The Female Fusion Podcast!

Show transcription

[INTRO] Hi there. I'm Jen Blandos, the founder of Female Fusion Network. I've been an entrepreneur for over 20 years with experience in building seven figure businesses and working around the world. Originally, I'm from Canada, but I've been living in Dubai for the past 14 years. I've created this podcast to share my insights and expertise as a global entrepreneur and help other women start, build, grow, and scale their businesses. You'll also hear from some of the world's top experts and female entrepreneurs who will inspire and motivate you to achieve your business goals. So join me as we explore all that the world has to offer and build the business of your dreams. Let's get started. 

MAIN EPISODE
[00:01:01] Hello. So here we are, the start of a new year, 2023. I don't know about you, but I am so excited to kick this year off. I have a feeling that In Business at 2023 is going to be the best year yet. But in order for us to really have a great year in business, we need to be able to have a plan. 

[00:01:29] But before we can go and put together a plan, we need to know where we currently are. And one of the things that I find when I speak with other business owners is oftentimes they're not working to a plan and they're really, really busy doing lots of different things and saying, I'm so busy I don't have time to focus on a plan. But do you know, one of the things that I have found as a business owner and look, I've been there as well in the past 20 years. I've had several periods where I've just been so focused on delivering work, creating proposals, basically managing the business that I haven't taken the time to review what's happening in the business and to be able to create a plan. And what I have found is when that has happened, that those have been the worst performing periods within my business. 

[00:02:27] So even though I might have the pressure, if I have a business where I'm having to deliver products or services to clients or customer, I have realized that I need to take that time to slow down, to speed up. So if that sounds like it's something that resonates with you, that if you're so busy in your business and you don't actually have the time to plan, I would highly recommend that you do make that time, that you do take a day or two days out of your busy schedule to come up with a plan for your business for the future. But before we come up with a plan, we need to know where we're starting from. So what I'm going to do is I'm going to talk you through how you are going to be able to review your results from the past year. Now, if you're listening to this, in 2023, it would be reviewing your results for 2022. 

[00:03:24] If you're listening to this later in the future it would be whatever year we are in, looking at the previous year or the previous months. So the first thing that I would always say to people is how was your year? How did it go, what worked and what didn't. Now this is a really practical thing that we should all be doing. We should be looking at what worked in our business. 

[00:03:48] What were we really happy with and what went really well and what didn't go well and why didn't it go well? Because when we have clarity on that and we know what wasn't working, we can decide how we are going to go and change that. So what would you be able to improve on in your business if you were to look at that? We can't have everything perfect in our business. There are all things that could be a little bit better as well. 

[00:04:19] So a great way to get started when you're doing your review is to look at what went well, what didn't go so well. But the next thing we need to do is we need to talk about money. Because we're not in the business of having a charity, we're not in the business of having an expensive hobby. If we have a business, we need to make money and we need to make a profit. But many businesses, especially in the first year, you're not going to make a lot of money, that's okay. 

[00:04:52] But what is really good is to get into the habit of knowing how you can manage your money, how you can plan and budget within your business. So when your business does start to grow, that you're able to have that structure behind you. So when we are reviewing how we did in the previous years, we need to know how we did financially. Now, before I go into detail talking about that, I want to make sure that we are all on the same page. And to be on the same page, I want to clarify a few terms when it comes to financing money for businesses. 

[00:05:35] Now, you might already know these or you might not. So we will use the term revenue or turnover quite a bit when we're talking about money in our business. And that is basically all the money that you bring into your business, whether you're delivering a product or you're delivering a service. That is all the money that lands in your bank account that you are selling. Okay? 

[00:06:01] Now the other thing we're going to talk about is costs. And the first one is direct costs. So direct costs are going to be those costs that you are going to incur to deliver your product or your service. Now that is going to be things like the cost of materials. If you have a product, it could be technology, it could be customs fees, it could be packaging. 

