The No. 1 area where women fall down in business is not honing in on making more money. In my 15 years of working with female business owners as a tax consultant and business planner, I frequently encounters these four scenarios:
Clients being scared to earn too much money in case they need to move into a higher tax bracket and/or pay more tax.
Falling into the “do what you love” trap and spending too much time and energy on small lifestyle businesses, which perhaps start as a hobby but do not develop into a strong business model.
Business owners falling prey to false economics, scrimping and saving pennies and cutting back on necessary expenses when they could be focusing that energy on bringing in more sales revenue from new business as well as doing more for existing clients. By looking at their pricing structure too they may be able to increase existing revenue streams.
A tendency to spend time on the “nice” and “fun” things like multiple group networking and unnecessary social media activity, when in reality their time would be better spent on strategically planned marketing strategies directly leading to sales.
I’m not sure if it’s societal conditioning, but women do often seem to play it safe and fail to pay attention to the money and their finances. Of course, in some cases they may only want to do something they can enjoy and are happy with lower earnings, but I think a lot of women are missing out on their full potential because they are fearful of the serious impact of business and scared of charging the right amount for their worth. As someone who puts together business strategies for my clients, I can see the potential in any business, but feel that some women are not putting themselves out there and giving it their best shot for fear of not delivering or the unknown, and their own dread towards sales and cash flow management.
My top 10 suggestions for women wanting a more serious business model are:
1. Follow The Money
Choose a business that can make real money. Look at the real potential. If you’ve got one asset like let’s say a vintage caravan, you can only ever make a certain amount of cash from that one asset and that may therefore not be easily scalable. Rather than do what you love (unless it can bring in big returns), learn to love what you do and the real money you make from it, there is no shame in that.
2. Consider Upscaling
If you’re working on your own, you only have so many hours in the day to work and make money. Taking on others can therefore multiply earning potential.
3. Know Your Money
Learn what your gross profit margins are and improve them, so that your gross profit is working harder for you and not the other way round. (Your gross profit is your return on sales before your overheads but less your costs of sales).
4. Be Time Savvy
Understand that for the main part spending time collecting cards at networking lunches and events doesn’t bring good returns. Far better to make authentic, real connections with people and existing or past clients who may already be in more of position to buy your service, and remember that time with your existing clients could be far more effective than time spent making new friends.
5. Put Work First
Plan your life around your business, not the other way around. Should you be putting the washing on in working hours or need to stop work for the whole of the school holidays, and could you benefit from hiring a cleaner?
6. Bring in More
Look at your turnover: increase sales, increase the prices you charge and do perhaps decrease your costs if it doesn’t jeopardise the business. But remember that bringing in more money is far more valuable than spending too much time look for utility bill deals and saving on the small things like your stationery spend.
7. Set Boundaries
Don’t work with awkward clients that take up too much time; set boundaries and don’t allow people to eat up your professional time if they are not paying for it or not going to bring you real business. Yes everyone might know someone who could be your future client but focus on your biggest referrers, which may even be your existing clients. Don’t be scared to chase up late payments as sales without payment aren’t real sales. Think of it as educating your client in how you work so that they can be a better client to enable you to better work for them.
8. Build Up A Support Team
Build up a professional support team around you. That may be in staff, business partnerships, business service providers and advisers, as well as creating strategic alliances with other similar industry professionals who you can cross-refer to. Most of all, make sure your network is working for you smartly and you’ll no doubt do the same for them, so it’ll be mutually beneficial in the long run.
Stop trying to do every aspect of the business yourself: aim to delegate, delegate and delegate, and the money will follow as it will free up more of your time to sell more of what you do.
10. Set goals and targets
Know what and how much you want and then work out how to achieve that by setting SMART marketing and business strategies that really work.
But my biggest piece of advice is:
“Never be afraid to earn more money, or pay more tax. 60% of something is better than 100% of nothing, surely?”