1. The business isn’t creating enough sales (revenue)
2. The business isn’t profitable enough (either you’re not charging enough or your expenses are too high)
3. The timing is wrong (you have ample revenue and profitability, but you pay everyone before you get paid – creating a timing crunch while waiting for the next check).

Before taking action in your business, you must first decide which of these three challenges you’re facing. Knowing what you’re dealing with will help you generate cash (and right the ship) more quickly.

1. Not Enough Sales/Revenue

Assuming this is your only problem (and you aren’t also facing #2 above), the solution for this cash flow challenge is simple – turn up the volume on your sales and marketing efforts. In particular, you want to focus on sales and marketing activities that gain new customers quickly, without compromising profitability.

Which activities are right for you are going to depend on the nature of your business. However, for most businesses, the quickest way to generate revenue is to tap into your existing customer base for incremental sales and/or referral sales. Contests and limited time offers are a great way to stimulate immediate demand among those who already admire your work – and if you build in a referral component, wherein existing customers also get bonuses when they introduce you to new customers, you’ll broaden your reach as well.

If you feel your marketing and sales efforts are already turned way up, though, and you’re not still not attracting the number of clients you need, it’s time to do your homework (aka research!). Something about your marketing and sales message is not resonating with your prospective customer, so it’s time to find out why. It’s time to conduct some market research in your industry to understand whether your price is too high, you’re targeting the wrong market or too broad of a market, or your message needs to be tweaked so they more clearly understand the benefits of buying from you.

Well-priced, beneficial products that are well promoted will always find loyal customers – so have faith that once you get your marketing working appropriately, you’ll create the levels of revenue that are just right for you.

2. Not Enough Profit

This challenge is more difficult to deal with and will require you to create a budget for your business so you can play some “what if” games. Further, in my research with over 2,000 female entrepreneurs, I’ve learned that businesses with insufficient profit levels often reflect the mindset of their owners – wonderful women with amazing skills who are simply not charging enough for their incredible talents and gifts. If you have plenty of customers and work to do and still aren’t making enough money, this is your primary challenge – and there’s no point doing more marketing until you have it resolved. When you sell yourself cheap, more customers only compound the problem!

Setting this right in your business begins with an objective look at your business budget. I love to do this in Excel, so I can easily change key assumptions about price and costs and immediately see the impact on the bottom line cash flow of the business. At the top of the page, create a line for each type of income your business creates. If you have product sales, enter the price of the product and the number of units you sell in a month to create total sales for each product. If you do hourly work (like coaching, designing, consulting), enter your hourly rate and the number of hours you work to compute your total hourly work income. If you teach classes that people pay for, add that in as another income stream. Once all of your major sources of income are documented, create a total income line that sums them all up.

Do the same for expenses, itemizing every significant business expense on a row of its own, listing how much you spend in that area each month. Total all of the expenses. Next create a row subtracting your total expenses from your total income to see your monthly income (before taxes).

Here’s where it gets fun! What if you increased your hourly rate by $20 an hour? Plug in that assumption and see what happens to the “bottom line”. What if you took a 10% increase on the price of your products? Does that have a bigger impact, or not? What if you doubled the number of hours you bill for? – when you plug that in, if the bottom line number is still not exciting, that’s your clue that you are definitely not charging what you are worth!

As you play these games, remember to be realistic – if you already charge at the high end of the spectrum in some categories, your ability to charge more will be limited. If that’s the case, you might be better served by taking a critical look at your expenses. Are you spending more than your business merits at this particular time? Where can you cut? Or, conversely, how much do you need to grow the top line in order to afford the systems and structure you’ve built?

Have fun with this and create a budget that reflects a way of working (and pricing) that you can feel excited about. Then set about creating the changes to bring that budget to life!

