It may be time for a (little) pivot.

Be honest, are you feeling stuck? Been selling the same things in the same ways for a while and it seems like sales are getting a little stagnant? Or maybe you are seeing an opportunity in your industry or area that you think you need to explore.

It may be time for a (little) pivot. 

The concept of the business pivot is not new, I learned about it several years ago when I was in the Syracuse University V-WISE program for women veteran entrepreneurs.  Traditionally a pivot is a term to describe a strategy to turn a business when the current business model isn’t working, a plan “B” if you will. 

But I also see a pivot as a strategy that can aid expansion of a business. I don’t think a pivot is only a plan B, but can be a business strategy for small turns, little twists that steer the business to look in an additional direction.

Entrepreneurs are, by nature, change agents. Known for figuring out ways to do things better, ways to take calculated risks. We are also known for continually searching for the “next thing.” I believe that using a simple pivot analysis can help you find the next move for your business.

Again, I don’t ascribe to a pivot as something to do only when things are going wrong. I believe that a little turn deserves a pivot analysis, so risks can be weighed in a structured, but simple, way.

Use this three-step process to discover your next business move:
  1. Commit to use openminded and unfiltered brainstorming. For best results, use the recommendations by Jennifer Jackson of Lucid Chart and just get every idea down on paper, and edit later.

 

2. Use My “ADFP Formula.” Answer open ended questions about your Audience, Delivery, Focus, and Processes to discover those places to improve, serve, and expand. Get the Free Workbook with the ADFP Process and questions to ask by visiting here.

 

3. Use market research to explore ideas. Don’t just throw out unusual ideas as bunk. Do a little market research to see if there is a fit. There are all kinds of free resources online to help you. Don’t forget to look at adjacent industries and at your own industry for ideas and changes going on that can support your ideas.

 In my own business I’ve generated tens of thousands of dollars in sales with a single product in just a few months. That product was a pivot from our main offering, and it launched a completely new line of revenue that brought us a host of new buyers. Some of the best business moves are those that seem to be a natural twist or progression. A pivot doesn’t have to be dramatic to impact your bottom line positively.

Growth and bottlenecks often cycle together. Most entrepreneurs want their businesses to grow, and many want them to grow quickly. Conventional thinking is that fast growth means more success. Truth is, that there are spots in a growth cycle that need to be navigated carefully to make sure your new level is sustainable.

 

Growth changes a few things; capacity, financials, and time commitment.  Anywhere there is a constraint on the business flow, a bottleneck shows up.  A bottleneck inside a growth cycle is the place where there is rapid growth requiring one or all of these three things at once. It strains capacity, money, or time, and there is a “squeeze” on operations as the business adjusts to its new size and scale.  

 

Failing to recognize and navigate a bottleneck smoothly can damage your business. And damage your reputation, if you are unable to deliver your products and services to meet customer expectations.

 

Convoy Road Coffee Roasters is navigating such a squeeze as we continue to grow our customer list, meet the requirements for a Department of Agriculture manufacturer’s license, and get ready for fourth quarter events and holiday gift giving.  These events combining together are affecting our operations, and finances.  We recognized early the constraints that showed up and the resources required to get to our next level of growth, which is basically $100k/ year.

 

It’s About Time and Money

 

First, here are the squeeze spots. The money we are spending bringing our facility up to the requirements for our license is not available for the additional coffee beans our growing customer base is ordering.  Our rate of growth is also requiring more and more stock. We must be purchase raw coffee in 65 pound and 135 pound bags. While ordering 130 pounds served us in June, we now need over 200 pounds a month to keep up.  Those are current money constraints. Competing financial interests; license and stock, and the need for more stock every month.

 

Another squeeze spot is on our time. The events we have on the calendar, plus the upcoming holiday gift demands, will require many more hours of roasting and packaging than we have now. Our little roaster used to average about 35-40 pounds a week with a few longer bigger days, now we averaging  75 ish pounds a week with a few longer, bigger days. That’s a big jump. Not only on our time, but we need more bags, labels, and the time it takes to do all of those additional tasks. We may have to hire some part-time help soon. Which of course leads again back to money.

