#20: MOVING IN THE RIGHT DIRECTION INVOLVES COURSE CORRECTION

In this episode, I discuss the importance of reassessment and course correction in both life and business. Just like a road trip, the path to business success is rarely straightforward. There will be roadblocks, detours, and unexpected turns, but staying flexible and open to change is key. We'll explore how to handle these shifts, whether due to external factors like a global pandemic or internal desires for a new direction. I also elaborate on the importance of understanding your numbers and how a solid financial foundation can guide your decisions when it’s time to pivot. The key word today is pivot! 😉

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Transcript

Hey friend! Leslie Roth here. Welcome back to Financially Adjusted. I am so excited to get into today's topic which is all about course correction in your business.

Every aspect of life requires reassessment and course correction in order to head in the direction of your goals. When it comes to your business, this is no different.

I like to compare any journey to meeting a goal with navigation on a road trip. When you think of going on a road trip and having that end goal destination in mind, the path to get there might not look like what you think it will. And there could be road closures, construction, bad weather, you name it. But just like any of these variables affecting your route, many variables can also pop up when you're running a business. Ever heard of COVID -19 and forced shutdowns? This is a pretty unique example, but there's so many other things that can throw you off track like new technology, competition getting tougher in your market, new trends, an illness that you or your family member are dealing with, a pregnancy, etc. The list is endless. 

It could simply be that the direction you're heading in in your business isn't what you thought it would be and you want to change your goals and your direction. Just because you want to. What’s right for you and your business in one season isn't necessarily right for you in the next season. Maybe it's not something negative. Maybe you're absolutely just crushing it in your business and you have so much success and so many clients or so many product orders that you end into a new level of volume. This is certainly going require some course correction as well.

When you're a business owner it can be really helpful to examine your behavior around change and how you view it and handle it. My question for you is how open are you to change and what's your willingness to pivot in your business? You might need to pivot at some point in order to survive or you might just need to pivot if you want to maintain the same level of business or grow. Being flexible, open minded, and willing to change and pivot in business is necessary to be successful. And this can of course be easier said than done.

I'm honestly telling myself this as much as I'm telling you because I can be a little stubborn and set in my ways and I really have to push myself to move outside of the initial vision that I have for something in my business. Just like anything in life you really don't know if the path you choose will be the one you want or need to stay on. And honestly, the reason that you're listening to me on this podcast is because I decided to pivot in my own business. Although I love my bookkeeping clients, and I love helping business owners in a really one-on-one direct way like this, I've realized I can help so many more people and reach so many more business owners doing courses and a podcast and that's the direction that I'm headed in. I'm not abandoning my clients. I'm just not growing that side of the business like I thought I would. And I really feel like God is calling me to head in this new direction and to pivot.

And for you I don't know what that looks like. But I know that it can be very difficult in those beginning stages ofpivoting and changing and we can be resistant to the discomfort that comes with that. I know I'm not naturally comfortable speaking in front of people or on this podcast, but I've really had to open up my mind and just commit to changing and learning on this new path so that I can give the new this new calling a shot. It will have a level of discomfort but sometimes you just have to push past the initial stages of that discomfort so that you can find yourself in a better place down the road. It can be such a human thing to do things a certain way simply because we've always done it that way. And change means entering into the unknown and the unknown can be scary.

If you're unwilling to pivot and change course, but the way you're doing things isn't working anymore, you are essentially committing to staying stuck there and refusing that growth and success that could be available to you if you try something new and pivot. I think we all have a little bit of this in us when it comes to our business. And sometimes we simply just don't have the time or at least we tell ourselves that. Many times the fear of the unknown is what truly holds us back. With any new path there's always unknowns but I really think that most of the fear that we have has to do with the financial unknowns. No one knows what the future holds but one thing I'm sure of is that being clear on your numbers will help you immensely when and if it's time to pivot.

And I know I've said pivot a lot so I'm sorry for that but you might hear it some more. And I don't know about you, but I can't not think about Ross in Friends when I say the word pivot or hear the word pivot. If you're a friend's fan, you know.

When I think of the pandemic, yes back to like the doom and gloom thing but it's something that is a great example of how businesses have pivoted. But when I think about the pandemic and how it affected businesses, I'm honestly in awe of some of the businesses that were pivoting in order to survive and stay afloat. One that comes to mind is restaurants. They perfected their takeout game and brick and mortar retailers were starting to sell online. Service providers pivoted to online courses.

