How Farming Prepared Me for Entrepreneurship

I spent the first 19 years of my life on a beef farm with my loving parents and 3 younger siblings in the Eastern Townships (QC).  It was a lot of hard work (and hardship) and simply our way of life.  Never once did I think of it as a business, with plans and strategies, and committed action to get desired results…until after I myself became an entrepreneur.  Even though I had years of education and training in accounting and finance, I realize now that growing up on a farm was likely some of the best training I could have for running my own business.  Here’s why:

1 – Farming takes dedication, resiliency and hard work, and a love for that way of life…it’s not for the faint of heart.  I feel the same for entrepreneurship.

2 – Farming requires a lot of planning and strategic action to achieve desired results in the timelines afforded by the changing seasons.  Running a successful business requires knowing your markets, having clear plans and taking strategic action to get the results you know are possible.

3 – You can’t run a farm successfully on your own – as in business, you need a good team.

4 – As a farmer, you need to build great relationships with your suppliers, your customers and your team members that fully support you in achieving your success.  This same is true in business.

5 – My family really loves what they do and puts so much love into caring for the land and each of the animals on their farm.  This love and compassion was instilled in me, and as an entrepreneur, I really care for my clients.  I love serving them and seeing the joy on their faces as a result of their transformations and the results they’ve realized from working with me. 

6 – Farming is a 24/7 job (at least the kind of farming we did)…you could be up before the sun and not get to bed until the wee hours of the morning (especially if it’s birthing season or maple season).  As an entrepreneur, I eat, breathe and sleep my business.  It’s an integral part of me, and often has me up into the wee hours of the night (especially when I’m in creative mode).

7 –  As a farmer, you need to be prepared for life’s curve balls (uncooperative weather, sick animals, illness, injury, economic set-backs, influences beyond your control) – having back up plans, risk management systems, and a good support system are essential to handling those curve balls with ease and grace.  These are also essential for success in business.

8 – Growing up, we had to make do with what we had.  That meant being really resourceful, thinking outside the box and finding solutions that required little to no money.  If it meant rolling up our sleeves, getting our hands dirty (and worn), and creating something out of nothing, we did it.  I’m finding this has become a great skill in the beginning stages of my business.

9 – My dad never seemed to stress if things didn’t go so well on the farm.  Sometimes SH*t happens – it is what it is…no point stressing over it…just assess the situation, learn from it, find a better solution and move on.  I’ve had many challenges in starting and growing my business.  Thankfully, I adopted my dad’s outlook on dealing with those challenges…otherwise I likely would have given up and gone back to a full-time job long ago.

10 – In farming, you really need good tracking systems and processes – whether it’s for your cash flow or your animal inventory (I saw my dad, and now my brother, tracking the cows and money almost daily – perhaps this is where I adopted my love and propensity for numbers, and why I became an accountant).  As an entrepreneur, you really have to know your numbers (sales, marketing analytics, financials, etc.) and what they’re telling you so you can make the right decisions for you and your business.

So there you have it – 10 ways that farming prepared me for running my own business…and I never really acknowledged or appreciated them until just recently.

So what about you?  What skills did you acquire from your childhood that maybe you haven’t acknowledged or appreciated until now? I would love to hear about them…leave your comments below.

If you would like to chat about how I can help you with growing your business, CLICK HERE to book a complimentary clarity call.

Know Your Numbers

In my 20 year career as a professional accountant and now business coach, I have worked and talked with hundreds of entrepreneurs.  I’ve seen many grow their business exponentially, and I’ve seen some fail.  Many entrepreneurs have told me they’re struggling to make ends meet.  When I ask them if they know how much money they’ve made and spent in the last 6 months, or if they have a plan, almost all of them say no…they don’t track their numbers (many handing over all their receipts for the year to their accountant at tax time), or if they do have their bookkeeping done, they don’t look at the numbers.  Many tell me that they don’t look at their numbers because they don’t know anything about finance, dealing with finance/money stresses them out, and/or they don’t have time.  This certainly backs up the statistic that over 85% of business failures can be attributed to a lack of financial planning and organization.

If you want to have financial wellness and abundance, one of the essential keys is to know your numbers and what to do with them so you can take the appropriate action in line with your business (and life) objectives.

If you don’t track and review your numbers, how would you know how you’re doing?  How would you know if the products you’re trying to sell are making you money?  How would you know if your marketing and sales efforts are paying off in profitable returns?

What numbers could you be tracking?  Literally, hundreds.  But here are some key financial numbers that every business owner should know and understand:

  • Cash in, cash out, net cash flow – What do you bring in, spend, and how much is left each month?
  • Collection rates – How long does it take you to get paid? Do you have policies and processes in place to ensure you’re getting paid on time (or faster)?  Statistics show that any money owed to you that is more than 90 days old likely won’t be collected.
  • Cash burn rate – How fast do you burn through your cash on hand? Typically, you want this to be 3 to 6 months.  It’s a fast track to failure if you don’t have cash to meet your next payroll.
  • Revenues – Are your sales increasing? Decreasing? Are you hitting your targets?
  • Product and Client profitability – How much money is each of your products/services and clients making you…you want to focus on the profitable ones, and let go of the ones that don’t make you money.
  • Gross margin and profit margin – Compare your margins to plan and industry averages – how are you doing? Do you know how much sales you have to make for every dollar you spend in order to have the profits you’d like to have?
  • Capital spending and Return on Assets (ROA) – What are you investing in your business (and do you have a plan for this)? Are the assets you’re buying making you money?
  • Cost of client acquisition – What is it costing you to bring on a new client [=total marketing costs/# new clients]?
  • Return on investment (ROI) – Are your investments making you money, and how much? You can look at this not only from actual investments in stocks/funds/etc., but from every expense line and every effort you make. For example, you may want to know the ROI on your investment in your learning, investment in marketing and advertising efforts, or investment in people.

