Unsexy Business. The stuff no one wants to talk about.
Have you been focused on the sexy side of business for too long? If your business looks amazing from the outside but doesn't make a whole lot in profits you might have been "sexy stuff" focused.
Are you often caught up in comparison-itis where you assume everyone else is hugely successful, and you're not? Today’s podcast will give you some things to think about.
I see the insides of many businesses, and I hear a lot about other people's businesses. The women who come to me for business advice have one very big thing in common, they underestimate just how successful they are. Often they have spent years comparing themselves to people they perceive or assume to be successful.
Assume nothing!
If you haven't seen the profit and loss report and balance sheet of the businesses you're admiring, then you don't know enough to judge if they're successful or not.
The success or failure of a business is partly what you see on the outside, but mostly what's happening on the inside. A business with all the fancy bells and whistles is worth nothing if it doesn't generate a profit.
Just because you see lots of sexy stuff from the outside, it doesn't mean the business 'works' the way it should.
If you see me at your local shopping centre, I arrive in a brand new Mercedes, and I am decked out in Chanel carrying a Hermes bag, you will naturally assume I am financially successful. However, you don't know if the car is leased, the Chanel is the only fancy thing I own, and the Hermes is rented. It's not hard to fake a lifestyle. The same can be said for business.
Sexy on the outside, hideous on the inside
It's not sexy to open your Plan and Track on Monday morning, dressed in sweats and gulping coffee from a chipped mug. It isn't sexy to check your Google Analytics or do stock counts in a filthy garage or warehouse.
And it's definitely not sexy to post that stuff on social media, either. That is why you rarely see it posted all over Instagram or Tik-Tok. The people we often admire and desire to emulate are the ones who look polished, organised and sexy.
So let's talk about the unsexy side of business and the reality of growing a profit.
People are responsible for what they share, and we are responsible for not turning that into something that it isn't. Let me give you an example; I am, by nature, a very disorganised person. That is why I have developed all these tools and why my business is so automated. Without tools, systems, processes and automation, I am a loose cannon.
It was a Friday afternoon and I posted a photo of my "Friday Office Disaster Zone" on Instagram, and one of the comments from a follower was, "nice to see you're not perfect after all". Now, I took that personally because I thought I had done an excellent job sharing all the unsexy stuff. I had no idea why that person assumed I was perfect.
Then, I remembered a great bit of advice that we can apply to social media; "I am responsible for what I say, but not what you understand".
I have no control over how you digest what I have said, and I can't control how you apply your own set of values or project your own personal thoughts or feelings. You have your lens through which you view things, and I can't change your lens.
Social Media is viewed through YOUR lens
The follower who made that comment was viewing my content through her lens, and she had assumptions she had made about me that I had no control over. The same can be said to anyone you follow online. So, view everything with the knowledge that you have your unique lens.
Let’s talk cash flow
A huge cash flow killer, especially for online experts, coaches and course sellers, is the money invested in making a good impression. Expensive photoshoots, flashy branding, beautiful websites; all comes at a significant cost. You should invest in those things, especially if you want to charge a premium but not if it requires you to burn cash flow.
There are so many course creators that were doing really well when I started, much better than me. Unfortunately, a lot of them have either disappeared or had to re-invent multiple times.
Why?
Because they were spending big on making a good impression and leaving the cash flow management and profit planning on the back-burner. It's not sexy to worry about those things.
Almost a decade from my first course launch, I am still here, and they're not. Unfortunately, all that sexy flash doesn't always equate to a profitable and sustainable business.
Buying courses is sexy.. doing the work… not so much!
Sexy business is buying lots of fantastic courses and working with lots of great coaches, right? Yes. Putting all that newly acquired knowledge into practice, well, that is not so sexy. It's hard work.
Yes, you should invest in filling the gaps in your knowledge. I am just about to drop $500 on a course today. I am investing that money because I have identified my growth gap, the bit of knowledge I need to acquire to fill a specific need.
If you're dropping tons of cash on different courses and coaches, but your business isn't changing, and your profits aren't growing, you're likely spending money on what's sexy, not what's needed.
