Linnea Blair :: Advisors On Target

Author Archive for Linnea Blair

Business Goals…what Business Goals?

Posted by Linnea Blair on

01/15/2024

Happy New Year! Here it is January again…already! Maybe you were going to spend time over the holidays planning for your business and what you want to accomplish in 2024. For some of you, congratulations! you got it done and are already implementing your plan for the new year.

For others, I’m guessing that planning time went by the wayside and now you’re belatedly reorganizing yourself to start your annual planning process.

It’s never too late to stop and plan for the rest of the year. It’s important, and it’s worth it! Remember the old saying “If you aim at nothing, you’ll hit it every time.”

First, though, it’s vital that you spend time visioning. What do you want your business and your life to look like in 3 years? Write it down. This will help you determine what you need to accomplish in this one year to position yourself for realizing that 3 year vision.

From there, you can start to build a detailed plan for 2024. I’ve created a 3 Step Guide to create your 2024 Profit Plan that will help you work through the process.

Why do I call it a Profit Plan? It’s because I want you not only to grow your business, but to grow your profits as well! If you have a solid plan, it will help you to:

Achieve your top line sales goals.
Hit your profit targets (even more important!)
Figure out how to add infrastructure to your business (people, physical assets, marketing, technology to name the big ones.)

If any of those reasons are things that are important to you, go ahead and get my complimentary Profit Planning Guide here to get started with your plan.

If you stay in touch, you’ll hear more me in the coming months on topics like this. Here’s to your success in 2024 and beyond!

Categories : Business Planning

Tags : Business Planning, Business Strategy, Profit Plan

Best Time to Make a Business Budget?

Posted by Linnea Blair on

11/08/2021

When is the best time to make a business budget?

I like to start planning in Q4 of my business year for the upcoming year. For most business who are on a calendar year, November is a great time. If your business operates on a fiscal year, then the month before the last month of your business year.

As a business coach, November is the month I coach my clients to start working on their Profit Plan for the coming year, which includes their Financial Plan, Hiring Plan and Marketing Plan. Its before the holiday rush and after the busiest season for many home improvement contractor businesses.

It’s a good idea to work through a vision and goal setting process first so you can be clear on where you want to go and how you want to grow in the next year.

I also suggest reviewing and reflecting on the current year that is nearly over to evaluate how your business performed in comparison to the goals you set a year ago.

Armed with that information, you can now embark on your planning and budgeting process for the coming year.

If you’ve missed doing your planning by the end of the year, the next best time is the very beginning of the year on which you are embarking. But, by doing your planning before the end of the current year, you can hit the ground running right after the new year with your plan in place.

For more information on budgeting and profit planning, download my Profit Planning Guide here.

Categories : Financial Management

Tags : Busget, Business Finance, Finance, Financial Management, Profit, Profit Plan

Budget your vacation?

Posted by Linnea Blair on

10/18/2021

I just got back from a 17 day vacation! Yes, seventeen whole days away from my business, on a road trip through five states. It was a fabulous experience! I loved visiting many National Parks and National Monuments and spending time with family. One of the extra good things about it though was that I had budgeted for it in advance. I made a big payment to my credit card when I got home and paid for the whole vacation.

I’m a huge advocate of an annual budgeting process for businesses. For many years, I’ve had a budget projecting income and expenses for my business. The business budget allows me to accurately project my personal income so I can make sure my personal budget works.

For a long time though, I’ve not been doing a great job at budgeting for vacations. I’d have a vague idea of an amount that I’d like to have for a vacation budget, but it’s been mostly aspirational. When it came down to it, I’d put most of my vacation on a credit card and then hope to pay it down soon. In my real world, that didn’t happen.

The last couple of years though have been different! I’ve learned to apply the “pay yourself first” model and used some ideas from the book Profit First by Mike Michalowicz. Not only do I put a percentage of gross income aside for taxes and charitable contributions, but I also put aside a percentage of each month’s income for vacation savings.

So, when I started planning my recent road trip, I budgeted an amount that made sense to me for lodging, food, gas, and entertainment. I also budgeted for several other shorter getaways that I had planned for this year. My vacation savings grow each month so by the time I was ready to start booking lodging, the funds were there waiting.

When I tallied up what I’d spent on the recent vacation, I was within $200 of my budgeted amount for this trip. Not a bad overage on a 17 day odyssey, especially when I consider that there were some Christmas gifts for family in the mix.

