligations. Instead of relaxing during the holiday season, the owner was left battling insomnia and financial stress.
Enter Profit First
Earlier last year, before the busy season began, we started working together with them to implement the Profit First system and set up a cash-flow budget that would even out the highs and lows. We calculated a clear “Target Income for Allocation” (TIFA): the monthly amount of revenue needed to cover fixed expenses, taxes, owner’s pay, profit allocations, and any materials or subcontractor costs.
Armed with that TIFA figure, we devised a plan: once their busy season produced enough revenue to meet those budgeted needs each month, any additional cash flow would go into a seasonal adjustment account. During the lean months, when sales dipped and revenue wasn’t enough to fully cover expenses, the company would draw from this fund. Essentially, the summer spike funded the year’s quieter periods, sparing the owner from the dreaded “shortfall panic.”
A Smoother Ride and a Surplus on the Horizon
The results were striking. With strong early-season bookings—plus a disciplined approach—this company had fully set aside funds to handle fixed expenses, taxes, profit, and the owner’s compensation for the year already by the time they finished with their busy months. Within 2 months of starting their busy season, they even surpassed their annual TIFA goal based on realistic sales projections. That translates into a significant surplus by year’s end for every dollar earned above their annual budget—an incredible turnaround compared to last year’s cash crunch.
The owner recently asked, “What do I do with all that extra cash at year’s end?” That question is music to any advisor’s ears because it opens doors to achieving their long-term financial and personal goals:
- Paying down or completely eliminating debt
- Meeting tax obligations easily, without scrambling
- Enabling the owner to finally tackle postponed personal projects, like home upgrades or family vacations
More important than the bottom-line numbers is the new sense of calm and confidence the owner experiences daily. With business and personal finances on track—even during slower months—peace of mind has replaced the sleepless nights.
The Takeaway
This story proves how a strong cash-flow strategy can transform a business that’s profitable in peak times but falls short the rest of the year. By applying Profit First principles, calculating TIFA amounts, and creating a seasonal adjustment account, the company effectively eliminated the roller-coaster ride of feast-or-famine months.
If you’re dreading an upcoming slowdown or constantly chasing money after sales suddenly dip, remember there are proven methods to safeguard your cash flow and mental health. By planning ahead, allocating funds as they come in, and making your revenue work for you, you can avoid the trap of seasonal struggles—and finally find the freedom and confidence every business owner deserves.
Click here to schedule a free consult now!
See you next week!
Adam Litster
Certified Profit First Professional and Pumpkin Plan Strategist
(816) 500-5779
adam@betterbizinfo.com
Visit Our Website!
by Adam Litster | Feb 21, 2025 | Profit First, VPS, Entrepreneurship Newsletter
Working “In” vs. “On” Your Business: Finding the Right Balance
If you’re new to our weekly entrepreneur newsletter, welcome! Each week we research the issues impacting small business owners and entrepreneurs, then share insights, strategies, and expertise to help you overcome challenges and achieve your goals. Enjoy today’s edition!
In This Issue
- Defining “In” vs. “On”: What these terms really mean and why it matters.
- Ideal Time Allocation by Revenue Milestone: Insights from The Pumpkin Plan on where you should focus your efforts.
- Shifting to Big-Picture Leadership: Practical steps for delegating, automating, and systematizing.
In vs. On: What Does It Really Mean?
In the Business are day-to-day activities directly tied to operations and revenue: selling, delivering services, invoicing, troubleshooting, and managing emergencies. It’s the hustle that keeps the lights on.
On the Business are high-level, strategic tasks: planning new offerings, building systems, guiding your team, and setting the long-term vision. These activities take your company from where it is now to where you want it to be.
Most founders start by doing almost everything themselves. Over time, scaling requires shifting more energy “on” the business—leading and shaping it rather than getting buried in the details.