3. The timing is off

Some women run profitable businesses overall, but they don’t actually receive their money until after they’ve paid their expenses. This can lead to harrowing times, especially in a tougher economic climate, when they find themselves watching the mailbox daily, waiting for the check to come in. If this is your business, there are four strategies you can employ to smooth out peaks and valleys over the long term:

• Offer early payment terms – this can include discounting your invoices when paid within 30 days (2% terms are very common in the corporate world, for example)
• Front-load your invoicing – reconfigure your invoicing process to be more favorable to getting cash in quickly. Ideas include requiring out-of-pocket expense be covered before work begins, or dividing total cost so that you get more money up front (such as 2/3rd on approval, 1/3rd on completion of the work).
• Obtain a line of credit for your business. Hopefully, you already have a relationship with your local bank management. If not, begin building one. Having a line of credit available can definitely help manage flow when you’re in a pinch – you know the money is coming, it’s just not in the mailbox yet.
• Create a cash reserve. Similarly to obtaining a line of credit, you can slowly begin to create your own cash flow reserve. Earmark 10% of profits from each sale or project to go into a cash reserve fund, for example. Over time, this amount will grow and you can use it to smooth over times when the money is tight. Just be sure to replace what you draw out of it when the check comes in so you remain sufficiently liquid to be able to cover a few months’ expenses without worry.

Every female entrepreneur is going to face cash flow issues from time to time. Diagnosing the cause of your cash flow challenges will lead you to the right solutions – and create more money with which to grow your business and/or enjoy your life to the fullest!

Each of these five types has unique approach to running a business – and as a consequence, they may respond differently to firing a client when the time comes. This article examines Go Jane Go and Merry Jane. To see how the other Janes respond, check out last week’s article on our blog.

Go Jane Go is passionate about her work and may be a classic overachiever, possibly event taking on volunteer opportunities in addition to running a business (and maybe a family, too). She’s eager to make an impact on the world and may have a difficult time saying “no”. As a result, she may feel that she can’t get away from work or sometimes fall into periods where she’s stressed and not taking care of herself because her plate is so full. She dreams of having that elusive “balance,” even as she commits more tasks to her to do list.

For Go Jane Go, business is built on relationships, so ending one could feel traumatic, even if it’s the right thing to do for the business. Because she so willingly takes so much responsibility on herself, Go Jane Go may bend over backward trying to please her clients, even when they are being unreasonable. Because business feels very personal to her, she may also avoid confrontation, not wanting the client to feel she doesn’t care them as individuals. Finally, her strong desire to help and her confidence that she can deliver better results than nearly anyone else make keep her doggedly persistent in the relationship – refusing to let it “fail” by going above and beyond trying to please them.

Sometimes, however, relationships cannot be fixed because doing so requires changes on the other person’s part – something outside of Go Jane Go’s control. Here are some questions Go Jane Go should ask herself if she’s struggling with a difficult client:

• Are you putting off ending this relationship because you like the client as a person? Even if you and this client are good friends, you must make sure your own needs are being met. If they aren’t willing to make sure you are also benefiting from the relationship, you can end the business aspects but maintain the camaraderie.

• Do you feel guilty when you think of letting them go? If guilt is your primary reason, gently remind yourself that this raw emotion should not ever be allowed to control you.

• Are you worried that they won’t be taken care of well, elsewhere? If so, recognize this may be the best thing for them because it will cause them to see the value you bring in a different light. I’ve parted ways with clients only to have them return a year later with a greater appreciation for the partnership. You might think of it as being akin to letting your children ride the bike, even though you know they’re going to fall. You have to let them fall – because in the falling, they have the opportunity to grow. Difficult clients can well be the same.

Therefore, if you have a difficult client, please take the time to develop a pros and cons list. Force yourself to see what this harmful relationship is costing you in terms of your time and your energy. If it is draining you, have the courage to end it. You and your other clients will reap the rewards when you do because you’ll feel so much lighter.

Merry Jane. This entrepreneur is usually building a part-time or “flexible time” business that gives her a creative outlet (whether she’s an ad agency consultant or she makes beautiful artwork) that she can manage within specific constraints around her schedule. She may have a day-job, or need to be fully present for family or other pursuits. She realizes she could make more money by working longer hours, but she’s happy with the tradeoff she has made because her business gives her tremendous freedom to work how and when she wants, around her other commitments.

Since Merry Jane has limited hours to work in her business, she is more likely than other entrepreneurs to say finding new customers is a challenge. She’s happy keeping her business within manageable limits, but firing a client may diminish an already small client base. Therefore, she’d like to keep the customers she has, whenever possible. Still, Merry Jane values her freedom, time, and opportunity to express herself through her work so much, she won’t tolerate an abusive situation for long because she’s committed to enjoying the lifestyle she’s created.