I had to share this with you in hopes that you will also find it helpful for your personal and business budgeting. It’s great it you can take two weeks away from your business, but if you can have it paid for in advance, that’s even better!
Here’s to your success!

Categories : Uncategorized

Tags : Budget, Business Planning, Finance, Financial Management, Profit

Know Your Numbers – What does it mean to you?

Posted by Linnea Blair on

10/28/2020

I often talk about the importance of “Knowing your Numbers”. But what does this really mean?

To start with, many business owners are not sure what their financial statements are telling them, or even how to make sense of those reports your bookkeeper sends you every month.

A lot of business owners feel a little embarrassed that they don’t know more about their financial results or how to tell if their business is profitable and solvent from looking at their Profit & Loss and Balance Sheet. I’m here to say, it is OK. You are on a path to learning. You don’t have to be an accountant to understand your numbers, but as a business owner, it serves you well to get some help to get clear on what you don’t know.

Here are some important things to think about:
You know what income and expense drive your business, right? I know you do because you’re a savvy entrepreneur.

You need enough sales to hit your revenue goals.
You need materials/resources and labor to produce or sell your service.
You need other expenses to keep the business running, like marketing, rent, utilities, auto, insurance etc.
You need to pay yourself a living wage, and you want to show a profit so you can reinvest in growth.
You need to have enough cashflow to pay the bills and cover debt payments.

Your financial statements need to help you make business decisions by showing you if you are on target with your planned income and expenses, and profit!

So how do you get there?
First you need a good layout and chart of accounts to be able to track the things that are important to track.

Second, you need to know that the information going into to the reports is accurate, so you need to have a detail oriented person recording your transactions in QuickBooks and that data needs to be reconciled with your bank statements and credit card statements every month.

Now, you have the foundation to move forward to not only analyze your results, but to do some real Profit Planning based on known data.

I offer Profit Planning classes and business consulting to help you move your business to the next level of growth and success. Feel free to contact me anytime.

To help get you started moving in the right direction, click here to download my free Best Business Practices Guide.

Categories : Financial Management

Tags : Business Finance, Finance, Financial Management, Financial Statements, Profit & Loss, Profit Plan, QuickBooks Tips

Best Business Practice Guide

Posted by Linnea Blair on

10/20/2020

Do you run your business using best business practices? You probably have a feel for some best business practices if you have been in business for a while. But chances are you are paying attention to some areas more than others.

Over the years that I have worked with small to medium sized businesses to help them grow, not just in terms of top line and bottom line revenue, but also in terms of running a more professional business, I’ve developed some guidelines in several key areas for what I call an “On Target Business”.

Characteristics of “On Target” business owners: They spend time working ON the business, not just IN the business. In other words, they spend time in strategic planning and implementation on a regular basis. They are leaders who have a vision for themselves and for their business over the short and long term. They are known for their integrity in dealing with customers, employees and business partners. They are accountable to their own goals and to what they’ve agreed to do for their company. They apply best business practices. They are growing personally and professionally. They are committed to excellence in the products or services they provide. Finally, they have an extensive network of business contacts, referral partners and advisors.

I’ve identified 5 key areas for business owners to focus on in growing a more professional and sustainable business: Leadership, Finance, Administration, Marketing & Sales and Innovation. For each of these, I’ve included statements that indicate best practice activities and results in each area.

If you’d like to receive my full 5 page Best Business Practices Guide entitled “Put Your Business On Target for Success”, just click here.

Categories : Business Strategy

Tags : Best Business Practices, Business Planning, Business Strategy, Key Performance Indicators, KPIs, Leadership

3 Persuasive Reasons to Create a Profit Plan for your Business

Posted by Linnea Blair on

10/07/2020

You may be surprised to know that many businesses don’t have an annual budget in place, or I as I prefer to call it: a Profit Plan. Now, what I call a Profit Plan is a bit more detailed than just an annual budget, but we’ll get to that.

I recently spoke with a business owner and I was pleasantly surprised to hear him tell me that he had his budget all worked out for the year. Further into our conversation however, it transpired that while he had listed all his expenses for materials, rent and other overhead costs, marketing, salaries and so forth listed out, he had not included his revenue projections!

What is a budget? The simple definition is an estimate of income and expenditure for a set period of time. A budget or profit plan includes both projected revenue and projected expenses.