The Right Balance at Different Revenue Stages
According to The Pumpkin Plan, the ideal split between “in” and “on” evolves as you hit revenue milestones. Use this as a guideline to self-assess:
- Under $100K: ~80–90% In, 10–20% On
- $100K–$250K: ~75% In, 25% On
- $250K–$500K: ~60% In, 40% On
- $500K–$1M: ~50% In, 50% On
- $1M+: ~20–40% In, 60–80% On
If you’re feeling overwhelmed by daily tasks while revenue climbs, it’s time to shift more attention “on” the business.
Making the Shift: Practical Steps
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Delegate & Empower
• Identify non-core tasks you can hand off.
• Train and authorize your team to make decisions—reduce emergencies landing on your desk.
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Automate Wherever Possible
• Use tools for billing, scheduling, email marketing, and other repetitive workflows.
• Document each process so anyone can follow the same steps.
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Systematize Your Offerings
• Focus on your most profitable products/services.
• Prune low-value offerings to simplify operations and free up your time.
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Schedule “On” Time
• Block weekly or monthly slots dedicated solely to strategic planning and innovation.
• Treat these blocks as unbreakable CEO appointments.
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Measure & Adjust
• Track how you spend your hours.
• If “in” tasks creep back up, revisit delegation and systemization until you find the right balance.
The Bottom Line
At every stage of growth, the balance between working “in” and “on” your business must shift. By delegating, automating, and systematizing, you free yourself to lead with vision and strategy—building a company that supports your long-term goals and gives you the freedom to enjoy both work and life.
by Adam Litster | Feb 14, 2025 | Profit First, VPS, Entrepreneurship Newsletter
Happy Valentine’s Day!
If you’re new to our weekly entrepreneur newsletter, welcome! Each week we research the issues most impacting small business owners and entrepreneurs, and share insights, strategies, and expertise to help you overcome challenges and achieve your goals. We hope you enjoy today’s edition!
In This Issue
- Work-Life Balance: Why entrepreneurs often struggle to make time for loved ones.
- Building Systems for Freedom: Insights from The Pumpkin Plan on delegating and automating.
- Refining Your Offerings: Focus on high-value, high-profit products and services for a leaner, more fulfilling business.
- Benchmark Assessment: Use our attached worksheet to evaluate where you are, where you want to be, and how to get there.
Balancing Love and Business on Valentine’s Day
Valentine’s Day reminds us to invest in our most important relationships—but the entrepreneurial grind can leave little energy for family, friends, or self-care. If your business is running you, instead of you running it, the cost is more than missed date nights: it’s burnout, stress, and missed opportunity to live the life you envisioned.
The Valentine’s Day Check-In
This week, ask yourself:
- Am I satisfied with the time I spend with the people who matter most?
- Does my business support my personal life, or dominate my schedule and energy?
- What changes can I make to give my family, friends, and myself the attention we deserve?
If you’re struggling, you’re not alone—many founders trade freedom for stress. The good news? You can redesign your business model to reclaim both time and peace of mind.
Lessons from The Pumpkin Plan: Systematize for Freedom
Mike Michalowicz teaches that robust systems and processes free you from day-to-day chaos. Here’s how to start:
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Delegate to Capable Team Members
Empower employees with documented processes so they can handle routine tasks—and you can step away with confidence.
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Leverage Automation
Automate repetitive work—booking, billing, social media—to minimize errors and accelerate workflows.
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Document Your Processes
Create clear, step-by-step guides for core operations and store them in a shared hub for easy access.
Result: consistency, fewer interruptions, and the freedom to spend quality time with those you love.
Focus on Your Most Profitable Offerings
The Pumpkin Plan also stresses the importance of pruning low-value work and doubling down on what your ideal clients love:
- Boosts Profitability: More resources go to high-margin products.
- Simplifies Operations: Fewer offerings mean fewer headaches.
- Enhances Satisfaction: Specializing leads to better quality and happier clients.
Design a Business That Fits Your Life
Stop trading hours for dollars—build a model that fuels both your professional and personal dreams. Try these steps:
- Schedule Personal Time: Block “non-negotiable” hours for family, friends, or self-care—treat them like critical meetings.
