by Adam Litster | Sep 14, 2024 | Profit First, VPS, Entrepreneurship Newsletter
Welcome to our weekly entrepreneur newsletter! If you are new and would like to check out any prior editions, click here! We’re really hoping you are enjoying it so far. We’d also love to share this with as many other entrepreneurs as possible. We would be very grateful if you would share the newsletter on Facebook, X, or LinkedIn by clicking on the link below to share the post. Here’s a link to our share on these platforms:
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Time for our topic of the week, identifying our unique offering!
Most entrepreneurs and small business owners share a common goal – to grow their business, but many of us struggle with this. We are no different. Last year, in an effort to grow our business, we decided to engage a marketing firm to help. We spent thousands of dollars for them to remake our website, update our public image, and do advertising and social media marketing campaigns to increase the lead flow to our business. We went through this for several months of using this marketing firm, and after all that time, we had not received a single lead. Perhaps some of you have had better luck following this route (if so, let us know what made the difference!), but in our experience, many entrepreneurs go through similar experiences as ours and can relate to this. So why do we so often fail to generate even a fraction of the leads we hoped to receive from these big campaigns? And what can we do to have more effective marketing? I don’t profess to be a marketing expert, but I hope to address at least one of the factors that we have seen have a huge impact on attracting more business, and even more important, to attract more of the kind of customers you want. It is true that not all leads are the same. We can get a thousand leads a month, but if none of them care about or need the product you are offering, we’re not going to be any better off. It is essential that we are able to attract the type of customers that we want, our best customers. This comes from understanding our unique offering, i.e. that thing that makes you uniquely different from your competition.
The Pumpkin Plan Process
As we guide entrepreneurs through the pumpkin plan program (if you haven’t read “The Pumpkin Plan” here’s a link to the book on Amazon. I highly recommend it!), one of the most important and valuable exercises we go through is helping them to interview their top customers to discuss how they can serve the customer better. It is a revealing and transformational experience every time! During that interview, they ask the customer questions such as,
“When working with a business like mine, what impresses you the most?”
“What are your biggest complaints about businesses in my industry? What do you wish they would do differently?”
“If you could ask for anything and get it, what would it be? What do you wish we would offer?”
Through this experience, we are able to peer into the hearts and minds of our top customers, the customers we value the most and who value us the most, to understand what matters most to them. We start to see clearly what we do that has the biggest impact on our customers. In our experience, the answers are usually quite different from what we expect, which is one major reason our marketing and messaging are so often ineffective.
A Real Entrepreneur’s Experience
We went through this exercise with one of our clients whose business provides training to drivers seeking to get a commercial driver’s license. During the interview with all their top clients, our client was surprised to hear almost the same responses from every person. They said that the thing that impressed them so much about their experience with our client was that he guided them through the entire process of getting a CDL license from start to finish (when the client received the license), so they didn’t have to go through the process blind. Many of our client’s competitors would provide the training and stop there, but our client went above and beyond, ensuring every client had the best experience possible. This was our client’s unique offering. This is what made him stand out and made him better than everyone else out there. Then we looked together at our client’s website to see what his messaging was to attract new customers. On the website, it said things like, “We’ve been in business for 10 years, we have the best prices, etc. It didn’t mention anything about the unique and personal experience he provided to every customer. Can you guess what messaging each one of his competitors had? They were saying almost the same exact things as our client! There’s no way he could stand out with that kind of messaging.
When we start focusing our messaging and marketing around the things that our top clients want and what they most like about us, we are infinitely more capable of attracting more of those types of clients. It changes everything about the effectiveness of our marketing and the flow of leads into our business.
If you are having trouble growing your customer base or bringing in more leads to your business (or even if you’re not), we really believe this is an extremely valuable exercise for you also. Take some time this week to write down what you feel like your unique offering is. Even better, schedule interviews with your top clients/customers. This will quickly help you find that thing that makes you special to them and to start articulating your unique offering. Then focus your messaging and marketing around that thing.
The process really works! We’ve seen it with everyone that has put in the effort and, for each of them, it has transformed their business. If you would like a guide as you work through this process, we are here for you. Click here to schedule a call with us to learn more!
Thanks for reading and have a great weekend!
Adam Litster
Certified Profit First Professional and Pumpkin Plan Strategist
(816) 500-5779
adam@betterbizinfo.com
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by Adam Litster | Sep 7, 2024 | VPS, Entrepreneurship Newsletter, Profit First
Welcome to our weekly entrepreneur newsletter! If you are new and would like to check out any prior editions, click here! And feel free to reach out to us with any suggestions, questions, or feedback. I got some great feedback from one of our readers last week that really opened my eyes to a different perspective on the importance of core values in running a healthy business. We’re all here to grow together, so thanks to everyone for being a part of this!