 

Every decision we make right now is made after considering its effect on our growth plans and how it can help us navigate the current bottleneck.  And honestly, I have been a little unsure of myself for the first time in quite a while, having to work hard at not falling back into my default mindset pattern of being afraid of making a mistake.  We also know that this won’t last forever and expect it to resolve by the end of October.

 

Expect Bottlenecks at Every Stage of Growth

 

Bottlenecks can happen in every business. One place I see it is with people who are scaling their side hustle and leaving their full-time job. Constraints on time before the switch can be challenging and constraints on money in the first few months after the switch are not uncommon. During various stages of growth, you will see them in your own business.

 

The best way to navigate bottlenecks in your business is to first expect them and then be able to recognize them. I always expect a bottleneck at every stage of growth. They don’t always happen, but I am never surprised if they do. For growth to be sustainable, you have to expand across operations. That requires more investment of time and money, and your new business capacity could require team, equipment, and new operational services.

 

As for recognizing the bottleneck- look for the constraints before you feel them. We were able to predict the financial squeeze to some degree.  We researched the licensing regulations and the expense involved in converting our facility. So, we were able to project the amount of cash we would need, and how much it would affect our operations over what period of time.

 

Knowing Your Numbers Will Help

 

It was surprising, however, by the amount of the financial squeeze.  This is because I hadn’t expected the amount of customer growth we also had during that time. But we knew our numbers, and we were able to respond quickly. We recognized we were headed for a cash squeeze before it hit.  Knowing your numbers is an important part of being able to recognize and respond to the beginnings of a bottleneck in the growth cycle.

 

Whether you are preparing to scale, or in the middle of a growth spurt, be mindful of the constraints. Watch your time, money, and capacity.  Remember that bottlenecks are temporary, and cash is king. These growing pains are a good sign that you are in the right market, with the right audience, and in demand for your products and services. Respond, don’t react, to growth in your business and always keep your eyes on the vision you have been given.

Ready for support with your growth? Join the Success Studio mentorship program. 

Admit it, as entrepreneurs we have full plates. And for anyone running more than one business it can get very overwhelming quickly.  So why not add flexibilty with a weekly task list?

If you sometimes look up at the calendar and realize you forgot something, and it is a task you are supposed to do each week, (hello social media post to promote the blog), I have an answer for you.

 

Add Flexibilty With A Weekly Task List

Imagine creating a simple tool that helps you remember the things you have to do around your business and life. This tool tracks the repeatable tasks that can sometimes get missed. Imagine having this list of tasks that you need to do every week. By using this you can add flexibility with a weekly task list.

 

I created such a tool for my life and business (es) and it has been a game changer.  The key is that the tasks can be done generally any time during the week, as long as they get done. Because I am a pen and paper kind of girl and love the feeling of checking a box or crossing things off a paper list, I created a single list of tasks on my computer in Word, and I print off a fresh sheet every week.  

 

 

Here are a few of my tasks:

  • Create the soundbite for the next podcast episode
  • Promote the blog on social media
  • Make sure to pre-label 50 12oz coffee bags (put the logo and “roasted right” labels on them)
  • Print 25 Thank You Cards for shipped coffee orders

There are a few more, but these are tasks that support both businesses. If I have time on a Friday afternoon and I want to pre-label bags, or print the labels, I can do that.  If I have 45 minutes between calls and I want to create the soundbite for the podcast, I can do that too.

 

 

To create my list, I tracked all of my repeatable tasks for two weeks, writing down the things I had to do, then formalized it into a pretty document I like to check off. I also leave a few blank spaces on the sheet for the one off “miscellaneous” tasks that I need to get done in a given week. 

 

Having this list has not only helped with remembering all the little tasks but has also helped with procrastination. Many of these little tasks are kind of boring, or repetitive, and easily forgettable. Having a list in front of me also allows me to choose what to do and when.  Supporting good time management. It also allows me to know each thing on there is important for my life and business.

 

 

In a strange way this list has become kind of a game to see what I can “squeeze in”. That flexibility also reduces stress, because I don’t end up trying to get everything done at the last minute. I print off my weekly task list every Friday.   If you struggle with things falling through the cracks, give this a try, and please, let me know how it works for you!

 

Should you need more resources for your business, check out my free resources!