There are just so many amazing stories of businesses changing course during those tough times. Some businesses were able to pivot enough to keep their staff working and unfortunately some were forced to let staff go. No matter what you face as a small business owner, in order to pivot it involves knowing what your financial situation is and what you're capable of. I imagine there's a whole lot of business owners who weren't clear on their numbers, but they had to get clear real quick in order to make decisions about and services and staff.

If you are one of those business owners, I'm sure you remember the difficulty involved with that. For those businesses that pivoted but weren't able to make it, my heart truly goes out to you. That was not an easy time. And no small business owner should have been put in that position but unfortunately, it was the reality. But my desire for all small business owners is that you are so clear on your numbers that you can easily and quickly take action when it's necessary and not have to scramble to understand your financial health and what options you have.

Another situation I would love to see entrepreneurs in is to have enough cushion, enough savings, and multiple revenue streams that would give you options and act as a flotation device for you in tough times.

I'll move away from the doom and gloom stuff and the survival stuff and we can take a look at some positive situations that you might find yourself in and needing to change course.

Let's say your revenue skyrockets and you need more software and staff to keep up the volume and keep going in that direction. You are going to need to assess your situation when it comes to forecasting out what your new financial situation looks like. You'll have to think about how much you can afford to pay someone, what your new costs will look like as far as what you need to pay for in your business to function at that new level. And that could look like new and more advanced software, new equipment, or ordering more materials to produce something. Whatever that looks like for you, I guarantee you that you will handle it better if you started out being clear on your numbers. This means you had a budget, your budget is realistic and clear, and you have a handle on how to read your financial statements and you’re clear on your net profit and just what you have going on in your business and the status and the health of it.

If you find yourself at square one when you're in a situation involves course correction. You find yourself at square one. It'll be that much harder to navigate and make decisions the way that you need to and in a timely manner. You'll set yourself up for success in smooth transitions if you can get a handle on your financial systems and your numbers right from the start.

But I mean I understand a lot of business owners aren't there but take this as your sign to get there. Decide that you're going to commit to understanding your numbers from here on out. It's definitely not too late.

Even in the normal course of business when nothing out of the ordinary is going on, being in tune with your business or the money in your business is the thing that will clue you in on strengths and weaknesses and highlight the direction your business is headed in and where you might need to head to in the future.

If you have any revenue and profit goals in your business, which you definitely should, it's necessary to know your numbers so that you can make sure you're on track to meet those goals. Then if you're not headed in that direction, you will know ahead of time instead of when it's too late down the road and you realize oh I I really was off track there.

And without truly knowing your numbers and knowing the financial health of your business you're just really guessing on how well you're doing and you're in the dark about whether or not you need to change course. For instance, let's say you're trying out some new advertising and you don't check you know to see whether or not your revenue is growing because of this. If you're not regularly looking at your P and L, you'll have no idea if you're seeing an ROI on that ad spend. If you have some different revenue streams and you think you know how well they're performing but you don't check your revenue patterns, you really don't know.

By paying attention to what your numbers are telling you, you'll have your finger on the pulse of your business, on the performance of your revenue streams, and whether or not your costs are too high in one area or another. Paying attention to net profit, which is how much is left over from your revenue after expenses, will tell you the health and growth potential of your business.

Let's say you look at your profit and loss statement and you're comparing quarter one with quarter two and you see that your profit margin drop significantly from thirty percent to fifteen percent. This will alert you to investigate what's beyond that change or I'm sorry what's behind that change and really get to the bottom of it so that you can course correct and prevent that from happening again.

This kind of proactive approach to managing your business is what will level you up and set you up for success, but you have to be willing to address the issues you find and be willing to pivot when it's necessary. If you turn a blind eye, you'll likely stay on that same path that led you to a drop in revenue.

By having a proactive money plan and having a habit of staying up to date on your bookkeeping and looking at your reports, you'll find out very quickly where any issues exist. The financial side of your business isn't separate or just a task to check off when you get to it.  It's actually the barometer of your business and the tool that drives you to your goals. You need to be the one steering that tool or you're going to veer off course.

What I want for you is to have a clear path of where you need to go. How you're going to get there. And, my friend, being in tune to your numbers is the key to knowing where you're going. I hope this episode helped and I hope it inspired you to you become more active in understanding your numbers. I always say even if you hired somebody to do your bookkeeping to do your accounting, You are the only one who is going to be making those important decisions when that time comes. You're the one who truly needs to understand what's going on.

I hope this episode lit a fire and you feel like “yes I am going to make this a regular habit to keep looking at my numbers and knowing which course I want to head down” and being proactive. Have a good one!