It’s June, and we are continuing our conversation about the mid year review process for your small business. Those of you who follow online on the She Runs It group for women of color entrepreneurs may recall that earlier this year in January we did a deep dive into annual planning for your business and we took a look at a number of different areas where you could grow and focus your attention for a year. Of course now six months later is a good time to check in on how you’re doing. I get some of those goals and those expectations that you set for yourself. Now I know looking at an entire year of your business can seem really overwhelming. So today we’re talking about three concrete areas that you can focus on for your business.
Now, there are three key places for you to look at how your business is performing at the time of your mid year review. We’re going to dig into each of those three places and I’m going to get you some action steps, some to do’s to help you think of new goals and new benchmarks to set for the next six months of the year. This is something that you can do every year. You can even do some of these things quarterly or monthly to help hold yourself accountable to what’s going on in your business and the vision that you are creating day to day.
MID YEAR REVIEW OF YOUR FINANCES
The first area that we’re going to look at is your finances, the money. Many of you, I’m sure, are already saying “of course, Marie is going to talk about money. She always talks about money. Marie really loves talking about money”. And yes, all of those things are true.
Today though, we’re talking about kind of a quick checkup on how things are going with the finances in your business.
This means you’re looking at three main areas.
1. INCOME GOALS
The first one is looking at your income goals for the year. So many of you, again, if you did the annual planning tool and exercise, you set a big number for what you want it to make for annual revenue this year. Now is a good time to look at revenue to date. So just looking at the last 6 months, how is your business performing revenue wise? What did you bring in? And if you’re looking at your performance for the next half of the year, do you expect that you’re going to want to make just as much? more? or can you relax on some of your revenue goals for this year?
So revenue is the first thing that you’re gonna want to look at. It’s a nice way to see if you’re actually bringing in what you said you wanted to. And then of course, if you’re not, this is an opportunity to set some goals. How can you bring in more clients, more projects, additional revenue streams? What is it that has not gone according to plan so far this year? Of course, if you’re ahead of goal, then this is a good place to look at what’s going extremely well, what worked just as you anticipated or what’s working better than you anticipated, and how can you maintain that for the next six months of the year? That’s the first bucket.
2. COST OF GOODS SOLD
The second bucket when we’re talking about income and the money is looking at your cost of goods sold, so anyone who sells tangible products, this is where you’re looking at how much your raw materials cost.
Are there any opportunities for you to bring any of those down? And how are you keeping pace for those expenses for the year? If you budgeted a certain amount for the entire year, are you on target for 50% at this point? Are you slightly behind? Are you way ahead and you’re blowing through that cash too fast? That’s a good place to look as well for how your business is performing.
3. ADMINISTRATIVE EXPENSES
And the third area for your mid year (financial) review, of course, is your general administrative expenses. So this is looking at all the other operating expenses for the year. How are things going when it comes to your salary? Maybe you’re hiring contractors? Or you’ve got a coach or some additional training for yourself? Office supplies, rent, all of those other expenses, software . . . so looking at how you’re trending on some of those expenses. Are you on pace or are you spending too quickly at this point in the year?
WHAT YOU CAN DO TO CORRECT THE BOTTOM LINE
The reason that we’re looking at these three areas, your income, COGS and SG&A is because those are the three numbers that are going to impact your bottom line and your net for the year. This is where we’re starting to talk about your profit. So if any of those numbers aren’t on pace then we already know your bottom line for the year is not going to be on track. So take some time.
Then you can decide some different things in terms of actions. For more income, you can look at getting more clients, increasing revenue streams, or launching a new product to help impact those revenue lines.
Are you making the revenue that you wanted? Are you spending more than you anticipated? Spending less? And how is that going to impact your bottom line?
You could also raise your prices. There’s a lot we can do when it comes to playing with our income numbers. Now is the time of the year where you should decide what that strategy is going to be for the next six months. Same thing on the expenses side, whether that’s going to be your COGS or your operating expenses – the SG&A. Start determining, “well, how do I need to play with or change these numbers in order to still meet my bottom line?” If revenue stays static, that means it’s not going to change at all. In order for us to help that bottom line growth, then we definitely need to decrease some of the expenses on the COGS and SG&A side. So take a look at some lines that maybe you can cut back on: marketing, consolidating software expenses, limiting how much time or hours you give to your sub contractors?
Start thinking about how you can recoup some expenses. Maybe finding cheaper office space or not using so many co-working spaces. There are a lot of things that you can do to help impact the bottom line that way. Okay, so that’s my whole spiel on finances.