 

 

I get this question a lot from my clients because wholesale products require the sharing of profits with the retailer, so the margins are lower in your business. While it isn’t right for every business, I have helped several clients with very successful wholesale and consignment lines of business that rapidly grew more income, greater audience following, and ultimately a larger retail base.  Here are a few reasons that wholesale and consignment can be great for your business.

 

 

 

Wholesale Products: Larger orders than individual sales

 

When any customer buys you should do a happy dance. But when a wholesale customer buys it’s a bigger order and a bigger happy dance. If a customer buys one, a wholesale order can buy 12. Even with the loss of margin, you have more volume, and you make more income.  Just make sure your numbers are right on the wholesale and retail prices.  Know your production, packaging, and labor costs.  I have several clients with retail margins over 60-80%, so wholesale margins are still beautiful even sharing 25-40% with a retailer.  Take the time to build a solid relationship. Give them the product knowledge and watch how your business customers begin to promote YOUR product when people ask for suggestions.

 

 

Wholesale Products: Introduction to their audience

 

And the reason you don’t mind giving margin to the retailer is… because you are being introduced to their audience! They are paying for their storefront, labor, overhead, etc., and you get to be an option for the customer base they spent time and money building.  They are making something, and you are still making something. It is a win-win. You get shelf space, physical or virtual, and the visibility.

 

 

Wholesale Products: Reordering more frequently

 

Another aspect of wholesale is that there are more frequent orders from the buyers. Individual consumers buy maybe a few times a year (depending on the product) but businesses are going to order as they are selling. A key here is to be organized and to be a great account manager. Know the business owner’s intentions with your product. Learn what is selling and what isn’t.

 

Again, build that relationship. Make suggestions, call, and ask for the reorder (don’t make them run out first), and for the love of all things holy, don’t take it personally if an item isn’t a hit with their audience.  The reorders from a business are generally larger than an individual order, so more volume, more income, more chances to serve the business owner and their audience.

 

 

Converting fans to direct retail

 

This happens frequently. After a time, the customer may begin to order directly from you, at retail.  This happened to us with the coffee business. People bought our product from a local store, then joined our Facebook group, then directly ordered from us.  I’ve seen this happen with several clients of mine as well.

Make sure to have your website or online store on your product label.  But please note: DO NOT undercut your wholesalers with deep discounts online. It’s very disrespectful and will cause you to lose wholesale business fast. The retail price is the retail price. If you buy from me, from them, or from the other them. The ONLY time I’d think about discounts would be if something is discontinued or you are discounting wholesale as well, the margin remains the same for the retailer.

 

One last thing, consignment can be a great way to test out a relationship with a potential wholesale customer. Offer to let them try it out in their business for a time, say 30-60 days, and after it sells out, you would be happy to have them as a wholesale customer. The difference is that on consignment you are paid only after an item sells. In a wholesale account the business customer owns the item once they are purchased at the wholesale price.

Do you have a food business? Whether it is a cottage business like a home bakery, or a restaurant, or takeout place, there are a few key things you can do to stay in profit in your business. Here are some financial tips for food businesses. 

Food business

 

 

Financial Tips for Food Businesses

 

Know your real food costs on everything you sell and have good margins

 

  • Make sure you calculate your food costs, don’t guess. Take the time to know what it really costs you to create that dish or bake that cake. All the costs involved. Include costs of packaging, labels, and labor, to calculate the true prices. Consequently, that container adds to the cost of delivering the food, as do any food labels– whether it is served in-house or sold online.

 

  • Don’t forget operational expenses and waste costs in your pricing scheme as well. For instance, every business has fixed operating expenses such as rent, internet, and phone. However, as a food business, you also must include waste and other costs like linens, that other industries do not have to include.

 

  • Watch your margins. If you are producing food products, I like to see 60% or better, if you are reselling items, I like to see north of 35%. You will save money, and will have higher margins, by buying ingredients and producing items in-house versus re-selling food that was already made.

 

Watch your inventory spend

 

It is VERY, VERY, VERY easy to overbuy inventory in a food business. In fact, suppliers give volume discounts. It is important to remember that any money you have tied up in inventory is money that you do not have available for other things.