[00:06:26] These are basically costs that you have to deliver your product or service. Now it can include staff, but only if they are working casually and they're people that you bring in and out to deliver a specific product or a service. Now, we also have something called overhead costs. Now, those are the costs that we need to pay whether we earn money or not. So if you look back when we had the pandemic, this was a big challenge that a lot of businesses faced is that all of a sudden you went from being very busy and having lots of business to no business. 

[00:07:07] And where businesses suffered and struggled is that they had overhead costs. And even though they weren't having the money coming in, so they weren't having that revenue coming into their bank account, they still needed to pay money out of their bank account to pay for things. So that will include things like if you have an office, it could be your rent or your utilities. It would also be things like your company licensing or registration fees. It could also be as well subscriptions to online tools. 

[00:07:38] So if you pay for your subscriptions annually, it will be Canva or Microsoft Office, any of those sorts of things. So if all of a sudden you had no money coming into your business, you would still have to pay those. Now, if you have a monthly subscription for some of those things, it's quite easy to go and cancel as well. The other thing that's an overhead cost is your employees. So they're on your payroll. 

[00:08:08] You have to pay them every single month whether you have business or not. So your employees will be part of that as well. You sometimes hear these referred to as operating costs as well. The other thing too that we have is liabilities. So liabilities are the money that you would owe to the government. 

[00:08:29] So one thing that I see that happens sometimes with business owners is that until they get used to running a business and understanding all of these tax issues, that sometimes you see the money coming into your bank account for VAT or for GST or your corporation taxes and you see that that is extra money in your bank account. But the thing is that is money that you are collecting on behalf of the government. So that is a liability and that is never money that you should be spending. The other thing as well is with most businesses around the world, except for very few jurisdictions, you will also have a liability for a corporation tax. So if you have a really good accountant that they will be able to tell you what your expected liability will be for your corporation tax. 

[00:09:27] Now, when it comes to profit, we have a couple of types of profit that we need to know about. One is your gross profit. So you will hear this spoken about a few times and gross profit, what that means is it's your revenue. So all the money that you're bringing in to your business, minus all your direct costs to cover the delivery of your product or your service. So do you remember when we were talking about direct cost, that those are the costs that we have to pay for to deliver a product or service. 

[00:10:02] So let's say that you're an events company that you would end up calculating your gross profit, calculated based on the amount of money that you would spend to put on an event. Or it would be the specific amount of money that you would be spending to cover the cost of creating a product. And that would cover things like customs fees and shipping fees and the cost of the product and packaging. So all of those calculate your gross profit, but that does not give us the final profit in our business. So our net profit is the company's total earnings. 

[00:10:40] So how we get to that is we subtract the cost of our goods sold minus our overhead costs, minus our liabilities, and this is the money that we have left over after all of the expenses have been paid. So that is what we get to when we get to net profit. So when we are looking at that within our business, those things we need to be really clear on. So when we are auditing our business, we want to be able to look over the past year about what our direct costs are. So what are all of those costs that we have had in our business? 

[00:11:21] And I want you to go and write those down so that will give you a really good idea of what you are spending. The other thing as well is you want to also go and look at your overhead costs. So that is every single overhead cost that you have in your business. So these are things that you need to pay for or not. Whether you have business or not, you still need to pay them at the end of every month or at the end of every quarter. 

[00:11:50] So I find when we're reviewing how we did in the previous year, it's a really good practice to list down every single thing that we're paying for and that we have a liability for. And what's interesting as our business grows, that we sometimes find that we have things that we're paying for that we no longer need. So you might find too that this could be a really useful process for you as you go along with your business to see what you're spending your money on and see if you're able to save costs in any other area as well. Because we love to be able to save costs. Okay, so now that you've looked at your direct costs, your overhead costs, what I would like you to do with as much information as you have as possible is try and identify how much you have spent month on month. 

[00:12:46] And what I do is every month is I look in detail about what my revenue is, what my direct costs are, what my gross profit would be after looking at my direct costs, so what it would cost me for that, I would look at my indirect costs, my liabilities. I would also as well leave some money aside to pay myself a salary. As an owner, we want to get to a point as quickly as we possibly can in our business without damaging our business to also be able to allocate money to pay ourselves a salary, whether it is a very small amount or a larger amount, it needs to be something that the business can afford. But we want to be able to pay ourselves a salary and then to be able to look at that for every month on what our net profit is. So if you can, I would say every single month, go through from the previous year and break down all of those costs, look at your revenue, take away all of those costs that you incur within your business and see what your monthly net profit is. 