- Assess Your Workload: List tasks only you can do versus those you can automate or delegate.
- Set Boundaries: If you’re working nights and weekends, consider trimming low-value offerings or raising prices to reduce hours without cutting profits.
Use the Benchmark Assessment to Get Started
Not sure where to focus? Download our Benchmark Assessment Worksheet to:
- Capture key metrics: revenue, profit margins, client count, and more.
- Evaluate team engagement & your time allocation.
- Set clear goals for revenue, profit, and work-life balance.
- Create an action plan to streamline processes, delegate tasks, and refine offerings.
Completing this worksheet gives you a bird’s-eye view of your business and highlights the areas needing attention—whether financial health, team efficiency, or your own time management.
The Bottom Line
This Valentine’s Day, gift yourself and your loved ones the balance you deserve. By building systems that let your business thrive without demanding every ounce of your energy, you’ll reclaim precious moments for what matters most. Remember: you’re the most important employee in your business—invest in strategies that help you live the life you envisioned.
by Adam Litster | Feb 7, 2025 | Entrepreneurship Newsletter, Profit First, VPS
The Three Levers of Profitability (Part 3): Raising Prices
If you’re new to our weekly entrepreneur newsletter, welcome! Each week we research the challenges facing small business owners and entrepreneurs, then share insights, strategies, and expertise to help you succeed. Enjoy this edition!
In This Issue
- Recap of Our Three Levers: A quick look back at cost cutting and sales-volume strategies.
- Lever #3 – Raising Prices: Why it can be the most direct way to boost your bottom line.
- Strategies for a Smooth Transition: How to communicate price changes, keep customers happy, and reinforce your value.
Why Raising Prices Matters
Once you’ve optimized costs and grown sales volume, the most immediate lever left is price. Even a modest increase can dramatically improve profit margins—especially if your operations are already lean and your sales are steady.
1. Know Your Value
- Reflect on Results: What do clients gain—time savings, efficiency, peace of mind?
- Benchmark Competitors: See where you stand, but don’t let their pricing define yours.
- Highlight Differentiators: Proven track record, specialized expertise, superior support justify a premium.
Don’t undervalue yourself—charge what you’re worth.
2. Determine the Right Approach
- Incremental Increases: Small raises over time ease clients into the change.
- Bundling & Packaging: Create high-value bundles instead of across-the-board hikes.
- Tiered Pricing: Offer premium/VIP options for those willing to pay more for extra features.
3. Communicate Effectively
- Advance Notice: Give clients plenty of warning.
- Explain the Why: Focus on added value or improved services.
- Transition Period: Lock in old rates for loyal customers for a limited time.
4. A Real-World Scenario – Doubling Your Prices
Doubling Prices, Losing Customers: You might lose ~50% of clients, but still earn roughly the same revenue!
- Same Revenue, Half the Effort: Fewer clients = more time, energy, and resources for each remaining customer.
- Higher Price, Higher Value: Focused attention raises perceived and actual value—transforming your business into a premium offering.
- Starting Small: Gradual bumps shed low-value clients first and build a healthier, more profitable base over time.
5. Prepare for Pushback
- Have a Conversation: Address concerns and consider phased increases or alternative packages.
- Stay Confident: Stand by fair pricing—rolling back sets a risky precedent.
6. Measure the Impact
- Track Conversion Rates: Are prospects still buying? Does revenue per client compensate for any drop in volume?
- Assess Profit Margins: Ensure net profit rises meaningfully.
- Gather Feedback: Ask loyal customers how they feel and refine future pricing accordingly.
Recap: Pulling All Three Levers
- Cut Costs: Lean operations make every additional dollar count.
- Increase Sales Volume: Grow revenue while maintaining control of expenses.
- Raise Prices: The final lever for rapid profit improvement when communicated and executed thoughtfully.