I read an article today that said that approximately 90% of entrepreneurs prepare monthly financial statements or at least have someone prepare them. However, only about 50% of entrepreneurs are able to read, understand, and interpret them. This is not suprising to me as I have spoken with many business owners who struggle to understand their finances. Many even track their businesses’ financial information only to be able to file taxes. I am convinced though, that in the fast-paced world of entrepreneurship, where decisions need to be made swiftly and confidently, understanding financial statements is not just an advantage — it’s essential. In the case of managing a healthy and profitable business, I really believe that knowledge is power, power to make sound business decisions about the direction of your business, power to act quickly before a crisis hits, power to create a business that gives you the life you want.
Of course, it is true that some entrepreneurs become mega-successful, building and selling their businesses for millions of dollars without having any training or skill in finance. However, in my experience, I see that business owners who do not understand their business finances, more often than not, find themselves in a constant struggle to grow their business to a level where they can make a decent living. We see that most business owners follow a system we often refer to as “bank balance accounting”. Many of you who have read Profit First have heard this term used extensively to describe the practice of making decisions based on the balance in our business checking account. We look at the bank account, and if there’s money there, we are free to spend it; whether to pay employees, pay bills, or buy new equipment. This system works whenever there’s cash in the bank, but quickly falls apart when you need to pay for payroll or pay a bill and find that there’s not enough cash. This is one of the most stressful experiences many business owners could have, having to face the possibility of not being able to make payroll. You don’t want that, and we don’t want that for you either. The challenge with operating a business like this is that we always tend to spend the money that is available to us. So, as our sales grow, our expenses inevitably grow at the same rate. This is why it rarely really solves our problems when our sales grow… because the cash leaves the door just as fast as it comes in, and there never seems to be enough left over.
Profit First is an amazing system, which uses this natural tendency of doing “bank balance accounting” to our benefit. I won’t go into too much detail about how the system works today, but you can find out more about Profit First by clicking this link!
Profit First is about being proactive, rather than reactive. It is a powerful step in getting back in control of your business and leading it rather than leading you. It is a very simple and easy system that can have a huge impact on the health of your business. One of the reasons for this, we believe, is that it takes several overly complicated concepts held in traditional accounting principles and shapes them and applies them in a way that any entrepreneur can understand, whether they have training in finance or not. It works with our habits and skill levels. We believe that every business owner can learn to understand their business finances and how to make good decisions using that information, and it really doesn’t take a degree to get there.
Whenever we begin the process of guiding an entrepreneur through implementation of Profit First, we will always complement this by teaching them how to read, understand, and interpret their business financial statements (such as their Profit and Loss, and Balance Sheet). We have found that this contributes greatly to their success in improving their business in many ways.
Just as one example of the benefits of this: regularly reviewing financial statements helps you identify trends, both positive and negative, before they become significant problems. A decline in sales or profit, or an increase in debt could signal underlying issues that need to be addressed. Early detection allows you to implement corrective measures swiftly, potentially saving your business from more severe financial troubles down the line. As you look for trends in your sales and expenses, you are also able to identify areas in your business that need to be adjusted. I recently met with a client who had just recently started looking closely at their financial statements. During one meeting, when looking at their Profit and Loss for each month of the year to date, they noticed invoices to one vendor were relatively consistent for each month, except in the current month, the amount decreased substantially. With some investigation, they found that there was a timing issue with the billings from that vendor, and there were several missed invoices would be combined with the next months’ billing, resulting in a much larger than normal bill. If they didn’t catch this early, they might have seen an excess of cash in the bank, and not knowing why, thought that cash was available to use on … something else. Then, when the next month came around, and this massive bill came in, they would be thrown into a panic, because the cash was gone and they couldn’t pay the bill. Our client was able to see this early, and reserved the cash so the future bill could be paid without any issues. And the weight that was lifted off of them, knowing they were in control of their business, was such a great feeling for them.
Seeing trends and identifying issues early is only possible by having your finger on the pulse of your business – by understanding your business financial information.
We have worked with many of you to help you learn to understand your business’ financial statements and have really enjoyed witnessing the drastic change in your ability to lead your business where you want it to go and achieve your business goals. It is an amazing thing when an entrepreneur gains this power and confidence over the direction of their business. This is our favorite part of what we do.
We believe that the best person to be in control of your business finances is you. If you would like help with learning how to understand and interpret your business financial information, to be more confident in the direction of your business, we’re here to help you. Here’s a link to set up a free meeting with us to learn more.
