6 Big Mistakes that Small Business Owners Make that Can Lead to Struggle and Failure

In business, ignorance is not bliss. In the last three years of running my own business consulting practice and 20 years of advising small business owners, I’ve seen a trend of “mistakes” or challenges that small business owners face that cause them to struggle, and can lead to financial failure…these are mistakes I’ve made in my business as well. Most business owners are really good at their passion (their reason for starting their business), but very few have business management and finance training – they’ve never learned to run a business…I know I didn’t have that knowledge at first when I started my business, even with my seven years of business finance and accounting education and professional designation. But you don’t have to struggle like I and so many other business owners have…here are some tips to overcome the biggest small business mistakes that contribute to those struggles.

Mistake #1 – Failing to Plan

We all know the saying, if you fail to plan, plan to fail. Yet, strategic planning continues to be one of the greatest struggles for business owners. It certainly was for me when I started out. I knew I had to have a plan (I had the offer, target client and financial forecasts, but had no sales and marketing plan), but trying to work with business plan templates used to make me nauseous…that is, until I found a more intuitive approach to business planning. It starts with having a very clear vision of you business, what you offer, to whom, and WHY (WHY you’re doing your business – your mission, and WHY customers would buy from you)…I use visualization and meditation techniques to get this clarity. This is an iterative process, and while your WHY may not change much, your offers and target clients could change dramatically over the years. My only caution here is to not get caught in the planning paralysis trap…make sure you are taking action while you’re creating and refining your plans (results come from taking action and going through iterations, failing fast and getting back in the game).

Mistake #2 – No Clear Value Proposition and Ideal Client Experience / Process

The more targeted and clear you can be with who you serve and the results you create for them, the easier it will be to communicate that value and attract new high-quality clients. It’s easy to want to serve everyone, and not leave anyone out. While this “jack-of-all-trades” mindset can work for a little while, and while you determine what you’d really like to be doing, it can lead to a huge dilution in energy, focus and profits. It’s difficult to communicate your message to the masses in a way that anyone will actually hear it. It’s better to have a focused approach, targeted to a specific group…try it for 90 days…if it doesn’t produce the results you’re looking for, target a different group with a message designed to reach them. Again, this is an iterative process.

Mistake #3 – Not Tracking and Reviewing Financials on a Regular Basis

Most business owners are not trained and educated on organizing, tracking and understanding their financial numbers. In fact, less than 30% of business owners have a good understanding of what their numbers are telling them (couple this with the fact that 85% of business failures are a result of poor financial organization and know-how, it’s no surprise that so many businesses fail). Yet, the numbers tell the story of how the business is doing and can highlight problem areas that need to be addressed. As a micro or small business owner, at a minimum you’ll want to review sales, gross margins, major expenses that you can control the most, and profit margins. You’ll also want to look at balance sheet items such as accounts receivable (how much, from who and how long have they been outstanding), accounts payable (how much, when are they due), and balances in your bank accounts. Review your numbers on a regular basis (monthly is best), and get help to truly understand what your numbers are telling you.

Mistake #4 – Not Paying Yourself Enough

This is one of my favorite things to work on with clients. The traditional business model has been to pay the owner last, with whatever is left in profits after operating expenses. When you follow this model, you’re likely to get paid a lot less than you’d like (or not at all). While working with one client, he figured he was only paying himself $2 an hour for his efforts…you wouldn’t work for anyone else for less than minimum wage, so why work for yourself for such low pay. I like to take a bottom-up approach to paying yourself first and determining what sales you need to support what you want that pay to be.  Here’s how: determine what you’d like to pay yourself (based on your personal needs and lifestyle), layer in taxes, desired business profits and estimated operating costs, to determine what your revenues and prices should be. This approach works really well for service-based entrepreneurs, and I’ve developed a whole empowered pricing course to teach this method [email me for more info].

Mistake #5 – Trying to do it ALL Yourself

Some business coaches may say that you should turn your greatest weaknesses into your greatest strengths. However, this is not what 7+ figure business owners do…they capitalize on their strengths, recognize their weaknesses, and build a ROCKSTAR team to get done what needs to be done in the most efficient way possible.  Often we feel as entrepreneurs, we need to do it all ourselves/be jack of all trades…this can work if your goal/intent is to be a practitioner for life (i.e., steady contract work), BUT, if you want to grow and scale your business successfully, you need a good team to support you.