By balancing cost cutting, volume growth, and strategic pricing, you build a profitable, resilient business that supports your long-term vision.
by Adam Litster | Jan 31, 2025 | Profit First, VPS, Entrepreneurship Newsletter
The Three Levers of Profitability (Part 2): Increasing Sales Volume
If you’re new to our weekly entrepreneur newsletter, welcome! Each week we research the issues most impacting small business owners and entrepreneurs, then share insights, strategies, and expertise to help you overcome challenges and achieve your goals. We hope you enjoy today’s edition!
In This Issue
- Recap of Lever #1 (Cost Reduction): Why trimming expenses lays the groundwork for more profitable growth.
- Lever #2: Increasing Sales Volume: How to boost revenue strategically—without sacrificing efficiency or margin.
- Coming Soon: Lever #3 (Raising Prices): Stay tuned for next week’s newsletter on adjusting pricing the right way.
Why Sales Volume Matters
Once your costs are under control, it’s time to focus on Lever #2: Increasing Sales Volume. Growing top-line revenue can directly improve profit—provided you maintain your margins and avoid new inefficiencies.
1. Refine Your Ideal Customer Profile
- Identify Top Clients: Which existing customers bring in the most profit with the least hassle?
- Pinpoint Their Characteristics: Industry, company size, buying habits, and where they “hang out.”
- Align Your Messaging: Speak directly to their pain points and goals. Compelling offers start with a clear target.
Learn more about these techniques in The Pumpkin Plan!
2. Strengthen Your Sales Funnel & Automate Processes
- Capture Leads: Double down on channels that already deliver—referrals, social media, events.
- Nurture & Follow Up: Automated email sequences or personal touchpoints keep prospects engaged until they buy.
- Streamline the Close: Proposals, contracts, and checkout should be quick, clear, and friction-free.
- Automate Repetitive Tasks: Systematize any recurring revenue-related tasks so you can scale without burning out.
3. Tap into Existing Customers
- Upsell & Cross-Sell: Offer complementary products or higher-tier services to your happy clients.
- Referral Programs: Incentivize loyal customers to spread the word with rewards or discounts.
- Stay Top of Mind: Regular check-ins and newsletters remind them you’re there for future needs.
4. Expand Your Reach Strategically
- Explore New Channels: Could LinkedIn, industry partnerships, or YouTube bring in more ideal leads?
- Adjacent Markets: Target niches related to your core clientele for untapped opportunity.
- Measure ROI: Track which channels deliver profitable leads before investing heavily.
5. Maintain Control of Expenses
As you grow sales, watch out for hidden costs that can erode profit:
- Labor & Materials: Make sure staffing and supplies scale efficiently.
- Software & Subscriptions: Verify new tools are fully utilized and support profitable growth.
- Regular Check-Ins: Monthly or quarterly reviews ensure rising revenue isn’t offset by runaway expenses.
Setting the Stage for Lever #3
With costs optimized (Lever #1) and sales volume improved (Lever #2), you’ll be ready for Lever #3: Raising Prices. Stay tuned next week for smart pricing strategies that can amplify profit without alienating customers.
by Adam Litster | Jan 17, 2025 | Profit First, VPS, Entrepreneurship Newsletter
The Three Main Levers of Profitability (Part 1): Decreasing Costs
If you’re new to our weekly entrepreneur newsletter, welcome! Each week we research the most pressing issues for small business owners and entrepreneurs, then share insights, strategies, and expertise to help you overcome challenges and reach your goals. We hope you enjoy today’s edition!
In This Issue
- 3 Paths to Better Profit: Discover the three core levers you can pull to improve your business’s profitability and cash flow.
- Focus on Cost Reduction: Learn why cutting costs often delivers the quickest gains—and how you can start immediately.
- Preview of What’s Next: Look out for upcoming editions on strategies to increase sales volume and raise prices.
Why Focus on Cost Cutting First?
Many business owners dive head-first into chasing more sales—only to find that operating costs climb just as quickly (or even faster). If your business is spending more than it earns, ramping up revenue alone won’t fix your bottom line. That’s why, in this three-part series, we begin with the most immediate lever of profitability: reducing expenses.
