It is a common struggle for most small business owners to move up from the five-figure to six-figure revenue in their business and oftentimes, they can’t seem to move out of a revenue plateau being experienced in their business. As business owners you need to be able to pivot and shift in order to create space to move up the next level.
Listen to this episode and learn from Annette the three shifts necessary to create the needle mover in your business.
Here are a few insights you’ll hear in today’s show…
Three Shifts to Move from a 5-figure Business to a 6-figure One
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Starting and running a small business can be both exciting and challenging. Whilst many entrepreneurs dream of making it big and generating six figure revenues, the reality is that most small business owners do actually struggle to make it to this level. However, with the right mindset, strategy and execution, moving from a five figure annual revenue business to a six figure one is entirely possible. And that is what we are going to speak about in today's episode of the Financial and Lifestyle Freedom Podcast.
Hey, everyone, welcome to this week's episode of the Financial and Lifestyle Freedom Podcast. For those of you that don't know me, my name is Annette Ferguson, I am CEO of Annette and CO, a UK based accounting firm. I'm a chartered accountant certified Profit First professional and small business growth strategist. And we help business owners take home more money from their business for them and their families to enjoy through a mixture of accounting, profitability and tax management strategies.
In today's episode of the Financial and Lifestyle Freedom Podcast, we're going to speak about three shifts to move from a five figure business to a six figure one.
3 shifts to move from a 5 figure business to a 6 figure
Shift #1 - From Doing to delegating - Why is there a need to delegate as the business grows?
So let's just jump in to shift number one. From doing to delegating. One of the most significant shifts that small business owners need to make to move from a five figure annual revenue business to a six figure one is to move from doing everything themselves to delegating tasks and responsibilities to others. In the early stages of business, it's not uncommon for the business owner and founder to wear multiple hats and take on all aspects of business from marketing and sales to customer service, admin and finance.
However, as the business grows, this approach becomes unsustainable. And the business owner needs to focus on their core competencies and delegate other tasks to employees or contractors. Delegating tasks allows business owners to free up their time and focus on the critical areas of the business that generate the most revenue.
It also allows a business to scale up and take on more clients, which ultimately leads to an increase in revenue.
But of course, if you are deciding to take on help and support, you do need to have a profit plan in place, a financial forecast in place to ensure that the numbers actually work for your business. Because this is where many people go wrong, is that they decide they need to delegate, they take on someone but they don't actually crunch the numbers before they do and they end up in a situation where they can't afford the person they've taken on.
So make sure that you work up that forecast and profit plan before you do this, to understand what it means for your business. And to make the shift and start delegating, you need to identify the tasks that you can delegate and the skills and qualities that you want to look for when hiring or outsourcing to contractors.
You need to be prepared to invest time and resources in training and mentoring employees or contractors and ensure that they perform the delegated tasks to the required standard. This is another issue that many people have when they first start working with other suppliers, is that they don't set aside the time that is required to train up other people to operate at a high standard in their business. So make sure you factor that in, as well when you're thinking about taking on support.
Shift #2 - Moving from reactive to proactive - What is the difference between the reactive and proactive approach?
Now shift number two is moving from reactive to proactive. Another shift that small business owners need to make to move from a five figure annual revenue business to a six figure one is to move from reactive to a proactive approach to your business. A reactive approach is one where the business owner responds to challenges as they arrive, focuses on putting out fires and fixing problems. And while this approach can be effective in the short term, it's not actually sustainable in the long term and can prevent you from growing your business.
In contrast, a proactive approach involves anticipating challenges and opportunities and taking actions to prepare for them. This approach means that you will be proactive in your marketing sales and operations and have a clear strategy and plan for your business. To make this shift, you need to take time to assess your business's strengths, weaknesses, opportunities and threats, so good old SWOT analysis that you might have tried to do in corporate. And using this information to develop a clear strategy and plan. You need to monitor your business's performance closely and be willing to pivot or make changes to the strategy as needed.
Shift #3 - Moving from transactional to relationship-based approach - Why is it important to consider a long-term relationship with customers and clients?
And shift number three, from transactional to relationship based. The final shift that small business owners need to make to move from a five figure annual revenue business to a six figure one, is to move from a transactional to a relationship-based approach to your business.
A transactional approach is one where the business owner solely focuses on closing sales and generating revenue without really in reality, considering the long term relationships with customers and clients. And whilst this approach is effective, and actually necessary in the short term, it's again not sustainable in the long term and can prevent you from creating a loyal customer base.
In contrast, a relationship based approach involves building long term relationships with customers, focusing on delivering exceptional customer service and creating a positive customer experience. To make this shift, business owners must focus on building strong relationships with their customers, understanding their needs and preferences and providing personalized solutions. You could also invest in creating positive customer experience from the first point of contact to post purchase support and be willing to go above and beyond to exceed customer's expectations.
To conclude, moving from a five-figure to a six-figure business means moving from doing to delegating, from reactive to proactive, and from transactional to relationship-based. Once you start getting some of these things ingrained into your business, you will be able to focus on increasing your revenue to where you want it to be.
Thank you so much for tuning in today to the Financial and Lifestyle Freedom Podcast with me, Annette Ferguson. If you enjoy today's episode, I have two requests from you. The first is please do subscribe in whichever podcast player you happen to be listening in today. And the second is please do also whilst you're there leave us a review. Reviews are the ways that other amazing business owners find this podcast and can benefit from its content. So it means a huge amount to us if you are able to also leave us a review. It shouldn't take more than 30 seconds. Thank you so much for tuning in again and until next time.