Why should business owners like you have a budget? Here are 3 persuasive reasons:

Achieving your top line sales goals
If you don’t know where you are going, you could end up anywhere. If you are shooting for a specific target, you are more likely to achieve it.

It’s not enough to say, I’m planning to double my business next year, or increase my business by 10% or achieve $1 Million in annual revenue.

How is that Million going to happen? Chances are that you don’t have the same goal for each month, so to just divide $1 Million by 12 does not necessarily make sense unless your monthly revenue is relatively steady month in month out and you are only projecting a small increase for the coming year.

What happens if you have a seasonal business? There are bound to be slower months and busier months. You’ll need to project income and expenses accordingly.

What if you are planning to double your business in the coming year? You’ll need to account for a ramp up from where your business is now to where you project you will be next year, and plan accordingly for increased marketing and additional staffing. You may need to add additional infrastructure in terms of office space, vehicles, or equipment.

Planning ahead by making a Profit Plan or budget will also help you to see where you might need to infuse more capital into the business in the form of loans or Lines of Credit.

Hitting your profit targets
It’s important to hit your revenue targets, but it’s even more important to achieve your profit targets. Creating a budget will help you project your profits, so you can evaluate if your plan will achieve the bottom line you need and desire. After all, those profits are necessary to provide additional compensation to shareholders/owners (you!) as well as to provide capital for future growth, repayment of debt, etc. By the way, it’s a good idea to create a personal budget, so you’ll know how much you need each month from the business in terms of salary and draws or distributions.

Adding infrastructure to your business
As your business grows, you will need to invest in more infrastructure. This may take the form of adding overhead personnel, for example a salesperson, administrative support, or a supervisor. Other types of infrastructure could be leasing an office or shop (or increasing the size of your facility) or investing in additional equipment, vehicles, or technology.

Creating a budget allows you to try out scenarios to see if your revenue projections will support the investment in overhead. You will also want to plan your marketing strategy (and create a marketing budget!) to support the revenue goals you’ve projected.

As you can see, there are many reasons why it makes sense to create a budget for your business. Beyond being sensible, it really is important to do annual strategic planning for your business. Your Profit Plan/budget is an important piece of your annual strategic plan.

Want more? Download my free best business practices guide here.

Categories : Business Planning

Tags : Budget, Business Finance, Business Planning, Business Strategy, Profit Plan

Planning for Growth? Make sure your Marketing Strategies are really working!

Posted by Linnea Blair on

01/31/2020

As I review many profit plans/budgets with my clients this year, it is evident that most are planning for some growth and many are planning for significant growth. Of course, there are many factors that go into achieving that growth: Effective marketing and sales to bring in additional work, enough of the right people to produce the work, appropriate capitalization, and the strategies, systems and monitoring to ensure that the additional work is profitable.

One of the Four Ways to Grow your Business, simply put, is to get more clients. To do that you usually need to increase or improve the effectiveness of your marketing efforts or improve your sales close rate – or both.

Do your advertising and marketing efforts really boost sales? Are you getting the best returns from your marketing budget by targeting your media and your audience? Or are you just taking a shotgun approach and hoping for the best?

If you don’t have a system to measure the results of your advertising, then you’re probably relying heavily on guesswork. And you probably aren’t getting the best bang for your marketing buck. You’ll only know for certain if you measure and track the results of your marketing strategies.

Remember the adage ‘What you can measure you can manage’. If you can measure the results of your marketing, you can assess just where advertising is really boosting your sales – that is, where you earn multiples of each marketing dollar you spend.

You may object that it takes too much time and effort. There is some justification in that view. You run a small business, and you may not have a lot of time or resources to operate complicated measurement or tracking program. But fortunately, there are some simple techniques for assessing your advertising return on investment.

These vary according to whether you measure advertising that has been focused on a particular service and designed to get a sale in the short term, or whether it was designed to work long term, influencing buyer attitudes towards your business and building a certain image.

You can use coupons, postcards or ads that correspond with special offers and then test the response. You can test ad response through hidden offers of the type, ‘Mention this advertisement and get 15 percent off’, or ‘Call this number for more information.’ Or you can use trackable link or phone number in your offer. If you record the number of inquiries, you can get some idea of how successful the ad has been. You can also run two versions of the same offer through a ‘split-test’. Each version would carry a slightly different offer and you could record which one got the most responses. You can also keep records of sales of advertised and related items in the days or weeks after an advertisement.