Getting help and building a team doesn’t have to mean hiring full-time employees, but it does mean you have to think about all the different functions in your business, what is within your zone of genius, and what makes sense to outsource. Create hiring criteria (whether hiring consultants or employees) and make it a priority to outsource and delegate what is not your genius so you can focus more on what you do best, knowing that the rest will be properly taken care of.

Mistake #6 – Not having a Governance and Risk Management Plan

Most small businesses have no governance/risk management plan, yet it is one of the most important aspects of business success. Governance and risk management may not be sexy, but ignoring this aspect of business could lead to business failure. Just think about what would happen to your business if you had a significant negative tax audit, or legal action from a customer or employee, or experience a major illness or disability. It’s necessary to identify all your risk areas (legal, tax, employee, operations, economic, health, political, social, technology, business interruption, etc.) along with potential costs should the risk materialize, then implement protocols for managing and mitigating those risks within your risk appetite.

The bottom line is, when you have a clear vision for your business, supported with systems, structure, protocols and people to help you achieve your true potential, all the pieces start to fall into place…and you’ll have more ease, confidence, peace and harmony in your business and its possibilities.

These are all areas that I work with my clients to overcome and create a strategic business roadmap for success, while working on shifting their mindsets and relationship with money and the financial side of their business. I invite you to book a discovery call with me to discuss your challenges in business and what actions you could take right away to overcome them. I also welcome you to join the CFO Mentoring community on Facebook to support you in being the CFO of your business and your life!

What is Your Mission?

It’s been a while since I’ve been woken up in the middle of the night with a spark of inspiration so great that I just had to get up and write it.

“It’s not about the number of days you’ve lived, but how well you’ve lived the days you’ve been given.”

I couldn’t go back to sleep.  The message kept repeating until I got out of bed and came down to the computer.  What does this mean – how well you’ve lived the days you’ve been given?  It is different for everyone.  But you can find out for yourself by asking these questions:  Why are you here?  What are you here to do?  If you had $100million, what would you be doing with your life?  What is your personal mission statement?

I’ve been reflecting on this myself for the last couple of weeks (perhaps this is why I woke up with this message – that it’s time to share this with you).  For me, I envision a world filled with joy and harmony.  My mission is to inspire, empower and assist people to have more joy and harmony in their lives, as I do so for myself.  I came to the realization of this mission about 10 years ago, at a time in my life that I was not having much joy or harmony in my own life – my job was making me sick; there was a lot of tension, anger, and resentment in my marriage; my baby kept me up at night; the closest friend I had lived 500 miles away; I had no hobby that filled me up.  It took adversity to wake me up, and I remember sitting in my basement office asking myself, why am I here?  What am I here to do?  What would I like my life to look like?

I still have the piece of paper I wrote it on…my personal mission statement:

  • To be the best I can be
  • To help people achieve their goals and fulfill their objectives through inspiration, motivation, education, and empowerment
  • To make people smile
  • To live each day with love and happiness

Then I started asking HOW…how could I do this?  Then new doors started to open.  A new job came, as did many personal growth (and re-membering) opportunities, and new relationships.  Creativity also began to flow again (that hadn’t flowed in over 10 years prior) with a new level of inspiration and empowerment, in writing inspirational poetry that has been published internationally.   And although I haven’t written much poetry in the last couple of years, I have not stopped writing to inspire, creating to empower, educate and motivate people to smile daily.  VisionSpire was not even a thought back then.  But 3 years ago when I decided to start my business, I began to imagine inspiring, educating and empowering people through my business.  At first, it was to inspire and empower joy by relieving tax stress…it has morphed into so much more.  And each day I ask, what contribution to joy and harmony for the planet can I be today?  What can I do to have more joy and harmony in my own life?

Each time I find myself faced with adversity or drifting off-track, I am reminded of my personal mission statement, and start asking “How can I do this”…doors open. 

You see, everyone faces adversity throughout their lives.  You can choose to let it get you down, to live each day complaining about what happened, about how hard done by you were, how much you lost, how crappy life is…wasting your days in self-pity.  Or you can rise up, and LIVE.  When you have a written personal mission statement, a vision for what you’d like life to be like, you will rise all the stronger and faster from each adversity that comes, and you will live your vision.