Three Fundamental Moves
- Decrease Costs/Spending
- Increase Sales Volume
- Raise Prices
By tightening your belt before pursuing growth, you ensure more of every dollar you earn stays in your pocket—and that your profit compounds with each additional sale.
Why Cost Cutting Comes First
- Immediate Control: You decide your spending—no dependence on market forces or consumer trends.
- Less Risk, Faster Impact: Cutting unnecessary expenses can boost cash flow instantly. Most companies can trim 10–15% without sacrificing customer value.
- Stronger Growth Foundation: When costs are lean, every new sale delivers real profit and funds future expansion.
Step-by-Step Cost Reduction Strategy
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Perform a Thorough Expense Audit
- List all outflows: rent, payroll, software subscriptions, memberships, and small recurring fees.
- Ask “Why?”: Is each cost essential to delivering value? If not, eliminate, reduce, or renegotiate it.
- Use our “PRU Analysis” template to categorize each expense as:
- P (Profit): Essential costs that directly contribute to customer value.
- R (Reduce): Costs you can renegotiate or lower without losing value.
- U (Unnecessary): Expenses you can remove entirely.
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Separate Fixed vs. Variable Costs
- Fixed Costs: Expenses that don’t change with sales volume (e.g., rent, insurance). Negotiate or eliminate non-essentials.
- Variable Costs: Expenses that scale with revenue (e.g., materials, shipping). Streamline processes to lower these as you grow.
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Negotiate With Vendors
- Bulk Discounts: Ask suppliers for better rates on larger or consistent orders.
- Alternate Vendors: Shop around for commodities or services to find cost savings.
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Increase Operational Efficiency
- Automate Repetitive Tasks: Replace manual work with software or systems.
- Eliminate Redundant Steps: Map workflows, identify bottlenecks, and remove anything that doesn’t add value.
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Monitor & Maintain
- Schedule regular expense reviews (monthly or quarterly) to prevent cost creep.
- Set target ratios for overhead, materials, and other categories—track them religiously.
Laying the Groundwork for a Healthy Business
Cost cutting isn’t about depriving your business—it’s about streamlining operations, eliminating waste, and building a stronger foundation. With tighter cost controls, any future growth in sales or pricing flows directly into higher profits, helping you achieve both personal and professional goals.
What’s Next?
Stay tuned for Parts 2 and 3, where we’ll tackle the other two levers of profitability: increasing sales volume and raising prices.
by Adam Litster | Jan 10, 2025 | VPS, Entrepreneurship Newsletter, Profit First
Why “Bigger Is Better” Can Be a Trap (And Why Profit Matters More)
If you’re new to our weekly entrepreneur newsletter, welcome! Each week we research the biggest challenges facing small business owners and entrepreneurs, and share insights, strategies, and expertise to help you overcome them and achieve your goals. We hope you enjoy this edition!
In This Issue
- Why the “Bigger Is Better” Mentality Can Be a Trap: The myth that more revenue automatically solves business problems.
- Shifting the Focus to Profit: How cutting customers, services, or even staff can boost your bottom line and reduce stress.
- Planning for Healthy, Manageable Growth: Why systems, vision, and “profit first” pave the way for sustainable expansion.
The “Bigger Is Better” Myth—and Why Profit Matters More
Many entrepreneurs assume that if they just get “bigger”—more clients, more services, more employees—the rest will fall into place. You might remember thinking, “If I can land that one big client, I’ll finally make it.” But growing top‐line revenue without controlling costs often just magnifies the same problems: low profit margins, tight cash flow, and endless stress.
A Real-World Example
“A home‐cleaning client scaled up to 10 employees, hoping to solve their cash-flow issues. Instead, month after month they struggled—more payroll, more headaches, still no meaningful increase in take-home pay or peace of mind.”
After running the numbers, the owner realized that trimming the team back to 1–2 people would deliver the same income with far less stress and overhead. When expenses grow in step with revenue, profit can actually shrink.