 

Keep in mind how often you can get a delivery from your suppliers. Is the savings of $10.00 worth the additional $77.00 in your walk-in or freezer?

 

Good inventory management will allow you to have better cashflow. Knowing your top sellers and the items that need to be on a regular schedule of ordering will prevent the “feast and famine” orders swinging hundreds of dollars each week.

 

Have an emergency fund and keep debt low

 

Lots of things can happen that affect revenue in your business. If you have bad weather and your restaurant doors are closed for a day or two, or a shipment of your cookies gets damaged and needs to be replaced, it costs your business money.  Relying on the public to decide to eat out or order in on a given night isn’t always predictable. Keeping some cash stashed is a good idea to offset any lower revenue months. Typically, quarter one each year is brutal on food businesses. Having the money set aside to cover any income dips can be the difference between staying in business and not.

 

Along the same lines, keeping debt low is important. Most of the inventory in food businesses are perishable and aren’t available as collateral to take out an emergency line of credit if needed.

 

For example, the depreciation of equipment also can make the food business equipment a little riskier for the bank to loan on for full value.  In addition, not having a lot of debt in the business can also make a difference in the success of a food business in a slower season.

 

Create a sinking fund for equipment repair and replacement

 

Food preparation requires equipment. Ovens, fryers, stovetops, refrigerators, etc., are commonly found in restaurants and home food businesses. These pieces of equipment will often need regular maintenance, and at some point, replacement. Creating a separate fund early in the business where money is parked for these specific needs can ensure that if a piece of equipment goes down, the restaurant budget doesn’t struggle to cover the repairs.  This fund truly protects the business from expensive appliance repairs that must be made to keep the business running.

 

 

Author’s Note on Financial Tips for Food Businesses:

 

Using these tips will help to ensure that your food business operates with finances in the black. You can protect yourself and your business from the most probable money issues facing your industry by:

  • getting good margins
  • only having the necessary inventory
  • having an emergency fund and keeping debt low
  • saving to maintain equipment.

 

Did this blog bring you a bit more clarity?

 

Then visit our linktree below for some useful resources!

 

https://entremoneycoach.com/linktree/

Are you ready to form an LLC? I’ve seen quite a bit on social media lately about forming a Limited Liability Company to create a business. I want to remind you that not everyone needs to rush into creating one to have a business.  It can protect your personal assets from being reached to pay a judgment if it gets sued.  There are important decisions to be made about an LLC.  Make an informed choice based on where you and your business are at right now. 

 

business registration

 

An LLC has some great benefits. But, it also has some responsibilities that not enough business owners are aware of. 

 

Here’s the skinny on forming an LLC:

 

 

Form an LLC: It Creates a New Legal Entity

 

When you form an LLC, it creates a new legal “person” who will have its own legal identity. You and any partners become “members” of the organization. The organization is the “citizen” of the state where it is formed.  Typically in the state where the member(s) live. You are creating a new structure. It needs to be treated that way, even if you are the only member of the business. Depending on where you live you may need to renew your entity each year and file to keep your LLC in operation. Additionally, the LLC will have a separate Employer Identification Number (EIN) for taxes, and you must maintain separate bank accounts. 

 

 

 

Form an LLC: All the Business Income Belongs to the LLC

 

One of the biggest issues I see is that people create an LLC to protect their personal assets, which it can, but they use the LLC bank account as their personal piggy bank. In order for the LLC structure to work, and to protect you, the finances MUST be kept completely separate. The LLC pays you as the owner.  Either by a paycheck or through an owner’s draw. You don’t swipe the business debit card to pay personal expenses. Ever.  If you do, the courts can conclude that you didn’t actually treat the LLC as a separate person and that you are really the “same person” as the business, so they can go after your personal assets. It’s a little complicated and beyond the scope of this post, but I cannot stress enough how strictly you must keep the finances clean with an LLC. 

 

 

 

You May Not See Tax Benefits Until You Reach a Certain Income Level

 

Another reason to create an LLC is there can be some tax benefits to the business owner. Depending on the tax structure of the LLC, such as an S-Corp, personal income taxes are being paid on the income the owner actually takes as salary or draws, not on the income that is remaining in banks at the end of the year- which belongs to the LLC.