What is YOUR personal vision and mission?  What are you here to do?  How will you live the days you’ve been given?

What to do with Your Ideas

If you’re like me, then you have ideas coming into your head all day long.  And frankly, it can be quite distracting, contributing to the “squirrel syndrome” of chasing ideas and not getting things done on your daily list.  The question becomes, what do you do with all those ideas?

The answer is Vision and Focus.

When you are clear in your vision, in what you’re here to do, what your priorities are, it’s a lot easier to discern whether an idea has a place in contributing to that vision, or whether it should be released into the wind for someone else to pick up.

It doesn’t matter if you’re a business owner, employee, stay-at-home mom (or dad), we all have a greater vision for what we’d like our life to BE like, for what we were born to do here in this lifetime.  For me, that vision is a world that lives in greater joy and harmony that exists today.  Then you choose the vehicle for which you will contribute to that vision.

Until few years ago, my vehicle was a full-time job where I helped my team and clients reduce stress and anxiety over tax laws, allowing them to have more joy and harmony in doing their own job/business.  Currently, my vehicle is my business through which I inspire and empower people to have more harmony and joy with money and finances…which has a positive ripple effect into other areas of their life (health, relationships, family, community, contributing to their vision).  I do have another vehicle – one that involves meditation and writing.  With this vehicle, I inspire others to see greater possibilities beyond their current reality – one with more joy and harmony than they have today.

Just like the car you drive, that vehicle can change over time, but the vision doesn’t. 

So, what is your VISION?  What IDEAS are you generating that are in support of that vision?  And what ACTIONS are you taking to transform those ideas into meaningful contribution to your vision?

[author] [author_image timthumb=’on’]http://54.82.103.175/wp-content/uploads/2017/06/Linda-Spencer-Visionspire-cropped.jpg[/author_image] [author_info]Linda Spencer is a CPA, CA, Canadian Tax Specialist and Money Mindfulness Coach. Her mission is to eliminate stress and anxiety people experience around money and taxes, by empowering them with the tools, knowledge, strategies and mindsets that will put them in the driver seat of their business success and financial wellness, so they can have more harmony, joy and abundance in their life.[/author_info] [/author]

For more information on Linda’s upcoming programs and workshops, visit the Events page.

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.

Kick Start Your Year with Clarity and Focus

“Be INSPIRED to create what you imagine” (Linda J. Spencer)

Mondo nell'acqua dell'oceanoWelcome to a brand new year…time to kick-start your strategic action plan with clarity and focus!  Strategic business planning is essential for your business success.  Your business plan is like a roadmap – it gives your direction for where you want to go and how to get there with the most direct route.  A good strategic plan keeps you focused.

In November, I posted my 8 Steps to Building Your Road map to Success.  Over the next 8 weeks, I’ll dive deeper into what each of those steps are, and specific actions you can take to create your own road map to success.

So, where do you start?  You should start with the end in mind…this is Step 1 to creating your business success road map:  define and clarify your goals.

The key with defining the end result you want in your business is to get really clear about what you want and why.  Ask yourself key questions like:

  • Where do you want your business to go? What do you want to create with your business? and WHY? Write down your goals for the next year, 3 years, 10 years.  Really challenge yourself – Dream BIG!  Studies show that if you think small, you’ll play small – so think BIG and play BIG!
  • What would really make your heart sing to achieve in your business long-term?
  • What impact would achieving these goals have on your life? What would it mean for your family?
  • What are your SMART (specific, meaningful, attainable, relevant, time sensitive) stretch goals for this year? List your BIG revenue goals as well as things like the number of customers you want to serve and any new projects you want to launch / implement.  Don’t try to boil the ocean here, but make them big enough to excite you and be impactful…pick just 1 to 3 key things that you’ll focus on this year that will really pull your business forward to meeting your long term BIG objectives.  Chunk them down into key milestones, and add target dates to them.

With your goals for the next year clarified, you can now move forward with focus in making business decision and taking inspired action that is aligned with those goals.

Stay tuned for next week…I’ll get into Step 2 of creating your business success roadmap…the essential step of knowing where you’re starting from!

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