Turning “Shrink” into “Optimize”
Accepting that “less” can be “more” is one of the toughest mental shifts—but it’s also one of the most powerful. By cutting unprofitable customers, services, or overhead:
- Your top-line revenue may dip—but your bottom-line profit will grow.
- You’ll free up cash flow and reduce constant stress.
- You’ll reclaim time and energy to focus on what really matters.
Healthy, Manageable Growth
Growth itself isn’t bad—it’s necessary to fulfill your vision. But scale only works if you’re profitable and stable to begin with. Before you “go big,” make sure you can:
- Refine Your Business Model: Identify your most profitable core offering and focus on that first.
- Put Systems in Place: Document processes so you don’t multiply chaos when you grow.
- Manage Expenses as You Scale: Watch costs even when revenue jumps—profit rarely grows by accident.
- Build Profit When You’re Small: At 5% profit on $100K revenue you net $5K. At 5% on $1M you net $50K—so maintain or improve margins before scaling top-line.
The Bottom Line
Stepping away from the “bigger is better” mentality lets you value real profit, owner satisfaction, and well-being over vanity metrics. By stripping away excess costs and unprofitable work, you create space for genuine growth—growth that enriches your life, not just your top-line figures.
Adam Litster
Certified Profit First Professional & Pumpkin Plan Strategist
(816) 500-5779
adam@betterbizinfo.com
Visit Our Website!
by Adam Litster | Jan 3, 2025 | Profit First, VPS, Entrepreneurship Newsletter
Hit ‘Refresh’ on Your Business Goals for the New Year
We want to wish you a very happy New Year! If you’re new to our weekly entrepreneur newsletter, welcome!
Each week, we research the issues most impacting small business owners and entrepreneurs, and share insights, strategies, and expertise to help you overcome challenges and achieve your personal and professional goals. We hope you enjoy the content!
In This Issue
- Reflect on 2024: Analyze this year’s performance to identify both wins and areas for improvement.
- Clarify Your Vision for 2025: Whether you’ve already defined your ultimate life/business vision or need to create one, it’s the foundation for setting meaningful goals.
- Revisit Your Profit First Allocations: Assess how well you stuck to your profit targets in 2024 and adjust percentages for the new year.
Looking Back and Moving Forward: Setting Goals for 2025
Another year has drawn to a close, and as we step into 2025, it’s a prime opportunity for entrepreneurs to hit “pause,” reflect on the progress they made in 2024, and chart a course for the next twelve months. Whether you nailed all your goals or found yourself off track, the start of the new year offers a clean slate—and a chance to align your business objectives with your ultimate life and business vision.
1. Reviewing 2024: Wins, Lessons, and Vision Alignment
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Assess Your Goals: What did you set out to achieve in 2024? Which goals did you exceed, and which fell short?
Identifying these trends will help you see what’s working and what needs revisiting.
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Detailed Expense Analysis: Dig into your numbers to uncover inefficiencies.
Look for recurring costs, forgotten subscriptions, or underperforming investments. Pinpointing where your money went is crucial before deciding where it should go next.
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Check Your Vision: If you already have a clear picture of your ultimate business and life vision, compare your 2024 accomplishments against that vision.
Did your strategies move you closer, or did they lead you in a different direction?
2. Defining—or Refining—Your Vision
If you don’t yet have a documented vision for your business and life, make this a priority in the coming weeks. Your vision is the driving force that shapes all your decisions. Without it, you risk setting goals that don’t truly serve your bigger purpose.
You are the most important employee of your business, and your business should help you achieve your personal and professional goals. Having a clear vision for the business allows you to lead your business rather than let your business lead you.
Ask yourself:
- What do I want my life to look like in five or ten years?
- How does my business fit into that picture?
- Which clients, products, or services align with the impact I want to make?
3. Revisiting Profit First
For those familiar with Profit First, now’s the perfect time to evaluate how well you stuck to your allocation percentages:
- Successes & Challenges: Did you maintain your profit, owner’s pay, and tax allocations consistently? Where did you feel strain?