Thanks for reading and have a great weekend!
Adam Litster
Certified Profit First Professional and Pumpkin Plan Strategist
(816) 500-5779
adam@betterbizinfo.com
Visit our website
Click here for my calendar to schedule a call or meeting
by Adam Litster | Aug 30, 2024 | Profit First, VPS, Entrepreneurship Newsletter
Welcome to our weekly entrepreneur newsletter! If you are new and would like to check out any prior editions, click here! And feel free to reach out to us with any suggestions, questions, or feedback. On to today’s topic!
As a kid, I joined in a game one time where we were asked to walk along a line drawn in the grass that formed a large circle. The challenge was, however, that when it was our turn, we were blindfolded. Our goal was to walk in the circle as accurately as possible, and the person who most closely followed the line won the game. I was determined to win! I soon realized, though, how incredibly hard it was to follow a line that I couldn’t see and create a shape that I could easily envision in my mind, but was difficult to translate into real life.
I believe that the same challenge occurs quite often among entrepreneurs. Everyone starts a business with a dream or vision of what they want and hope to accomplish with their new creation. They can see what kind of lifestyle they want their business to enable them to live. We often (and should) dream very big. But how many of us are currently achieving that dream, or living that lifestyle that we envisioned when we started? Not enough. There are many things that can be done to help lead entrepreneurs along the right path toward building a thriving business, but we wanted to focus today on one of the most fundamental and also most important elements, essential to the foundation of every healthy business: defining our vision and living in harmony with our core values. In the “Pumpkin Plan” world, we also refer to core values as “Immutable Laws” or the rules of our lives. To quote a part of the Pumpkin Plan coaching resource guide we provide to our clients: “Immutable laws are the rules we have defined for ourselves, almost subconsciously, on what is right and what is wrong. What is acceptable and what is not. What makes you happy, and what doesn’t. They are with you for life and they barely ever change.”.
Have you ever known someone that is driven to succeed so much that they are willing to be anyone to anybody? They will accept any client, even if that client is difficult, rude, or dishonest. Or maybe you’ve had a co-worker or friend who is a work-a-holic, who sacrifices all their time, energy, and focus for their career and making money, leaving their family in the dust? On the other hand, how many people have we seen on their deathbed express that they wished they would have worked more or stayed longer in the office each day? I would guess it’s close to zero. I would also guess that most of us probably don’t start our business hoping that we will work 80+ hours per week. So why do so many of us end up there anyway? In our experience, we have come to realize that many entrepreneurs, in an effort to “save” their businesses, lose sight of the things that matter most to them, their why for being in business. In other words, their vision for who they wanted to be and what they wanted to achieve with their business got warped along the way. And as a result, they are inevitably not living in harmony with their core values, and are probably not even able to tell you what they are. We also believe this is one of the reasons so many businesses struggle to thrive.
We have found that when entrepreneurs work sincerely on identifying and articulating the vision they have for their life and business, and also defining and living in harmony with their core values or immutable laws, these entrepreneurs put themselves on a path to greater personal and professional success and fulfillment.
I recently found a real life example of how this can work when reading a blog post on the official Pumpkin Plan website. I think you would benefit from it as well. Click Here to access the post.
Why did you become an entrepreneur? We often hear the response, “To become rich” or “I want to become a millionaire”. While these are great goals, we want to dig deeper. We want to understand the real “why” for starting your business. What do you want to do in your life? What gives you meaning? What impact do you want to have on your friends, family, or the world? I believe it would be valuable to really ponder on these questions this week. These are the first steps to identifying and achieving your vision for your life and business (and these don’t have to be separate. Your business is an extension of you!).
Connected to part of our vision are our core values. There are many ways to identify and begin to articulate our unique core values (or immutable laws). As we know, these are part of us and they rarely ever change. The key here is identifying them and making them part of our conscious goals and habits. One of the most helpful and inspiring books we’ve read is “7 Habits of Highly Effective People“. This book focuses a great deal on helping us identify and live in harmony with our core values and shows how that contributes to living an effective life. If this isn’t on your reading list, we’d definitely recommend it!
In the Pumpkin Plan program, we often also take another approach to this. We encourage our clients to start paying attention to your emotions. Every time something triggers strong negative emotions (like anger), ignore what triggered it for a moment and think about what rule of yours has been broken. Similarly, when you feel strong positive emotion (like giddiness) think about why that incident made you feel good. Those inner thoughts and feelings are your Immutable Laws. Once you have been able to find your immutable laws, write them down, tell your team and clients about them, post them on your website, and most importantlymake them the rules your business lives by.