MID YEAR REVIEW OF YOUR SERVICES
Let’s talk about the next area that you can look at as part of your midyear review for your business and that’s going to be in your services rendered. So this one is another way to track. I’m a big fan of having measurable goals. SMART goals. If you’re looking at your business in terms of how many clients you want it to serve, maybe that was the measure that you said at the beginning of the year. Now’s a good time to check in and see, “Well, how am I doing on my client retention numbers? Do I have the number of clients served, or number of projects booked for this year that I said I wanted to and if not, what am I doing about that?”
So maybe you were coming in a little bit under, you don’t have as many clients as you liked. So now’s a good time to look at why that might be.
Is it that pricing wasn’t quite the right fit? Is it that your marketing efforts haven’t been up to snuff? Are you not doing enough discovery calls or follow up calls?
What is going on in your pipeline where maybe the services aren’t going out the way that you anticipated they would? And of course, if they’re not going out the way you wanted to, that’s definitely going to hit that revenue line. We know now if expenses remain static and revenue isn’t coming up to where it needs to be, then we’re going to have less profit at the end of the year. So start thinking about what you’re going to do to help boost your services rendered for the year.
This is where you can start thinking about the sheer number of clients you served. Also, the number of revenue streams, which I mentioned a little bit before. When it comes to income, I’m also looking at percent to goal or you at least halfway there for the numbers that you wanted for the year. Not there yet? How can we kick it into gear and multiply our efforts on the back end of the year?
Your mid year review is also a good time to look at the activities that you’re doing to help get new clients into your pipeline and to expose others to your business. This is where sitting down and really looking at your marketing strategy can really help change some of these numbers.
MID YEAR REVIEW OF YOUR MISSION
The third area that we’re going to talk about as far as your mid year review is taking a look at how you’re performing against your mission.
Now this one is really fun. I actually had a great experience doing some networking last week. I met up with a new friend/colleague who I met over a year ago. He had sat in a workshop that I did around business finances and he and I were just chatting it up, talking about new things. I was telling him about my course on Udemy and my Facebook group and all of these amazing things that are going on for me. And one of the things that he asked me was, well, how can I help you? How can I help you do what you’re doing? And I was a little bit blown by the question. Because I’m like, ah, well I don’t, I don’t know that there’s anything that you can do for me, which of course is not true. But this is where we’re really starting to think about, okay, well what’s my mission?
What is it that I’m actually trying to accomplish? Why is it that I’m providing the services and coming up with revenue streams and all of those things?
And oftentimes people will get caught up in the day to day of their business and then we don’t step back and look at why we’re doing all of this, right? The mission, the vision of the organization. And those of you who know me or have been poking around on the High Tides website, you know the mission and vision of this organization is to create and support generational wealth for communities of color. And the way I choose to do that is by offering public speaking, training and money workshops, and small business development consulting.
But that is all in service of a really large, large goal. So when someone asks, well how can I help you? Make sure you know the answer to that question because people will want to help you as you continue networking and building your business. And so make sure you’re understanding and are really clear about those access points. So when I think of the mission statement of my company, I go right back to you.
Make sure you have these access points crystal clear:
- My “I help” statement. If you don’t have an “I help” statement or you’re not clear what yours is or it’s still evolving, mid point in the year is a good time to revisit that, right? Is it crystal clear when someone comes to your site, when they look at your business cards or any piece of marketing material, who it is you help and how it is that you help them? Okay, so that’s one place to look.
- Look at your email signature. And Look at your business cards, look at your voicemail. Is it clear who you help and how you help them in all of those places so that people know how they can support you in your growth?
- The other thing you can do is take a look at how your activity has helped you fulfill your vision. So if I’m helping build generational wealth for communities of color, great. I had a whole bunch of public speaking clients this year. I had a slew of folks who came for coaching, executive coaching, but not as many who are leveraging the money coaching and financial coaching. So maybe that’s an area of my business where I can really bolster and think of other ways to get that content and information out into the interwebs and to the universe.
So those are the three areas for you to look for your mid year review.
First, take a look at your money, identify what came in and those two areas where money came out. What can you change to make sure you’re locking in that bottom line number?
Our second category is looking at services rendered: the number of clients you’ve served, the number of products that you’ve sent out. How can you impact that number? This is also going to segue nicely into looking at a marketing refresh for you.
And then finally, the last bucket is looking at how you’re performing against your mission and the vision of your organization. Are you clear about your “I help” statement and are others clear as well so that it’s very easy how people can access you and spread the word about what you’re doing to help your vision become a reality?
Alright, so those are my tips for a mid year review of your small business. If you have any questions, please, please drop them in the comments. Come see us over at She Runs It group because we will have a webinar on this topic later this month and I look forward to seeing you grow and blossom. All right, my friends. That’s it for now. Talk to you soon. Bye.