[00:13:58] Now, what's really interesting with this is when you start to track things like this, you're able to see some trends and this is going to help you with making better business decisions over the next coming year. So once you have looked at the money side in your business, the next thing I would like you to do is look at where you are spending your time. And it sounds really simple, but many times we are spending way too much time on certain areas of our business and not on others. Now remember, the goal of our business is that we want to make money, right? We are not an expensive hobby, we are not a charity, we are a business and we want to be able to make money. 

[00:14:45] So I would recommend that you download an app or you sign up for a program on your computer called Toggle. It is toggl and the website is Toggl.com and you can also find the details in the show notes. So don't worry about writing this down. But the great thing about Toggle is it allows you to track where you spend your time in your business. So I recommend maybe every quarter or every month, if you're able to do that for a week, go and track where you are spending your time. 

[00:15:23] Because this lets you know what areas of your business has your focus and doesn't have your focus. And you want to be able to look at specific areas in your business. So you want to be able to look at how much time you're spending on admin, how much time you're spending on just the general running of your business. Now that will be things like the compliance area, dealing with the government on certain things. Maybe also as well you need legal support, maybe you need to do certain other sort of areas around that with the actual running of your business. 

[00:15:59] 
I find personally for me, I probably spend five to 10 hours a month doing that just to make sure that my business, Female Fusion Network is compliant in every area. It can take up a lot of time and especially when you get around renewal time or tax return time, that you can end up spending more time as well. You also want to look at areas like marketing, PR, social media also, how much time are you spending servicing clients? If you have clients, what about working on the strategy of the business? Do you spend any time on that? [00:16:37] How much on finance? Is it something that you're doing directly? Is it outsourced? Even if it's outsourced, are you spending time with that person that you've outsourced it to? How about HR or people management? [00:16:50] Whether you have a team or if you have outsourced areas or if you have a virtual assistant, how much on tech? And that will be things like getting your systems and automations right updating your website. How about other areas as well, like sales, new business, customer service? So this is really useful for you to be able to look at all of this in your business and see where your time is being spent. Because sometimes it actually might surprise you that you're spending more time in some areas and not enough time in others. [00:17:25] And what we want to be able to do is to be able to work on our businesses, not so much in our business because that's what is going to allow us to grow. But the other area that I think is useful too is to look at how much time we spend personally too. So if you can use toggle maybe also use it too to evaluate your time personally. So on the weekends, in the evenings, and look at how much time you're spending with family, with friends, maybe at home, do you have to do chores like cooking, cleaning? Or do you have a helper? [00:18:01] Who helps you with that? How much time on health and wellness? I think when I speak with entrepreneurs and I know myself as well, that I maybe don't spend enough time in the gym and exercising and getting out is what I would like, especially as you're building and growing a business. And that needs to be a priority as well because if we're not healthy and well, eventually our business is going to suffer. And I had that happen previously, back in 2012, I was diagnosed with breast cancer. [00:18:35] And absolutely, I think one of the reasons why I was is I was drinking eight cans of Diet Coke a day and I was working 70, 80 hours a week and just absolutely exhausted. So it is, it needs to be a priority. And I'm going to do an extra podcast episode on this as well where we talk about that. But also things like how much on travel, how much on education or personal development or just doing what we want. And it is important that we are taking good care of ourselves. [00:19:09] And so when you audit your time, it gives you a good reflection about where your time is being allocated, how many hours per week you're doing in work. And it's really useful if you can write this down and look at the areas you're spending your time on. Now what I do every and I do this about every quarter because I am quite busy and I am quite organized in how I do things. But what I will do as my business grows, priorities change, right? And so what I do is I will look in the business and go, right, what do I love? [00:19:47] And I just have to keep doing it. So for me, I love creating. I love showing up. I love doing live streams, I love speaking at conferences, I love meeting our members. I do also enjoy as well doing some of the writing and coming up with new ideas for content for our members. [00:20:08] I love traveling and meeting our members around the