 

Tax structures and whether the LLC is taxed as a “pass-through” to the member’s personal taxes or as a separate entity is a little outside the realm of this article. But you may be surprised to know that the benefits may not be that great until you pass a certain income threshold. Until your business makes a certain amount in profits, the difference in the amount of taxes may be minimal.

 

 

 

 

Understand the Benefits AND the Costs

 

The many companies preparing and submitting LLC documents to the states are either assuming business owners know all the details, or they are focusing so much on the protection they fail to talk about the expense and the upkeep of creating a new entity. In some states, the renewals can be quite substantial. For one of my clients, her LLC renewal is $800.00 a year.

 

Weigh the costs against any assets that may be at risk, and of course any potential tax savings you could have.  Long story short, not everyone needs to rush into an LLC when they first start a business. Talk to a tax professional about any potential tax benefits, and know your state costs and rules before you create your new business entity.

 

Need free resources for your business? Check out our free resources! 

 

As entrepreneurs, we are often asked if we have a “business strategy” for just about everything. Social media, marketing, growth, operations, and on and on. But what does it mean to have one? The word strategy, as defined by dictionary.com means, “a plan of action or policy designed to achieve a major or overall aim.”

 

business strategy meeting

 

In all honesty, it can feel a little overwhelming to think about everything that needs to be planned in your business. On the other hand, operating without any plan, that is, just winging it in your biz, will cost you time, energy, and money because you will be trying to hit your targets in the dark. The truth is that you need an overarching plan for your vision, then mini-plans in each of the action areas.

 

 

 

 

Must Fit Into Your Bigger Vision and Goal

 

You want to go from New York to Los Angeles in the car. That’s the goal, get to LA. There are so many different routes to get there, but we can probably agree that you need to have a starting road and you need to be going west. Without looking at a map or GPS or having a strategy to get to your destination you could end up anywhere else costing time and money.  It is true that your starting route may change, and you may end up on a different interstate- but as long as you hold the vision of getting to LA, you will be ultimately moving west. Make sense?

 

My question to you. Where are you going? What does this look like in the future? What is your vision? This is your very first strategy assignment, create a picture of where you are going. This is where people look out 3 months, 6 months, a year, five years. But for now, just pick a timeframe within 2 years and grab the picture in your mind. Now we need to hold that vision to create a plan to get there. Write down this vision and your goals.

 

 

 

 

Must Lead Into Action Plan

 

Some of us love to plan. I do. Unfortunately, sometimes we replace action with planning. Planning is preparation, and I am so guilty of this when I have any fear or resistance around taking the next step. The best use of strategy is to translate your plan into actions that you take every day, week, month, towards your vision.

 

This is where multiple strategies are developed. For example, the social media strategy, marketing strategy, and webinar strategy must nest within the bigger vision. To do this, look at your written vision and goals and describe what each plan needs to do to support your journey. If your business is product-based you may have a strategy that includes sales to both wholesale and retail audiences, so your sales strategy needs to address how to support both.

 

The actual number of plans will vary by business. If you are in manufacturing, you will have strategic needs that aren’t necessary in the coaching world. At a minimum, however, I think just about every business needs:

 

  • A marketing strategy (with a social media plan)
  • A sales strategy
  • A customer acquisition, service, support, and retention strategy
  • A clear strategy for delivering the products and services to market

 

With these four strategies defined for your business, you can make decisions and take action every day aligned with your bigger vision.

 

 

 

 

Must Be Reviewed At Least Twice A Year  

 

It is so true that businesses start with one thing and ultimately evolves. You may start with a single idea and grow it into several lines of revenue. You may need to meet your customer a different way as the industry changes. The strategy will also evolve and grow with your business.  So, creating your strategy isn’t a “one and done” event.  Reviewing it twice a year is a great way to see if your goals and vision are still aligned based on the daily real-world business things.

 

If you aren’t a natural planner, I get it. I hope you see how important it is to have an overarching map and strategy to get to your vision.  You’ve been given a vision, and your entrepreneurial purpose is to reach it. If you need some help with planning your next moves, grab a spot on my calendar for a chat, I have an intensive 3-hour session available that is intended to get your plan reviewed and if needed, back on track to support your goals.