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In this special episode of the Fearless Business Podcast, Robin gives his listeners an insider into how he manages all his finances and capacity at Fearless Business and offers advice on how you can do the same.
In this special episode of the Fearless Business Podcast, Robin Waite gives his listeners an insider into how he manages all his finances and capacity at Fearless Business and offers advice on how you can do the same.
Throughout the six years Robin has spent working as a business coach; he has noticed that many entrepreneurs typically tend to avoid dealing with the financial aspects of their businesses and often hand it to a third party such as an accountant. Of course, this isn’t a bad practice; outsourcing is an excellent way to free up time within your business. However, Robin believes the best way that business owners can improve income flow within their business is to get on top of their numbers, here’s why.
As mentioned previously, many entrepreneurs tend to hand over all their accounting duties to a third party and review them when necessary. Robin believes that all entrepreneurs need to track their accounts at least daily. This can be done through using accounting software such as:
These accounting tools allow you to overview your ingoings and outgoings and provide a quick financial snapshot of your business.Too often, many entrepreneurs leave their earnings until the last minute, enhancing their chances of not taking home as much as they initially thought. Through knowing what you are paying out regularly, you can start to instigate a profit-first mentality where you pay yourself first rather than quarterly whilst having all your financial allocations in mind. This way, you can confidently predict the amount of profit and losses you’ll be making within a financial year and base business decisions on that.
So, why are people so apprehensive when it comes to knowing their numbers?
Feeding into what was said previously, Robin believes that this is because entrepreneurs leave it too late to review their profits and losses. Instead, they base their business decisions on what has occurred previously rather than what is going on currently. Many people also fall into the habit of making abrupt decisions impulsively without acknowledging the long term ramifications.
Biting the bullet and having an updated awareness of your finances helps you in the long term. It enhances your ability to make coherent decisions, increasing your personal confidence within yourself and your business.
Ultimately, money is stressful. But hiding your head in the sand is only going to make it worse.
First of all, what is a lead and lag indicator?
How can lead and lag indicators and formulas help entrepreneurs generate more income within their business?
The answer is found through measuring capacity. The magic formula Robin uses within Fearless is the 70,10,2 formula as discovered by Google Think. In a nutshell, the formula translates that for every 70 conversations instigated, ten appointments will be made, and two will eventually become sales. So, by using the 70, 10, 2, formula entrepreneurs can review their current outreach methods and determine whether their process indicates a lead or a lag.
This will eventually help the entrepreneur re-evaluate their whole business structure, leading to business growth opportunities. They can then determine the amount of time needed to hit their goals and what they’ll need to invest in to help them achieve them.
Typically, the entrepreneur will find out that they need to double down on their activity. Of course, the service they provide may be the best quality, but how is their dream client going to know about it if there’s a competitor out there who’s overshadowing them?
Using the 70, 10, 2 formula, you can also determine how much your actions will create profit for your business.
For example: let’s say that your service costs £5000 and your conversion rate is 20% (1 in 5 clients). Divide the £5000 by five, and you get £1000, so you know for every call that you sit with a client that will generate you £1000.
This can serve as a great motivator when things get tough, as you know that the time you are putting towards your goals is worth it.
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