We have seen time and again that when we focus our life and business on our vision and core values, our overall effectiveness and success begins to increase. You will hire employees that align with our core values, who therefore provide the same level of care and quality to your clients as you would. You also start to attract clients who have similar values and see your value much more effectively. You will stop focusing on things that don’t really matter in the end and really just distract you from what does matter. You will feel energized and motivated every day because you are actively working toward your “why” for getting into business in the first place. The resulting growth will be explosive!
I hope this has given you something to think about over the next few days! If you have any questions or would like any support as you work on finding your vision and immutable laws, don’t hesitate to reach out via email or set up a call with us by clicking here!
Thanks for reading and have a great weekend!
Adam Litster
Certified Profit First Professional and Pumpkin Plan Strategist
(816) 500-5779
adam@betterbizinfo.com
Visit our website
Click here for my calendar to schedule a call or meeting
by Adam Litster | Aug 26, 2024 | Profit First, VPS, Entrepreneurship Newsletter
Thanks for being a part of our 3rd weekly entrepreneur newsletter! We are really enjoying writing these and hope that you are getting value from it as well! For today’s newsletter, we want to discuss one of the most common myths that we see throughout small businesses: “A business needs to spend money to make money”. Every entrepreneur wants their businesses to grow. This is a healthy and necessary goal for any business to be successful. However, many business owners focus solely on the top line of the business, sales. And they work tirelessly to grow this number as much as possible, often taking on an unmanageable amount of costs and often debt. We agree that growing our revenue is important, but one of the first things we help our clients understand when working with them is that revenue is not the only or even the best measure of a successful or healthy business. What we focus on and help our clients focus on is actually on the bottom line – profit.
Let me illustrate this concept with a simple example. Joe is the owner of a landscaping business. Last month he just crossed over that golden threshold of reaching $1 million dollars in sales for the year! Great news right! Unfortunately, Joe didn’t seem to feel the relief and excitement that we’d expect from this achievement. While the business made a million dollars in sales, Joe’s business also spent almost every penny of that on expenses like paying for employees, supplies, equipment, or investing in that next great thing that would help grow his business, etc. His business expenses were so high that he couldn’t even pay himself for the past couple of months. As a result, he spent much of his time worrying about how he would pay his mortgage that month, or how he’d keep food on the table for his family.
Too many entrepreneurs focus so much on growing their sales that they fall into this trap: that they need to spend money to make money. So, as soon as money comes in from a customer, that money goes right back out the door to pay for expenses that we hope will lead to more and more sales. While some expenses are definitely necessary (We agree that you should pay your employees on time etc.), this philosophy of spending money to make money often leaves nothing left for the most important employee of the business – you. You own this business. That means you take on all the risk, all the responsibility, you provide better service and better quality than any employee. So why do so many business owners not take a salary or a profit from the business? We have to break this mindset that so many entrepreneurs have and that is the reason the majority of small businesses fail. We need to focus on Profit First! We’ve found through working with dozens of clients that businesses that focus on profit first, making profit the top priority in the business (even above revenue); those are the businesses that are the strongest and the healthiest. Owners who are regularly taking a salary and profit from the business are the ones who feel most in control of their business and confident in the direction their business is taking. And strangely enough, these businesses actually grow faster and live longer than those who don’t! They actually outpace their competitors and have the best ratings from customers and employees! Why? Because they focus on what matters most!
In our experience, businesses that account for profit and pay the owners first go through a process that changes everything for the trajectory of their business. Even though the cash left over is less now (money left after taking out profit and owner’s pay), they are forced to find a way to operate their business just as well as they did before. The only way to accomplish this is to innovate. In other words, these business owners find a way to get the same or more value at less cost. This is the key to profitable and healthy growth. With that innovation comes greater differentiation in your market. You become better than your competitors and your growth becomes natural and accelerates! It’s an amazing process to watch and we are very lucky to see our clients go through this as they both take the profit and pay that they deserve and, at the same time, see their business grow more than they had ever dreamed.
We believe that reading “Profit First” and applying it is essential for every entrepreneur. If you haven’t yet, we won’t be upset if you stop reading and go start reading that book. You’ll see what we mean soon enough!
As always, if you have any questions as you start working through the Profit First principles, feel free to reach out or set up a call with us by clicking here!
Thanks for reading and have a great weekend!
