Business
On today’s episode of Rock the Podcast, Margy (virtually) sits down with Lisa Larter! Lisa helps businesses navigate modern entrepreneurship so that they can increase sales and profits. She works with her clients on everything from business strategy, understanding their numbers and measuring what matters, to online marketing, social media and the best way to turn connections into paying customers! Lisa believes that business is all about the numbers and that you need to take lots of action in order to make things happen. She is known for her no-nonsense approach to helping business owners get results. You won’t get fluff from Lisa, only the facts and an expectation that if you really want your business to grow, you will dig in and do the work! Margy and Lisa bonded over their love of numbers! They both agree that if you don’t have a grasp on your numbers, you will not be able to pay yourself and you will not be able to have the lifestyle that you want as an entrepreneur. Everything that you want as a business owner-- the freedom, the impact -- if your numbers are a mess your business will ultimately fail. Margy and Lisa both loved the book The Ultimate Blueprint for an Insanely Successful Business by Keith Cunningham. That book emphasizes the importance of really understanding the numbers in your business and looking at numbers in a way that can benefit you and can benefit the people that work with you. Every new coaching client of Lisa’s receives this book. Lisa has held mastermind retreats and spent entire days looking at and discussing concepts in The Ultimate Blueprint. A concept that Lisa loves to implement is comparing historical data year over year in your business to look for trends and exceptions. Lisa also ensures her clients are getting clear on their expenses. Lisa explains that we have a tendency to throw money at problems. If you have enough money to solve the problem, then you don’t have a problem. The issue is that sometimes the money you’re throwing at a problem isn’t actually fixing the root of the problem. This is when you have to look at numbers and be able to understand what they mean in your business. Lisa asks that her bookkeepers and accountants send her the numbers every month, so Lisa can unpack. Lisa knows that she needs to look at them and know exactly what is going on before she gets to the end of year, so she can make smart decisions based on that data. Margy asks Lisa what advice she has for entrepreneurs who tell themselves the story of “I’m not a numbers person.” People hire Lisa for marketing strategy, and she almost always ends up working on their numbers! Her clients don’t have a marketing problem, they have a numbers problem. Lisa will work with them to get to the root of their issue: Are they having a pricing problem, an expense problem, or perhaps a billable hours problem? Lisa notes that her clients always think numbers are going to be very complicated, but really it’s just basic addition, subtraction, multiplication and division. If you can calculate percentages and you can look for outliers, that’s all you need to be able to do. Lisa also observes that business owners often make a lot of emotional decisions to spend money. Business owners and entrepreneurs rationalize when they need to spend the money, but the logical side of the brain wants to avoid that, and that creates a lot of shame surrounding your numbers. Instead, Lisa argues to look at your numbers up front. She tells her clients that they can reverse engineer what they want in your business, and together, Lisa and her clients can create budgets and forecasts to make that happen. That way, as an entrepreneur, you can spend the money the way you want because you’ve planned for it! You can still pay yourself and have a profit. Margy has seen first hand how much emotional decision making comes with your finances. Margy really loves being analytical and looking at her numbers, but she also believes in intuition. When something feels right or wrong in your business, you shouldn’t ignore that feeling. But you should look at your numbers to either validate or disprove your assumptions and feelings. It’s not “Never trust your gut.” It’s more “Marry numbers and intuition together.” Lisa explains that many business coaches are doing their clients a disservice by not looking at the numbers. Business owners need to be able to interpret data to have successful businesses. The Ultimate Blueprint is all about tracking your numbers, what numbers to track, and tracking them over a long period of time. This allows you to see a comparison of month to month and year to year. Margy asks Lisa, for somebody who wants to implement tracking their numbers better but is overwhelmed by all the spreadsheets, what do you think are the key things that they should be tracking every month in their business? The first action Lisa recommends is to track your revenue weekly and monthly. It’s imperative to track sales MTD on a weekly basis, so you can find patterns and trends. She also recommends looking at your profit and loss statements, looking at your cashflow situation, and if you have receivables to look at those. She explains, you want to pay as late as you can, and you want to get paid as early as you can. The longer the receivable sits, the harder it is to collect it. Lisa is also a huge fan of per unit measuring, she loves slicing and dicing numbers in as many ways as she can to support a hypothesis that you have about how to make the business perform better. Lisa also points out that if you have a team and you are able to gauge revenue per person, then you can create a factor capacity model. Another idea to consider as a business owner is per uniting the cost of acquisition of a new client. If you decide to spend $7,000 in facebook ads, how much are you generating in revenue as a result of that spend? How much did it cost you per lead? What did you get for every dollar spent? When you can drill the numbers down that way, you can actually replicate what you’ve done that has produced results. You will also have a baseline measurement that will tell you if something is no longer working. If you only measure it one time, and you don’t look at what the trends are, you won’t be seeing legitimate results in your business. Lisa breaks business growth into 5 steps: Attract Convert Retain Expand Refer After you are able to both attract business and convert to clients, you need to then keep your client or customer, and expand the amount of business you do with them. This will have a huge impact on the lifetime value of your business. If they refer people to you, your cost of acquisition goes down; buyers are selling for you. You can’t maintain a strong business with luck, you need to know your back-end numbers. Lisa and Margy agree that even during the good times, entrepreneurs need to be prepared and get everything in order in case they have a tough month ahead. Lisa asks all her clients, “How much money do you have in the bank? What is your burn rate? How long will that last?” Thought Readers is Lisa’s newest venture, the online Business & Book Club community. Lisa came up with the idea when someone had reached out to her explaining that they were always trying to keep up with what Lisa was reading. They asked if Lisa would start a business book club. They said, “Send me the book you're reading every month, tell me what you’re learning and I will write you a check.” She thought, nobody is gonna pay me to read books with me! However, after the first year, 75 people signed up. Lisa chooses a book, reads it a month before, and picks out all the important “ahas!” She then shares them with the group, records videos about her own takeaways, and she does a “Books and Business Q&A.” People can come to the call and ask Lisa any question they want about the book or just business in general! Lisa is now entering her fifth year reading books together with this community! You can join the community and she will ship you the book, or join and be a digital member and buy the book yourself. Either way, you still get wisdom from the discussion that happens inside the community. It’s a great shortcut to reading the entire book. A recommendation from Lisa is to pick books that are aligned with where your business problems are - read something that resonates with you, read something that will help you. Margy’s big focus is on implementation, so she is drawn to books like Profit First and The Ultimate Blueprint. It’s incredibly helpful to have someone to talk it out with and get some bullet points on what you’re struggling with or want to learn more about. Thought Readers helps community members translate these books into their lives and their business to take action. A final recommendation from Lisa is when you’re looking at business books, pick the lever that is going to lift you the highest with the least amount of effort. Don’t get stuck in the weeds of tactical implementation, instead stick with the one thing that is going to give you the biggest ROI on your time. You can connect with Lisa at thoughtreaders.com!