Measuring attitude marketing takes a little more stamina. You will be tracking many different strategies for marketing and brand awareness including not only print or other media advertising, and direct mail, but your signs, website and internet marketing, networking and any other methods you are using to promote your company.

You will need to track the results of a number of marketing campaigns over a period of months by keeping up-to-date records on a monthly basis to track the number of leads, bids, sales as well as the dollar value of the sales from each of your marketing strategies. I use a Sales Tracking Template built in Excel that I developed, or you may be able to get the information you need from a CRM (assuming you are using it effectively). This will allow you to compare sales year to year and judge the individual and cumulative effect of your marketing campaigns.

Start tracking your marketing success now for this year, and you will be able to fine-tune your plan going forward to use your marketing dollars wisely and increase your return on investment.

Categories : Marketing

Tags : Business Strategy, Marketing, Marketing Strategy, Small Business

3 Tips to make Strategic Planning easier

Posted by Linnea Blair on

01/24/2020

Strategic Planning often conjures up the thought of something big and daunting that we really should be doing every year, but somehow it just doesn’t happen. And, while yes, I do suggest that you ultimately do put aside time each year to do a day long comprehensive planning session, you don’t have to put off strategic planning entirely until you have the wherewithal to make it happen, easy access to the information you need to review, and the buy-in from your management team if you have one.

Do what you can
It’s important to do something rather than waiting to make it perfect.
If doing a full-fledged annual planning session with your team seems daunting right now, at least take an hour or two this month to get away to a quiet place and really think about where you want to take your business in the next few years. Considering that, what would make sense for where you can take it this year that would support that?

To keep you on track and focused, commit to set aside one hour every week to spend in some aspect of developing your plan and action steps you will take. This hour is the most important thing you can do for your business, so put it on your calendar as a recurring appointment and don’t let anything interfere with it. Turn your phone and email off during this hour. Let your family and team know what you are doing at this time every week and why it is important.

Make it simple
The easier you can make it, the more likely you are to do it, and succeed!
Write out your 3 to 5 Year Vision for your company in simple terms. Then drill down this Vision into a Plan for this year. What is your Revenue Goal? How does your Marketing Plan need to change to achieve it? What people do you need to achieve it? What system or infrastructure changes are needed to achieve it?

I suggest choosing no more than 2 to 3 goals to work on for the year. Break your goals down into quarterly initiatives if they will take longer than 3 months to achieve.
I love the simple structure laid out in the book Traction, by Gino Wickman. There are several free tools that you can download from the author’s website that are helpful, but the main one I suggest using is his Vision/Traction Organizer.

A budget that lays out your projected income and expenses for the year is also a helpful exercise to make sure your plan is financially feasible. I offer an easy to use, reasonably priced budget template.

Keep your focus
Keep your goals in front of you and you’ll be more likely to achieve them.
In the first step, I suggested setting aside small, regularly scheduled times for planning. In the second step I suggested writing down your plan using some simple tools. The third step is focus and persistence. Keep your goals and plans where you can see them. Review them at least weekly when you have your planning time. Set action steps for each week that will help you move toward your quarterly initiatives and check in with yourself to make sure you’ve accomplished the action step.

If you have trouble keeping your focus, get help. A member of your team, a colleague in your industry, a Mastermind group or a business coach can all help you to keep moving forward.

There are many books, tools and strategies for success out there that you can tap into. Ultimately, you are the most important factor in your success. One of the simplest things you can do to ensure success is to distill your goal for this year down to one specific sentence that describes clearly what you want to achieve, and then read it every morning and every night to keep your focus on it.

Here’s to your success in 2020!

Categories : Business Planning

Tags : Business Plan, Business Planning, Business Strategy, Entrepreneur, Small Business, Small Business Coaching, Strategic Planning

Paying yourself last is not a strategy for success

Posted by Linnea Blair on

01/16/2020

How Much to Pay Yourself and How

Paying yourself last is a strategy to get by, not a strategy for success.

Many small business owners end up paying themselves by what’s left over at the end of the month after other expenses are paid. That way, you often end up with a big swing in your monthly take home pay, with some months being very lean and some months being fat. This may work for a young single person with a more flexible lifestyle, but doesn’t work so well for the small business owner who has a family and a mortgage who needs more stability.
Besides, you started a business to make a good living, right?