Click here for my calendar to schedule a call or meeting
by Adam Litster | Aug 15, 2024 | Profit First, VPS, Entrepreneurship Newsletter
During today’s newsletter, I thought it would be beneficial to talk about how to make and sustain change in our businesses. It’s easy to fall into the trap of believing that sweeping changes are necessary for success. We often think we need to overhaul our routines or adopt drastic measures to make progress. This is common in managing businesses, employees, and in basically every aspect of our personal lives as well. There has to be a better way right?
Have you ever set a goal to lose weight at the beginning of the year? We all make big goals like this and often make drastic changes to achieve these goals. When we want to lose weight, we often start aggressive exercise and diet programs, but how many times do we make it past a week or two before our goals are abandoned? The challenge is that these big changes often go completely against our current habits and routines. They are uncomfortable and, because we are creatures of habit, they are not easily sustainable. Research and experience shows that leveraging your existing habits can be far more effective and sustainable.
Big, dramatic changes can seem exciting, but they often come with a high risk of discomfort and failure. Our daily routines shape who we are and how we function. Rather than trying to force major changes, we are proposing that we use our existing habits to accomplish our goals. For example, instead of going from never running to running 5 miles a day, perhaps you could start by walking on the treadmill while you watch tv for a few minutes every day. This will not be that big of a lift, and then maybe start jogging during the commercial breaks. Pretty soon, with these little changes, you will easily be running every day and not even noticing how much you’ve changed in the process.
I want to go through some really crucial goals and changes that every business owner generally wants to make, but first, here are a few reasons why we believe this would be more successful as we work on positive change in our businesses and lives.
1. Making small tweaks to existing habits is typically less daunting than overhauling your entire routine. This approach minimizes resistance and makes the transition smoother, increasing the likelihood of long-term success.
2. Your current habits are already integrated into your life, which means they’re part of a system that’s working for you. By building on these established routines, you can achieve your goals without disrupting your entire life.
3. Small, incremental adjustments are more sustainable than large-scale changes. They allow you to gradually integrate new behaviors into your routine, making it easier to stick with them over time.
4. As you make progress with small changes, I promise you’ll start to experience a boost in motivation and confidence. Each small win reinforces your ability to achieve your goals and makes you more excited to continue working toward your goal.
Now, let’s talk about a big goal every business owner wants (and needs!): increasing and maintaining profit.
Most entrepreneurs spend countless hours working to grow their business, all with the dream of turning it into a large enough business to support the life they want and achieve their dreams. Sadly, for most business owners, taking a profit, or even receiving a reasonable paycheck feels impossible. In reality, for most small businesses, as the business grows and revenues increase, expenses increase just as fast or even faster. It feels like we can’t keep up. We often fall into the trap that if we keep slaving ourselves, all we need is that one big client and we’ll be set. This rarely ever happens though and can leave us discouraged.
We want that to change and there is a very simple way to do it! Just as I mentioned above, let’s work with our existing habits to make positive change in our business. One of the most prevalent habits entrepreneurs have is called “bank balance accounting”. We don’t look at the profit and loss or balance sheet to make decisions or know if they are able to pay the bills this week, we look at our current bank balance, and if there’s money there, we can spend it! Most accountants will say, DON’T do that, but that’s just not how our brains naturally work. What I’m suggesting is– let’s use that natural thinking and habit to our advantage! This is what Profit First is all about.
If you haven’t read Profit First by Mike Michalowicz, start reading it today! It’s a fantastic and simple tool that is guaranteed to make any business profitable if the principles are followed. Here’s a link to the amazon page:
Click here to purchase this book on Amazon
If you email me, I can also send you the first 2 chapters for free!
As a summary, Profit First teaches us to use these natural habits that entrepreneurs have to make simple lasting changes in our business that lead to permanent profitability. The Profit First system is very simple. Before paying bills our normal way, we separate our profit out first into a completely separate bank account. Now, with the amount left over, we pay our bills with the funds available to us in our operating account! We always spend what we have available to us. So now, if we have less available (because we already accounted for profit), we will force our business to operate on less and achieve the profit and success that we want.
Remember, success doesn’t always require grand gestures. Sometimes, the key lies in making thoughtful adjustments to the habits you already have. Embrace this approach and watch as your goals become more attainable and your journey more enjoyable.
I understand this is a simplified summary that is discussed and explained through an entire book, but I’m hoping this can at least pique your interest so you will decide to look into it more yourself. If you have any questions or would like a partner and guide to help you through the Profit First system, we are here for you! I’ve included a link at the bottom of this article so you can set up a free call with us to learn more.
Best of luck to you and your business!
Click here for my calendar to schedule a call or meeting
Adam Litster
Certified Profit First Professional and Pumpkin Plan Strategist
(816) 500-5779
adam@betterbizinfo.com