Whether your focus is on marketing, sales, productivity or profits, you need to track the appropriate numbers and review them on a regular basis to make sure you’re on track with your plans.  By looking at your numbers, and understanding their story, you can then identify the money/productivity leaks and opportunities on which you can take action to grow your business and your profits.

Every person has the opportunity to have financial wellness and abundance.  The difference between the 30% of the population who thrives financially, and the 30% of the population that struggles to survive, is that those who thrive have a plan, track and review their numbers, and take inspired action to grow their net worth.

Your numbers tell a story.  They tell you where you’re making money, where you’re losing money, and whether your efforts are paying off.  Do you know what story your numbers are telling you?

If you would like to empower your financial wellness and abundance, and get to know you numbers better, I can help.  Drop me a line and let’s talk.

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[author] [author_image timthumb=’on’][/author_image] [author_info]Linda Spencer, CPA, CA Certified Money, Marketing & Soul Coach [/author_info] [/author]

Weath Creation

Small Business Model for Success – Make Your Profits Flow

wealth-creationAs a small business owner, you wear many hats – one being that of Chief Financial Officer (CFO).  Being the CFO of your business does not necessarily mean being your accountant – in fact, I highly recommend hiring someone to do your bookkeeping and financial reporting for you (i.e., the collecting and reporting of results).  As the CFO of your business, you are instead focused on strategy, planning and operating your business to maximize your profits and cash flow, and your financial value.  You have a big picture vision, so you look at your financial plan, forecasts, budgets and results from 30,000 feet, and analyze those results in context of your overall business objectives and strategies, asking “what if…”  You determine what your results are telling you, and make strategic, financial and operational decisions accordingly.

So, how do you do build a business model that will allow you to maximize your cash flow?

This is step 5 of my 8 Steps to Building Your Road Map to Success – create your strategic operating and financial plan (if you missed the previous steps, click HERE to go to see previous posts).  As a small business owner myself, I like to keep it simple – first by building a profit model that allows you to create fluid and sustainable profits and has these key characteristics:

  • is intuitive, flexible and has flow
  • allows for creativity and innovation
  • is scalable and has multiple layers that allows you to easily and fluidly up-sell, cross-sell and down-sell between the layers of services and packages
  • focuses on 2-3 things that you do really well, and
  • allows you to continuously dip into your well of opportunity, to connect with the people entered your world at various levels and give them the “what’s next”.

Always with your core business purpose and ideal client in mind, the key is to set up your business model and services/packages in a way that allows you to maximize every opportunity to its full potential.  Start with your platinum service level that will bring you top dollar and platinum client, then your entry level service that will allow people to connect with you for little investment, and then fill in the middle with a couple of gold and silver level offers that will engage and create momentum with your clients.

Ultimately, you want to maximize your profits, so when you create your business profits model with the different layers of packages/offers, you’ll need to run the numbers.  This is what gets scary for a lot of people, especially creative types in my experience (as a creative myself – I write poetry and design jewellery for the everyday occasion – I can empathize.  But I also have a very analytical mind that allows me to help bridge the gap for other creatives in building their business models for success.).  But without knowing your numbers –  the cost of inputs (including what your time is worth and overheads), capital requirements, desired profit margins, projected unit sales and break-even points – you may find yourself struggling to make ends meet.

When clients come to me for assistance with their pricing and what to charge, I have found that every one of them has undervalued what their time is worth and how much time the spend developing, marketing and delivering their products and services, leading them to charge to low a price.  This results in lower profits and having to work even harder for the revenues they do collect, leaving them cash and time poor.  With my easy pricing model, I then show them how to quickly determine what their time is worth and how to price each of their packages and services to create maximum value.

This is just one of the things that I will be showing participants at my upcoming workshop on February 29th in Milton.  If you want to know how to easily charge what you’re worth and price your packages and services for maximum value, then you MUST come to the workshop!  Click HERE to secure your spot and get all the details.

 

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[author] [author_image timthumb=’on’]http://54.82.103.175/wp-content/uploads/2015/10/linda-contact-e1447279259479.jpg[/author_image] [author_info]Linda Spencer is a Creator, Visionary, Business Coach and Savvy Canadian Tax Specialist. Linda believes that NO ONE should have to struggle to create the life of their dreams. This drives her to empower business owners with the knowledge and tools they need to gain insight and clarity into their business strategy and to take inspired action to streamline their processes, improve their cash flows and reduce their stress levels, such that they can more easily create the life of their dreams. With 20 years experience helping businesses with their financial, tax and business plans, managing tax risk and advising on Canadian corporate, personal income tax and sales tax matters, Linda combines her expertise and knowledge with her intuition and creative abilities to arrive at sound tax and business solutions. She is also known for successfully leveraging cross-functional teams and creating efficient processes that translate into tangible business results. Discover how you can create more ease and flow in your business at www.VisionSpire.ca (formerly www.LindaSpencerTaxConsulting.com)[/author_info] [/author]