Start with a plan
Everyone who knows me knows that I coach every business owner to create an annual profit plan or budget. Why is this so important? Creating a detailed annual plan that shows your projected income and expenses for each month helps you to see if what you are setting out to accomplish is reasonable to achieve, and if it will produce the results (profit and cash flow), that you need to compensate yourself appropriately, and invest in growing your company.

What’s an appropriate amount for owner compensation?
First, it starts with your needed and desired personal income. Do your personal financial planning and budgeting, so you’ll know what you need each month to provide for your personal lifestyle. Beyond your normal monthly needs, you may also have a desired income amount that you’d prefer to bring in from the business for investments, travel, etc. It’s important to know these numbers and to factor them into your budget/profit plan for the year.
Not every similarly sized business will have the same number. Your personal financial needs and desired income are your own. One business owner with a $600,000 business may be satisfied with $90,000 in compensation, while another needs $200,000. The business model and structure, not to mention future vision, may look very different for these two individuals.
Make a plan to pay yourself at least the necessary amount to meet your monthly personal income needs each month. Just like you pay your employees on a regular basis for their services to the company, you need to pay yourself. Then you can plan to pay yourself extra amounts in your most profitable months to make up the difference between your necessary income and your desired income.

Best Practices
I have a metric that I like to use called Net Operating Profit before Owner’s Compensation. I believe that 20-25% is a good result for most contracting businesses between $300,000 and $3,000,000 in revenue.
Out of this profit comes the owner’s compensation. In the middle of this revenue range, about 15% – 20% of revenue is reasonable for owner compensation. For example, at $1,000,000 in revenue, this would amount to $150,000 – $200,000 in owner’s compensation. A higher percentage is needed for the lowest revenue range to produce an adequate living compensation, and a lower percentage is needed for the higher end of the range since there is a larger need for bigger companies to invest in growth and infrastructure while still compensating the owner well for his or her investment in the business.

Methods for paying yourself
There are different requirements for how to take owner’s compensation from your business depending on what your legal entity is. It is a good idea to consult with your business attorney and tax advisor to understand the tax laws regarding how you take compensation, and to make the best decision for you.
Typically, if your company is an S-Corporation, you need to take a “reasonable” salary as a W-2 employee and then take the balance of your compensation in draws or distributions, while LLCs and Sole Proprietors usually take their entire compensation as a draw. There are tax ramifications for each, so be sure to consult with your CPA.

The real bottom line is that you started a business to create a better life for yourself, and usually that better life includes a comfortable level of compensation that enables you to live the lifestyle you desire and to provide for your retirement. Achieving this takes vision, planning and implementation of your strategy to grow a profitable and successful business, however you define success.

Categories : Financial Management

Tags : Business Finance, Entrepreneur, Financial Management, Owner Compensation, Small Business, Small Business Coaching, Small Business Consulting

Plan for Profits in 2020 – Free Webinar

Posted by Linnea Blair on

01/10/2020

As a business coach, I encourage my clients to engage in strategic planning for their businesses on a regular basis. Most businesses have an idea of the goals they would like to achieve for the year, but many don’t translate those goals into a blueprint for how they are going to achieve them.

As you begin a new fiscal or calendar year, it’s time to take stock. What have you achieved in the past year? Did you hit your targets? What do you need or want to do next year to achieve the next steps toward your 3 year vision for your business?

It’s time for a profit planning session. Let’s say you want to grow your company by 20% in 2020. Where do you plan to get the additional business? Will you need more infrastructure in terms of people, processes or equipment to make it happen? How will your marketing need to increase or change in order to realize your plan?

Once you’ve answered those questions, it’s time to put a detailed budget together that will guide you on when you need to start taking action on marketing activities or hiring that new employee.

Need some help getting started on your Profit Plan? Attend my free webinar on Creating your 2020 Profit Plan on January 23rd at 1 PM PST.

Categories : Events

Tags : Budget, Business Strategy, Profit Plan

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Author Archive for Linnea Blair

Business Goals…what Business Goals?

Best Time to Make a Business Budget?

Budget your vacation?

Know Your Numbers – What does it mean to you?

Best Business Practice Guide

3 Persuasive Reasons to Create a Profit Plan for your Business

Planning for Growth? Make sure your Marketing Strategies are really working!

3 Tips to make Strategic Planning easier

Paying yourself last is not a strategy for success

How Much to Pay Yourself and How

Plan for Profits in 2020 – Free Webinar

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