Today I'm chatting with the founder Fiona (Fi) Johnston a Chartered Accountant who is all about impact, and no bean counter. Fi works with purpose led business owners to make sure they make a big impact and a healthy profit. She helps business owners to make better business decisions by creating business plans, financial forecasts and with regular check ins. Her clients, which include The Digital Picnic, Project Rockit, Arlo and Co and more, all come to her by word of mouth because she truly makes a difference to the people she works with. I love this chat because it's such an important conversation for us to be having on a regular basis!
There are so many epic business owners out there fronting incredible businesses. They're killing it on their socials, showing up in all the right places, and it looks like all is rosy. But when you look under the hood, things really aren't looking so good. They're not profitable, cash flow is strained and they're having trouble scaling. The most surprising thing for many business owners is that your business will eat the most cash while it's growing. So right when things feel like they're going well, the bank account will be running low. Unless you plan for it.
Get familiar with your numbers
Spend some time reviewing your current position, see what's changed in the last few years and give yourself a few pats on the back. We can't change what we don't know, and being overwhelmed just doesn't serve you. The three main reports for you to review are: Profit and Loss, Cash Flow and Balance Sheet. Don't outsource your bookkeeping too early, and spend fifteen minutes a month looking at your financial reports. The more you expose yourself to it, the more sense it'll make.
Check your money mindset
Most of us are walking around with a whole load of beliefs about money that aren't true. They come from our parents, past employers, conversations from our past, the media, and “society”. It's important to get clear about what those beliefs are, sense check them, and develop new beliefs about money that serve you.
Grow Your income
There's only two ways to increase your income: the price you charge and the number of times you charge for it. You get to decide which of those levers you're going to pull, and the clever ones are pulling the price lever. The best part of increasing your price? Your ideal clients win. They get better work, better customer service and a more intimate relationship with you. Because you're not running around like a mad person doing more work than you need to.
Pricing for Value
Think about your product or service for what it is: value. Then think about your income as an exchange of value – i.e. I do this for you and you will pay me x value in exchange. When we think about what's truly valuable to our ideal clients we can charge for the value that we create for them, and everybody wins. If you want to earn more, start by creating more value and then charge for it. Blowing your customers away with the value that you bring is the key to a successful, sustainable business.
Review Your Business Model
There are so many ways to grow and improve your business. You can have staff, or contractors, grow your product mix or streamline your product mix. Getting the pieces of the puzzle together makes a huge difference to your business. I love the
Business Model Canvas tool and it can be applied to any business.
Profit First – Getting Started
I'm a massive fan of this book, and most of my clients are using this system to manage their cash flow. Once you get the system working you'll be using the money in your business bank account to guide your business decisions. So many business owners spend money on things their business doesn't need, and if they haven't planned for the costs that are coming they're heading to a world of stress. Getting a handle on your expenses by categorising them as: critical, growth, nice to have, is a great way to get clarity. You only spend money on nice to haves when things are going well, you spend on growth when that's part of your plan, and your critical costs are non negotiable. Cash is king and the absolute truth.
Make a plan
You are so much more likely to be financially well if you create a plan to get there. Start by setting targets for your income and make sure that you know how you're going to hit that goal, not just what the goal is. You can also set up a target for your expenses (%), profit $ and profit %. Make sure that you're allowing enough budget for things that are coming up, or to grow your business if that's what you're doing, and have a profit target to work towards. Make sure that your plan allows you to reach the impact that you're aiming for. And that plan better include paying yourself, because that is absolutely non negotiable.
Review and Finesse
Just like you do with your marketing, your finances need to be reviewed and recalibrated. Healthy businesses track their progress towards their goals every month, allowing them to tweak and finesse as they go. The best way to motivate yourself is to show yourself that you're making progress.
Curate a Profit Mindset
Profit is what happens when everything in your business is working. When your prices reflect the value that you offer, and your team is effective, and your brand is attracting, and your marketing is hitting the right people, and you're managing your spending? You'll be profitable. I work with purpose-led companies, and it's a real mindset shift to value profit as much as you value the impact you're making. Because without profit your business will die. And we want it to be well, so you can make your vision a reality.
Cultivate Intention
Creating profit takes purpose. Intention. And my mission is all about teaching business owners to bring intention to their numbers, and get them profitable. Especially the ones using business as a force for good. When you put effort and consideration into your numbers, and be intentional about what you're trying to achieve, you'll be rewarded. Cultivate time away from your business and rest, as a vital part of earning a profit from your business.
LINK TO ADDITIONAL CONTENT MENTIONED IN THIS EPISODE
Links TO CONNECT WITH FI
In this video masterclass, I'll share the three key areas you need to focus on to scale your business and build a bold brand so that you attract the client that want what you have!