Some things for Merry Jane to consider to make the parting easier:

• Focus on the amount of time and energy this “bad customer” is costing you. Is it worth it? If not, part ways sooner rather than later.

• Time and energy are resources that you can exchange for other resources – including money. If you took the time and energy this person is costing you and channeled it instead into marketing and sales, you’d replace this customer in no time – and probably add more than one replacement. Commit to a faster break so you can go find those customers who can’t wait to work with you.

Firing a client is never a walk in the park. But it can be a breath of fresh air for two parties who’ve been feeling the stress or a clean break from a disintegrating situation. Whether you’re a Go Jane Go and you just don’t want to end a friendly working relationship, or a Merry Jane who doesn’t want to lose a precious client, sometimes the end is just a new beginning in disguise.

Let’s look at how 2 of those Janes would deal with a bookkeeping crisis: Jane Dough and Accidental Jane.

Jane Dough is an entrepreneur who enjoys running her business and is comfortable and determined in marketing and selling. She tends to be working longer hours, but she doesn’t mind because her focus is on growth. (Jane Dough is five times as likely to hit the million-dollar revenue mark as other Jane types.) She’s clear in her priorities and may be intentionally and actively growing an asset-based or legacy business.

Because Jane Dough’s focus is on growth, she’s interested in systems that will help create leverage in her business. So when faced with a bookkeeping problem, Jane Dough will probably look at the system. Where in the system did the breakdown occur? And what can we do to fix it in the future?

Jane Dough will most likely sit down with her accountant and bookkeeper to dissect what happened and then to work on the system to prevent it from happening in the future.

Now, while it’s good that Jane Dough is focused on creating systems, she may be setting them up too quickly so she can move to the next item on her to-do list, thus implementing incomplete systems. This may be what has caused the problem in the first place. Jane Dough should take a step back and make sure those systems she’s putting into place are done right the first time.

Our second type of entrepreneur is known as Accidental Jane. Accidental Jane is a successful, confident business owner who tends to be making good money — despite the fact she never really meant to start a business. She’s the one who will say things like “I never set out to start a business” but she did because she might not have been happy with a previous employer or discovered a gift and wanted to share it with the world. There’s no question Accidental Jane is very good at what she does and her business tends to grow organically through word of mouth.

Accidental Jane is most likely doing her books herself, so when she discovers a bookkeeping crisis, she’ll probably start by going through the books herself to fix it. While she’ll be on top of the problem, Accidental Jane should really be focused on her gift – her brilliance. That’s what she’s good at and that’s what she loves to do. Accidental Jane’s first task should be to go out and hire a good bookkeeper. That will free up her time so she can keep doing what she loves to do.

Next week’s issue will explore how other Janes handle these challenges. Stay tuned!

As President and Chief Marketing Strategist, MaryPat has helped numerous entrepreneurs strengthen their businesses. Her particular talent lies in facilitating profitable and long-lasting strategic partnerships and joint ventures for her clients.

MaryPat originally became an entrepreneur by default when she found she couldn’t earn the kind of money she wanted doing what she wanted to do by working for someone else. When she did land the “dream job,” she then learned how frustrating it can be to work for someone else!

So, MaryPat happily returned to entrepreneurism because she loves having the freedom to choose her clients, her job description, her workload, and her schedule.

The greatest rewards MaryPat has experienced are being able to control how she uses her time and loving the work that she does with her clients. As she said, “The ability to spend more time working on particular projects that I LOVE and to spend more quality time with my family WHEN I want. I feel very fortunate to spend my ‘working’ time on my passion instead of something that would qualify as ‘the daily grind.”

I was delighted last week when I spoke to my dear friend and mastermind group member, Regina Novickis about how she’s changed her Jane type. I was so moved by her story, I asked her if she would be kind enough to share it with you. So she wrote the post below, and she says it so much more eloquently than I ever could!

To all the Janes out there who envision a better or different result from their business, I say, believe in yourself! Visualize your dream, reach out to people who can help you with the right support or information, and then determine to make your dream a reality. Regina did — and you can too!

