Carla Titus: How to take financial control of your business and plan for growth
Oftentimes, the last thing business owners want to think about is their finances. Especially, when the numbers are not what you want them to be or if you haven’t been getting the results you wanted to generate in your business. Let’s add to the fact that money is a loaded topic and we might have a lot of emotions about it.
We are going to discuss the “new’ definition of success in business, why aligning your marketing strategy will positively impact your business, focus on developing a financial strategy that prioritizes both business and owner’s goals, proactively planning with emphasis on return on investment (ROI), and finally monitor and tracking financial performance.
Redefine your definitions of success
The expectation of a “successful” business owner is that they make 6 or 7-figure a year in revenue regardless of profit outcome and whether or not they get paid for their work. We have been sold the idea of working for equity and that one day you will get a big cash-out.
This is often not the businesses that need financial support because they are not building to be sustainable long-term. They are hoping to be a one-time hit wonder and get all the fundraising to help them get there.
For “normal” business owners, we need to prioritize a long-term sustainable growth strategy that allows you to build personal wealth and a comfortable cash runway that lets you sleep at night. How do you start working on taking financial control of your business while you focus on growth? That is the question we are here to provide guidance on.
Align your Marketing Strategy
Most businesses that don’t feel in control, lack strategic marketing and finance direction. Engaging a marketing strategist or having a plan developed early will allow you to know what actions to take to generate qualified leads and ultimately convert to paying clients.
If you struggle figuring out what the right marketing strategy is for your business, consider investing in a marketing expert who can guide you through how to best get results.
Remember that you should be able to measure the impact of this investment by the number of qualified leads you get after you implement the strategy. Conversion is up to you, but marketing should help you attract the right attention from people interested in your services.
Create a future-focus Financial Strategy
Financial strategy takes into consideration where you have been, current state, but more importantly where you are going. Future planning is instrumental in setting the right course to deliver financial success for your business.
We utilize quarterly and annual planning cycles to set the right financial strategy and develop goals with clear direction and action steps to make this plan a reality. Part of the process is to prioritize what is important to you as a business owner such as creating generational wealth, options or freedom, what is important to the company, and how to make those goals a reality.
Start with payroll (owner’s pay included), taxes and profit as these should be the top priorities to ensure a sustainable and financially stable business. If you are a goods business, you also have to prioritized cost of goods sold allocation and working capital to continue to purchase inventory to generate sales.
Proactively Planning for Growth
Part of the growth plan has to include a healthy marketing allocation. This will allow you to hire marketing strategy, implementation or outsource this task to a marketing agency. We recommend roughly 5% of revenue to sustain the business, but for growth this could be as high as 10%.
Another component of planning your marketing expense is the ROI (return on investment) or benefit you will get from implementing the marketing strategy (either by yourself or with help). We measure ROI through KPIs (key performance indicators) and leading indicators that tell us we have increased awareness of qualified buyers wanting to purchase our goods or services.
Social media engagements, number of followers, number of clicks on posts, open email rates, sometimes can be long-term leading indicators but it doesn’t necessarily mean you will convert that audience to paying customers.
Then, we move to actual conversion which can be measured starting with inquiries (track all the ways people can request to be a client or find your product), qualified clients, paying clients, and lifetime value of a client.
Percentages are very helpful when it comes to understanding if the tactics are yielding results. Knowing the relationship between inquiries to paying client conversions can help you understand what to expect based on how many qualified leads you have to connect with before you get a paying client.
We measure impact not just by the number of clients, but also by the awareness we are creating for the brand and product. While those are intangible and long-term, that attention can eventually convert to paying clients.
Monitor Financial Performance
When growing your business, both the marketing and financial strategy become an integral part of your success. Knowing what to track, when to measure it and how to monitor performance while establishing sustainable processes is going to be key for your business to thrive.
Knowing when to ask for help and outsource these services will help you free up time to focus on the bigger picture, hold you accountable, and get support setting the right direction for the business. We all know that business owners wear all the hats, it is time to change that, let the professionals provide a lending hand and guide us to make this easier.
As the CEO, your job is to design a vision and set the direction for the company. We encourage you to outsource your finances and marketing to get your time back and have the expert support you need to lead the way.
- Redefine your definition of success
For “normal” business owners, we need to prioritize a long-term sustainable growth strategy that allows you to build personal wealth and a comfortable cash runway that lets you sleep at night.
- Align your Marketing Strategy
Remember that you should be able to measure the impact of this investment by the number of qualified leads you get after you implement the strategy.
- Create a future-focus Financial Strategy
Future planning is instrumental in setting the right course to deliver financial success for your business.
- Proactively Plan for Growth
Percentages are very helpful when it comes to understanding if the tactics are yielding results.
- Monitor Financial Performance
Knowing what to track, when to measure it and how to monitor performance while establishing sustainable processes is going to be key for your business to thrive.
Get expert support in your business
If you want help creating and crafting your financial strategy, set up a consultation with Carla Chief Financial Officer (CFO) through this link or our website at www.wealthworthwithin.com to review your current financial situation and provide some options on how we can best support you.
If you want help with your marketing strategy, reach out to Hazel or Rachel at www.drioduo.com.
Bonus: Watch our interview on why your Chief Marketing Officer (CMO) and Chief Financial Officer (CFO) should be aligned on your goals. We covered how we view marketing as an investment from a finance perspective, why the relationship between CMO and CFO is so important, how we help define goals and help you achieve them.