In the midst of this global pandemic, there is alot of information being shared about how to help entrepreneurs navigate their finances. But there are a few questions that are not being asked. So we are going to dive into how to look at your finances like a CEO.
No, I am not knocking accountants
I have nothing but love for accountants. I have a pretty amazing accountant who works with my business. He’s helped me ramp up a lot of things that I didn’t know. Things I could never have figured out on my own like payroll, deductions, etc. There’s always something that you can learn.
So please know I have nothing but love for accountants.
But you want to dive in deeper than your daily finances
You want to dive into the bigger question. How does a CEO make decisions about their business? Alot of entrepreneurs look at their books on a daily basis.
- I have money in my business.
- I don’t have money in my business.
- I am hoping to get this contract.
- I might not have this contract.
We often make decisions on a very short term basis. But I want you to start diving in and thinking deeper—even in the midst of this global pandemic and uncertainty.
Are you thinking day to day or your larger goals?
You have to start thinking about this question.
Am I making decisions about my finances like an accountant or am I making them like a CEO?
I want you to get comfortable with more than what you have in your bank account. I want you to think about it from different perspectives and scenarios.
The CEO has to think about both the long term goals, strategies. and vision of the company. But they also need to help the company execute things on a day to day basis.
The first question we often think
Oh crap Malla. I don’t have enough money for the next 30 days. Or I did save some but can only last for two or three months. I don’t know what I’m going to do after this time. Instead of panicking, I want you to think like the CEO.
Think about three scenarios.
First scenario [04:20]
The first scenario is the one that’s probably the easiest. This is the worst-case scenario about how you’re going to navigate your next steps. This is at the bottom completely falls out. You can’t find a way to pivot and earn new money and you’re thinking I got to make some drastic cuts.
Second scenario [04:48]
Scenario number two is a little bit trickier. If you weren’t in the middle of a pandemic, what are the top three services that you would prioritize? Think about the stressors that people are dealing with. Hone in on the top services that people really, really, really need right now.
You can start positioning and focusing on those ideas. If you normally would charge a couple of hundred dollars an hour for the service and you worry that people don’t have the ability to pay right now, create a smaller offering. I for example, normally do coaching packages over a couple of months, and am focusing more on monthly packages.
This scenario will get you excited. In the midst of this pandemic, I’m hearing examples of entrepreneurs getting creative. They’re getting real scrappy, and they’re finding ways to serve their customers. It is probably very different than what they used to.
Third scenario [06:35]
Often when we first get our businesses started, we have a grand vision of what we want to do. But that big idea makes it easy to get stuck in the weeds.
- What do I have to put on business cards?
- What do I need to have on the website?
- What legal structure?
Those are important things to think about. But a lot of times we miss out on the vision that you have for your business. But I’m betting that big vision could lead to new solutions. Ideas that your customers could use right now. You might have to get over creative. But they would be very helpful!
How do I test the third idea?
Don’t spend time creating a complicated website to promote it. Put up a one page landing page. Don’t spend a ton of time trying to figure the exact language. Share it with friends and family. Get feedback right away. But really focus on what is the solution is that people need most.
- Scenario #1 – Absolute worst case.
- Scenario #2 – Ideas of how to bridge if people can spend some money
- Scenario #3 – What are the new solutions.
My story and your next steps
Start laying the groundwork for things that can serve you later on. For example, I had no idea what I was doing when I created my blog. But I started. It was a down period where things were slow. The content from that blog helped me pivot to where I am today online.
It’s also helped me get speaking opportunities. Or training/facilitation contracts. You can leverage your work once businesses start humming again. Don’t be afraid to dream big. It might seem scary. Lay some of the groundwork now where you need to think bigger about.
Another tip for thinking like a CEO about your numbers
What did you earn last year? Look at the last couple of months. Or look at however far back you can look. You are probably missing something. Analyze the patterns in your business.
When you are in the day to day, you are not paying attention to the trends. You can’t see them.
For example, if you get business through word of mouth, how many networking events do you need to attend? How many business cards have to go in people’s hands before you land in your client?
Start trying to figure that out number. It might be tough. But start asking the question.
I started tracking my social media engagement a few years ago and was surprised at how it helped me better understand my marketing.
What were the posts that got the most number of comments?
What were the post that got the most number of shares?
These are the topics I need to speak about more. Provide more solutions. This is a no brainer for service businesses. It’s creating metrics. It’s about creating numbers for your business.
Start asking tough questions
How much do you need to spend on your marketing so that you can land more sales? Numbers will not lie. It may take you time to get there and figure it out. Don’t worry about getting it perfect. Don’t worry about feeling uncomfortable. When you start asking that question, you will find people and resources to help you solve the answers.
Start thinking about your money like a CFO. Because if you really want to actually grow your business, if you want to see things move forward, you’ve got to understand how do the numbers in my business help me make money and how am I losing money? That’s a question that a CEO thinks about.
You will need to think bigger picture. You want to know when I spend $2, on this type of marketing, I’m going to earn $10 as a result. And if you haven’t already, dive into your money story. Dig into the emotions of how you spend. Earn. Save. It’s about the childhood stories that are probably affecting your patterns now.
Your business is only going to grow as large as you believe. So own it. Step into it.
Am I thinking about my money on a day to day perspective or am I stepping into my shoes of being a CEO?
So I hope that this podcast will be some questions and some ideas to really dive into think about and really delve in more. You guys tell me, send me feedback, ask me questions, shoot me emails and tell me what made a difference for you? What questions do you still have, and be willing to kind of explore in this uncomfortable space for a bit. It’s actually okay. I mean, I shared with someone recently, you know, you’re kind of upset that your plan right now didn’t work?
Well, guess what? No one’s plan works right now. So I don’t care how good your 2020 strategy might have been. This is one of those curveballs we all get to kind of start back over again, and really regroup and revise So I hope that these tools will help you make some of those, those questions and those next steps a lot easier and here’s tuition, nothing but happy cash flow in your business. You guys have an amazing one and enjoy your week, guys.