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From Tenacity to Dough – 60-Days to Build the Business of My Dreams

In 2003, I left the corporate world to pursue my dream of co-founding an independent public relations agency. Fast-forward five and a half years to February of 2009, and I was feeling like I was right back where I had been when I first started. The money was better, but it wasn’t enough; the client retainers were big, but when you calculated the hours-for-dollars, I may as well have been working at a fast food joint; the clients were “high-profile,” but they were wearing me down. I was exhausted, burnt out, and had lost the passion for my work.

I knew there was a better way. I knew that no matter what, I would make my business succeed to the level to which I wanted.

When Jane Out of the Box founder Michele Dekinder-Smith first invited me to take the Jane assessment, it was no surprise that my result was “Tenacity Jane.” There are many wonderful qualities about this particular Jane – she’s driven; hard-working; and has a great entrepreneurial spirit. She’s a great Jane, and at the same time, I knew that while my assessment and reality at the time said Tenacity, my heart told me I was ready to be Jane Dough, aka, an empire-builder.

Once I really made the decision to make a big leap in my business, it was a matter of finding the right mentors, systems, and tools, as well as digging in my heels with my entrepreneurial boots. It meant stepping out and promoting my business in the same way that we do for our clients. It meant getting the systems in place to leverage all the work I had done in my thirteen-year PR career.

Last week, I was reflecting on my business journey over the past two months, and I realized just how much I had accomplished in such a short time, and how happy and proud I now am to work in my industry. I have a re-ignited passion for my work, and I am reminded, and rewarded, on a daily basis, on just how important my work is for so many other people’s entrepreneurial successes. After all, there’s no faster, less-expensive or more credible way to get your message out to the world than through public relations. Not only do I get to build my own business – I get to help others build theirs as well.

I decided to take the assessment again…and there it was: I’m now a Jane Dough.

Not everyone dreams of being a Jane Dough – but whatever type of Jane you are, or aspire to be, the best piece of advice someone offered to me as I was making the shift is this: you have the ability and the right to make your business look however you want. Dream it, and then put it into action.

Wishing you success,

Regina Novickis aka Jane Dough

www.prtakeoff.com

Regina Novickis
Regina Novickis, co-founder of PR Takeoff, is a seasoned public relations executive with more than 13 years of experience managing brand positioning, public relations and media relations efforts on behalf of consumer/entertainment clients. With extensive contacts at high-profile media outlets, she has secured coverage for clients in every genre of national press ranging from USA Today, Wall Street Journal, Time and Newsweek, to Self, Marie Claire, GQ and Maxim, to “Entertainment Tonight,” “The View” and NBC’s “Today” show.
From national product launches to increasing brand awareness, Novickis’ PR career has included work for some of the world’s most recognizable companies. These include brands such as Baskin-Robbins, Walt Disney Studios Home Entertainment, Disney Consumer Products, FOX, Zicam Cold Remedy, Columbia TriStar Home Entertainment, Fantastic Sams, L.A. Looks and ABSOLUT Vodka, to name a few.

Novickis holds a bachelor’s degree in English from the University of California Los Angeles. She spent her junior year at the University of Venice in Italy.

New study shows female entrepreneurs fall primarily into one of five categories Tampa, FL (August 28, 2008) – A two year study, commissioned by Jane Out of the Box, a research-based online resource community for female entrepreneurs, shows that all women business owners, though highly dynamic individuals, can be categorized as one of five types. The distinction between the categories, says the study, is based on women’s choices in balancing personal and professional needs.

As a result of the study findings, Jane Out of the Box also provides information on how women who are dissatisfied with their “type” can take relevant steps to move their business and lifestyle to a position that better aligns with their goals. Women who are satisfied with their type will also be given advice on how to reap even greater rewards from their businesses.

Additional information, as well as a free, evaluation/classification assessment, can be found at www.JaneOutoftheBox.com, then log in and click on Which Jane Are You?