- Set New Targets: Use this fresh start to tighten up your allocations, reduce unnecessary expenses, and ensure you’re setting aside a consistent profit each month.
4. Setting Focused Goals for 2025
Use your 2024 review and your ultimate vision to form clear, actionable objectives for 2025. Your goals should be:
- Specific & Measurable: Define exactly what success looks like (e.g. raise net profit margin by 5%, acquire X ideal clients).
- Realistic but Ambitious: Stretch yourself enough to stay motivated, but not so far that goals feel impossible.
- Aligned with Your Vision: Every project or plan should support the business life you truly want to create.
- Accountability: Find a trusted friend, business associate, or advisor as your accountability partner. Review progress together regularly and make small course corrections as needed.
The Bottom Line
The transition from one year to the next is more than just flipping a calendar—it’s a chance to realign, recalibrate, and recommit. By taking a thorough look at what worked (and what didn’t) in 2024, clarifying your long-term vision, and setting Profit First–inspired goals for 2025, you’ll be primed for growth that supports the life you ultimately want to lead.
Adam Litster
Certified Profit First Professional and Pumpkin Plan Strategist
(816) 500-5779
adam@betterbizinfo.com
Visit Our Website!
Year_End_Checklist_Financial_Reporting
by Adam Litster | Dec 13, 2024 | Profit First, VPS, Entrepreneurship Newsletter
Stop Surviving and Start Thriving: 5 Steps to Break Free From Misaligned Business Strategies
In This Issue:
- Identify the Survival Trap: Understand how reacting to crises can pull you away from your ultimate business vision.
- Spot & Correct Misaligned Actions: Learn how to evaluate crisis responses and redirect your efforts toward profitable growth and long-term goals.
- Stay Focused on Your Vision: Discover tools to prune unnecessary distractions and say “no” to opportunities that don’t align with your business mission.
Escaping the Survival Trap: Stay True to Your Vision
As an entrepreneur, it’s natural to do whatever it takes to keep your business going when crisis hits—be it a sudden cash shortage, the loss of a key employee, or a major client walking away. I’ve found that crisis can sometimes even be more subtle or persistent (i.e. struggling to bring in enough business to cover your business and personal expenses).
While quick fixes or drastic action often feel necessary in the moment, they can sometimes carry you further from your ultimate vision rather than closer to it. This phenomenon is known as the “Survival Trap”.
What is the Survival Trap?
The Survival Trap occurs when you repeatedly respond to urgent problems by taking actions that solve your immediate issues but misalign you with your longer-term strategic goals. These crisis-induced tactics might secure temporary relief, but they can gradually push your business off-course.
Instead of moving toward your envisioned brand identity and market position, you get stuck juggling short-term “fixes” that fail to build sustainable momentum. This cycle of crisis and desperate action often results in a persistent feeling of anxiety and self-doubt.
An Example in Practice
Imagine the owner of a landscaping company aiming to become a high-end, cutting-edge provider in the community. Faced with an unexpected cash crunch caused by the loss of a major recurring customer, the owner scrambles to fill the gap and keep the business going through deep discounting.
While these strategies bring in cash and keep employees busy, they also dilute the brand’s high-value image and steer the business away from its ultimate goal, not to mention threatening the business’s financial health and profitability. This entrepreneur is surviving, but not thriving—and certainly not moving closer to the desired vision.
Breaking Free from the Survival Trap
If you are feeling trapped in this cycle and have no idea how to get out, I want to first let you know that you are not alone. Everyone goes through this process of struggle and growth as they take on the challenge of entrepreneurship. I find myself in the survival trap far more often than I would like.
The great news is that there is a way to overcome it! To escape the Survival Trap, you’ll first need a clear picture of your ultimate vision. Without a strong understanding of where you want to end up, it will be difficult to take any kind of decisive or effective action to get there.
You’ll also need a structured way to assess how your decisions affect your long-term direction. Now let’s take you through the process of realigning your actions. I’ve also included a free fillable worksheet in this email to help you as you work through overcoming your personal survival trap.
