Have you ever felt like you’ve worked so hard and have nothing to show for it?
Um, yeah–– we’ve all been there.
The go-to solution for problems faced by small businesses: “If I just sell more this time around, I’ll make more”.
Unpopular opinion: the solution isn’t always- more sales.
Maybe that feels counter-intuitive.
Doesn’t more sales equal more money and a better business?
It’s actually not the end all, be all.
Today, we’re diving into the connection between the total sales and the effectiveness of each offer. It’s essential to evaluate this part of our business and identify any gaps that are costing us time and money.
When we think of growth, we automatically think we grow by selling more volume. So when we’re facing a cash flow problem, instinctively the reaction is sales. We try hustling even harder and racking up those sales.
This mindset is why so many second and third year entrepreneurs work tirelessly, get overwhelmed, and face burnout. Even when you love what you do, if you always feel like you need to give more and push harder, the joy starts to slowly seep out.
The reality is, if you’re not in tune with your numbers and are really busy, things fall through the cracks. If you’re spending too much time and energy or your expenses are too high, the more sales you have, the bigger the problem gets.
When it comes down to it, having more sales either amplifies what’s working or what’s not.
Which is it for you?
It’s easy to rely on doing the math in our heads, but our minds have a way of playing tricks on us. We might not be factoring in important details that all add up in the big picture of our businesses.
Let’s say you have a product based business––
Imagine that 2 years ago you started a candle company and figured all of your supplies, labor, and materials to make sure each candle was profitable. Then over the last year you upgraded the label, thought your customers would appreciate a more decorative vessel, and over time upgraded the wicks. Oh, and you were sick of running around town, so you hired a delivery driver.
The candles that were profitable 2 years ago may actually be losing a dollar without you even realizing.
So if you sell more candles, you’re losing more money than if you were selling less. It may sound crazy, but this actually happens all the time right under our noses when we do the math in our heads.
Over time, we all get exhausted by the early years of the hustle and often outsource so we can grow. If you don’t check back in with your figures regularly, you can easily work really hard and have nothing to show for it. We need to make sure that each decision we make within our businesses are supporting our bottom line.
Don’t think this is just a product business issue –– service based businesses can just as easily fall into this trap too!
If you have service based business, you might be charging an hourly fee for services and be running into the problem of lacking the hours in your work week to add any more clients to your roster.
If this is the case, then you would either increase your hourly fee or switch to a per-project payment structure that can make you more hourly. Just adding more clients will only burn you out.
Building a team is another factor that a lot of entrepreneurs feel pressure to grow too quickly. While outsourcing can be a great source of help and support, it’s very possible to not be getting a good return on investment in your hires. You might need a virtual assistant, not a online business manager. You might need a contractor for a few tasks, not another part-time or full-time team member.
It’s easy to make our decisions overly emotional or idealistic. While we covered the importance of the “Enjoyability Factor” of our business in our last post, there is a balance where we also have to think very logically to find our sweet spot.
What can you do about this?
Every so often you need a business tune up to keep things on track. I recommend checking in on these numbers Quarterly (at a minimum)– that’s why I created The Quarterly Critique VIP Day.
Together, we get to the root of a problems faced by small businesses and create a plan to create real change in your business.
If you’d like to get a taste of what we cover in my one-on-one intensives, check out the Finding Your Sweet Spot workbook that accompanies this 3-part series. This will walk you through some exercises to get you started on your path to building a sustainable, healthy, and long lasting business.