The first type listed in the study, referred to as Jane Dough, enjoys running her business and is comfortable and determined in marketing and selling. She may be working longer hours, but she doesn’t mind because she enjoys the enterprise so much. Her focus on growth is why she is five times as likely as the average woman entrepreneur to hit the million-dollar revenue mark with her company. She is clear in her priorities and may be intentionally and actively growing an asset-based or legacy business that she can later sell or pass on to her children. It is estimated that 18 percent of women are Jane Doughs.

Go Jane Go, is the second Jane type. She is a successful female entrepreneur who has grown her business to the point that she may now struggle to get time away from her work for vacations or to take care of herself. She feels confident and organized and has put systems in place to get her work done, however she may have difficulty saying no to clients and/or volunteer opportunities. She is four times more likely to hit the million-dollar mark than the average female entrepreneur. On average, Go Jane Go types also have the highest personal income drawn from their businesses, though she has the least amount of personal time. Go Jane Go types are the least common, weighing in at 14 percent.

The third type of female entrepreneur, Tenacity Jane, may be struggling with cash flow concerns, but her passion is undeniable. She’s likely to be feeling stressed and may also feel overwhelmed and worried, specifically when it comes to business finances and cash flow. She may have a dissatisfactory balance between her professional and personal life, but is determined to make her business a success and refuses to give up. The study showed that 31 percent of women business owners are Tenacity Janes.

Merry Jane, is the fourth “Jane” type. She has created a business that meets her needs for time freedom. She has time to take care of herself and can take time off when she wants to. She is typically working 40 or fewer hours per week and does not feel extreme stress. Though she generally has a lower income than the other “Janes,” she is happy with the balance she’s created in her life. According to the study, roughly 19 percent of women business owners are Merry Janes.

The final “Jane” identified in the study, Accidental Jane, is a successful, confident business owner who makes a good income. She most likely did not intend to start a business, but had an area of expertise that lent itself to a business idea. She has created her own ideal job through her business, which she may have started due to dissatisfaction with her previous employment or following a layoff. While at work, she may have some difficulty prioritizing what she needs to do, but she readily leaves work “at the office” when she’s done for the day, so she’s not stressed as a matter of course. She likely has no big plans to aggressively grow her business and is simply enjoying the work as it comes. About 18 percent of women business owners are Accidental Janes.

“US Census statistics show that only three percent of woman-owned businesses make it to the $1 million mark,” says Michele DeKinder-Smith, founder and CEO of Jane Out of the Box. “This research should help female entrepreneurs everywhere identify their own type, and determine whether or not the businesses they have built fall in line with their personal priorities and values. Women of all five types may find themselves wishing to be more like a woman in another group. We believe, based on our research, that if this is the case, it is possible to follow a specific plan to change the group you’re in.”

Jane Out of the Box is an online, research-based resource community serving the needs of female entrepreneurs. Jane Out of the Box offers tools, research, resources and networking opportunities to members. Additionally, Jane Out of the Box provides training and marketing consulting services to Fortune 500 companies, non-profit organizations and government organizations looking to meet the demands of women entrepreneurs.

Take the free assessment now and discover which Jane you are. Then, come back and post your thoughts here!

Over the course of the past year, I’ve had an opportunity to meet many wonderful women business owners.  The purpose of this blog is to share some of their stories, to discuss findings from the research we’re doing to help women business owners, and to share news, tips, and information that can can help us all be more successful – in business and in our lives through entrepreneurism. 

As I write today, one of the things that’s on my mind is why we all start businesses.  In our research, we’ve seen a few dominant reasons:  wanting to be in control of your own future and the specific desire to own a business.  In addition, though, we’ve heard women in particular talk about the importance of time freedom and being able to manage how and when and where they work.

I know when I started my first business, it was really about being able to control my own future and choose who I wanted to work with.  I was very fortunate that my husband was a full-time dad and took care of so many of the things that ”mom” is usually responsible for.  That meant we had lots of free time together because our weekends weren’t spent “catching up” on all the small and large things required to have a happy, healthy family.

As that consulting business grew, however, time freedom became increasingly important to me.  So much so, that over the past two years, I’ve learned how to build a virtual team so that the businesses can accomplish a lot and I still can take the time for school events, family vacations, and Friday night dates with my husband.

What about you?   What are the reasons you started your business?  And how important is time freedom to you?  

– Michele DeKinder-Smith, Founder, Jane Out of the Box