world and meeting other experts. So those are all things that I want to keep doing, and those are priorities for me. And that really helps me run the business and focus on the business. But then sometimes as well, we have things that we dislike and maybe we don't even need to do. And I found that a few times in the business that maybe I've been doing a few things that actually, when I look at it, nobody really needs. [00:20:43] It doesn't really add a lot of value. And maybe 5 hours a month. My time would get spent on that. And actually, I can just get rid of it. I can stop it or delete it and not do it. [00:20:55] And I'm sure all of you will find that within your business, that there will be certain things that you want to stop. And the other thing, too, that I'd like to look at, and we talk about this a lot in Female Fusion Network is what can we automate? If there's a system, if there's a way that we can automate it, do it. Because this will save you so much time and so much money. And this is something we worked on a lot over the past year in Female Fusion Network, and it feels really heavy to start with. [00:21:27] And you just feel like, how is this going to help? How is this going to drive forward my business? But actually we noticed, and I've noticed after the past year, that all of the automations are really working and it's saving us hours and hours and hours every week. So anything you can automate, even if it costs you a little bit of money and it saves you time, think about other things that you could be working on within your business and also to look at what you can outsource. So typical things in a business that you can outsource. [00:22:01] One of the first things that I outsourced was my books, my accounting. So I got an accountant right away, because I knew that I needed an accountant, and it wasn't my zone of genius and I didn't like it. I knew how to do it, but I didn't really like it. I don't know if you're at all like me that if it's something I don't like, it actually takes me longer to do, because I don't enjoy it, and I don't make it a priority. And I procrastinate, and it's quite an important area. [00:22:31] So finance got outsourced first. Many people outsource their marketing and PR. Some people might do copywriting, maybe it might be website development. Any of the things that you feel in your business that could help you spending more time in your business, outsource it. If you can afford it, or start outsourcing a few tasks, and you'll find that it will save you the money, that you will be able to do more revenue generating activities yourself. [00:23:00] Now that you are clear on your numbers, you are clear on where you are spending time within your business, what I would like you to do is use the SME dashboard. Now, I have shared this with you in the show notes, and this is a tool that we use within Female Fusion Network, and so many of our members use, and they're finding it's really helping them track the progress of their business. So the SME dashboard is in a google sheet, so you are able to go and customize it exactly for you and your business, and you can track whatever you want. So, for example, in Female Fusion Network, we will track things like the number of members that we have. We will track the size of our email list, we'll track the size of people following our facebook page, the number of people in our facebook group, number of people following the business on LinkedIn. [00:23:58] We'll also look at things like if we're doing a campaign, we might look at things like the amount of press coverage that we've had, or speaking opportunities that I've had, or media interviews that I've done. And then we look at the revenue and we look at the profit. And what is really interesting, and why I want you to get into the habit of doing this all the time is that month on month, you can start to see trends. So if you have the data from the previous year, go in and fill it in for every single month of last year. Because what you'll start to see is you'll see some trends, you'll see that some months you did really well, other months you didn't do so well. [00:24:40] Now maybe you know why you didn't do well in those months. But it's really good to document that and for you to look at that and go okay, I didn't sell much in July and August, why didn't I sell much? What do I need to do to get my sales up? Or did something happen? So, for example, in 2022, our revenue was pretty consistent, but we had a few months where the revenue dipped, and I would say the revenue dipped by about 30%, and there were some reasons for that. [00:25:15] One was that I was quite sick for a few months in 2022. And I noticed that when I had COVID very badly in June, I wasn't able to show up, I wasn't able to do anything. I was in bed for more than two weeks that I noticed that our revenue took a hit, because I think there was the expectation that people wanted to see me, whether it was face to face or it was online, and I wasn't there in the business. And so that showed me as well, that I needed to have better systems to empower my team more, to empower other people, to do things and not rely on me. Because if your business is just relying on you, that can also be a bit of a risk as well. [00:26:01] And it's frustrating for you, because you don't want to be the only person all of the time, because it makes it difficult to have a holiday, makes it difficult