1. Define Your Ultimate Vision
Start with your “why”. Why does your business exist? Just saying, “We exist to make money” is not enough of a “why” to inspire others. People want to feel a sense of significance, a sense of a greater purpose, and will buy from and associate with companies that make them feel that.
You should include answers to other questions that describe your ideal vision such as:
- What do you want your brand to stand for?
- What type of clients do you want to serve?
- What do you want to be known for in your market?
- What does your ideal company culture look like?
- What is your ideal financial position?
- Your own role in the company. What are you doing day to day?
- What lifestyle are you living as a result?
- Describe your ideal workday.
Don’t rush this process. Having a solid vision is just as important as setting a sure foundation for a building. Take the time to really get to what you want most in your life and write it down.
2. Identify the Crisis and Your Typical Responses
Now that we are defining our vision, let’s talk about how we can adjust our crisis response behavior. Consider a common crisis you face—say, for example, you run a seasonal lawn care business and we’re getting into the winter months. Sales and cash are starting to dry up as they usually do this time of year.
List the actions you usually take to relieve the pressure. Are these actions consistently moving you toward or away from your defined vision?
3. Map Out Your Actions
Using a tool like the Survival Trap diagram attached to this email, place your ultimate vision on one side and your immediate crisis on the other. Plot your usual responses around the crisis and note their direction. The goal is to visualize which moves push you closer to your vision and which pushes you further away.
Continuing with our example of the lawn care business, let’s say your usual response during winter months is to take out a loan to shore up your cash reserves and get you through to the spring. If part of your vision is to build a business that achieves 15% profit each year and is debt free, you would likely put the response “taking out a bridge loan” on the left side of the diagram (further away from your ultimate vision). You are in effect doing something that would sabotage your ability to improve your profitability and be debt free, since you are signing up for months or even years of costly debt payments and interest.
4. Select Better Solutions
Next time a crisis arises, remember your vision. Ask yourself: Can you solve this problem in a way that supports your long-term goal?
In the example of a manufacturer, instead of discounting high-end products at a bargain outlet, could you strategically partner with a boutique that respects your brand’s integrity, or adjust your product mix to prevent overproduction?
5. Say “No” to Misaligned Opportunities
Entrepreneurs are often bombarded by new ideas. Not every idea is a good one; some are mere “shiny objects” that distract from your Sweet Spot—the intersection of your best clients, your unique offering, and the most profitable, systematized parts of your business.
“Shiny objects” can come in the form of clients, products, investments, subscriptions, or anything else that can distract or even prevent you from achieving your vision. By rigorously filtering opportunities against your vision and mission, you learn to say no more often than yes.
Pruning Away What Doesn’t Serve You
This process isn’t just about responding to crises differently—it’s also about pruning away clients, products, or services that don’t fit your Sweet Spot. By eliminating those low-value, off-vision elements, you free up resources to focus on the most profitable, high-potential areas that align with your goals.
We understand this seems counterintuitive and can be a daunting and scary thing to do. Can firing your troublesome clients or eliminating some offerings really help my business? The answer is YES!
Over time, pruning ensures you nurture only the parts of your business that will help you flourish. We have seen it in dozens of clients that we’ve helped in the past, and they all can attest that pruning was one of the most influential decisions they’ve made.
Reclaiming Your Direction
Escaping the Survival Trap isn’t about ignoring the real challenges your business faces. It’s about addressing them in ways that move you closer to your ultimate destination rather than sidetracking you.
By consistently choosing solutions that fit your vision, you transform crises from distractions into catalysts for meaningful progress. In short, it’s time to break free. Stop merely surviving and start intentionally steering your business toward its envisioned future, one decision at a time.
We’d love your feedback as you do this analysis for your business! What insights did you gain? What would you like help with in the future? We’re here to help you, so don’t hesitate to reach out!
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Adam Litster
Certified Profit First Professional and Pumpkin Plan Strategist
(816) 500-5779
adam@betterbizinfo.com
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