to be sick, like I've had as well. So this is one thing as well that I saw that became a priority for us in the business, and we've been doing a lot of work around that as well. So you're able to customize the SME dashboard exactly how you want for your business. But what I would say is that you want to get into the habit of filling it in every single month. So I actually block out my calendar at the beginning of every month. [00:26:42] On the first, I set aside 2 hours every morning, and all I do is review the previous month. So you got to do what works for you. But I almost make it like a bit of a game, right, that I want to make sure, because I'm highly competitive with myself, that I always do better than I did the previous month. So if that's something how you work as well, make it a bit of a game, push yourself, think about what you can do to increase your profitability month on month. And it also helps you as well to be able to look at trends. [00:27:19] So when you have filled in that SME dashboard for your business for 2022, I want you to look at your trends. So I want you to look at when you sold the most in your business and what was the reason for you selling that in your business during that period? What happened that you sold the most, but then also when you sold the least in your business, what was the reason for you having those slower sales? And what are you going to be able to do to change that? The other thing I would say too as well is to look at what the most profitable area of your business is and why, and also what's the least profitable area of your business and why is that? [00:28:07] And if you have an area of your business that isn't making much money, is that an area that you want to continue with? So for example, maybe you realize that it's just not profitable. Maybe you need to make some changes to it. Maybe you need to go back to the drawing board. Maybe you need to do a bit more research and look at ways that you can make it more profitable. [00:28:32] But when you fill this in, don't just fill it in, don't just fill it in to make it look nice. You want to actually be able to take that information and take some action with it as well. So when you have done that, that is a really great way for you to be able to review where your business has been and for you to be able to take some direction with your business. Now, what I would say as well though, is you're going to look at it and there's some areas that you are going to be so, so happy with and then there are going to be other areas that you'll feel really disappointed with. But I want you to remember that this is entrepreneurship, right? [00:29:19] We have our highs, we have our lows. But one thing that I think probably universal for most entrepreneurs, and maybe even with women, we do it a little bit more. That we are so busy looking at what's next and how we can grow bigger, how we can offer other things that we don't take the time to celebrate us. And so what I would say to you is that when you have looked at how you performed for the previous year, celebrate, you celebrate what you have done. Because there has been some great things that you have done over the past year. [00:29:56] And really recognize that and give yourself a good pat on the back and maybe even as well take yourself out for a treat to go and celebrate. It doesn't have to be expensive. Maybe some people might want to treat themselves to time at a spa, other people might want to go for a walk down at the beach or the forest or whatever makes you happy or spend time with your kids. But give yourself that time away from your business to celebrate. Or if you have a team to even do a bit of a celebration with them. [00:30:28] Because being an entrepreneur is hard work. And we have to remember that not a lot of people are brave to take the decision that you made to set up a business. And you should be so, so proud of that and so proud of what you have created. And. Celebrating. [00:30:50] That gives us the motivation to carry on because we have a whole year ahead of us. And if we take the learnings from what happened in the previous year and look at our business and how we can change our business, that gives you the strength to move forward for the next year. And it helps you to create a roadmap for the next year. So don't just look at the SME dashboard and say, this looks really pretty. Look at those areas. [00:31:21] Look at how you can make those changes and get yourself into the habit of tracking your details every single month. It has to be part of your habit. You need to be able to do it. And then when you meet your goals, celebrate. So I am so proud of what you have achieved in 2022 because owning a business is huge. [00:31:49] Jumping into the world of entrepreneurship is huge. So be proud of yourself, be proud of what you have achieved and go forth and absolutely smash the next year. You can do it. [00:32:11] Thanks for listening to this week's episode of the podcast. If you feel stuck in your business and frustrated that you're not making the money you want to, why not take Female Fusion Network Business Profitability Quiz? In this two minute quiz, you'll find out what your number one block is to making a profit and get sales, a minitrading video and PDF download with steps to put into place right away in your business. You can take the quiz and find out more in the show Notes and on Female Fusion Network.