Sure, a course in manifesting money sounds fun, but what's the point if you have no idea how to manage the money when you get it. A course in quickly creating months worth of content in just a few hours sounds very appealing to me, but what's the point if I don't have a sales funnel, my target audience isn't clear, and my pricing strategy isn't profitable.
Stop cheaping out on the things you really need
I see lots of chatter in Facebook groups from people happy to spend on Mastermind retreats and big-ticket courses, but they're then not willing or able to invest in better tools to run their business.
If you're trying to sticky tape together platforms that don't really work that well or you're cheaping out on options that will save time, automate your sales, and support your business to be more scaleable, you might want to reconsider where you're spending your money.
Bookkeeping is a great example of this; using made for purpose platforms like Xero or Quickbooks is a great investment in taking financial control of your business. However, if you're handing a box full of receipts to your accountant once a year, you're not going to be able to scale successfully.
A box full of receipts at, say $50k per year is a bit of a mess; at $500k, it's a disaster waiting to happen.
Every time I write and record a Podcast, I get another five podcast ideas, so one I will add to the list is the habits you need to embrace at a small turnover to create success at a big turnover.
The ability to manage your books is one of them. Not knowing what your profit is because your receipts and invoices are sitting in your inbox or stuffed into a folder leaves you money blind.
Your bank balance isn’t a good profit measure
The only way to check if you're making money is to check your bank account, and while yes, that does give you some indication, it's not going to help you figure out if you can pay yourself more or afford that fancy new course you want.
While we're on the subject, another excellent investment that you absolutely will not be taking photos of and posting all over the 'gram' is outsourcing to a bookkeeper. Your job is to check the numbers, be aware and make changes as needed, not enter the numbers.
If you can afford all the other sexy stuff like mastermind retreats and stylists, photoshoots, business class plane tickets and such, you can afford a bookkeeper.
Learning to speak with your accountant, gross, yes. Essential? Also, yes.
You pay your accountant to handle your tax affairs and work with you to understand the financials in your business. If they're not answering you clearly, or you don't understand spend the money to book a chat with them, and if they're not willing to do that, then find a new accountant. There is a new breed of dynamic and supportive accountants, and they embrace educating their clients.
I would never expect you to understand the inner workings of capital gains tax, instant write-offs, dividends, etc., but it's helpful to know the basics.
Your business, your responsibility
Unless you're paying your accountant to be the Chief Financial Officer in your business, they're not going to be doing a lot more than making sure your business is tax compliant. It's up to you to ask the right questions and to do that, you're going to need to learn the basics.
If you're in Members Club, check Busting the Account Speak in the Cash Flow Kit. We break down all the confusing terms so you will feel empowered when talking to your accountant.
I just want to mention here that I have many clients who feel like they get brushed off by their accountant or the accountant is not direct or helpful with their advice. Please don't feel like you're the only one.
I hear it all the time. I also see accountants push a pile of paperwork with the sign here tabs all through it at clients without explanation. It is your legal obligation to the ATO in Australia, Inland Revenue in New Zealand, HM Revenue and Customs in the UK, CRA in Canada, IRS in the US.. where ever you are to know what you're submitting to the tax department. It's your signature on the paperwork, and if it's incorrect, you're ultimately responsible.
Taxes are about as sexy as...
I feel like each unsexy business point I am making is flowing so nicely into the next point because now let's cover taxes. Now, I can't go through every tax in every country, although if I am ever kidnapped that is my strategy. Incessant babbling about different taxes in every country until they release me out of sheer annoyance.
In Australia, as a business owner, you will likely need to understand GST or goods and services tax. Many countries have a sales-type tax that you don't personally pay. You just collect it on behalf of the taxman. This is quite different to the tax you pay on your earnings.
Sorry to kill your libido
Once again, I don't want you to dive into the vile, repulsive bowels of tax law. Instead, I want you to understand the basics because there is nothing less sexy than a massive tax bill. It will dampen your business libido fast.
Of course, I will round up today's blog by reminding you that knowing your numbers might not feel too sexy, but you know what is?
Being able to do whatever the heck you want; spend what you want on lovely things that make your life happier, work with only people who bring out the best in you, waste time on your favourite indulgences, whatever your heart desires. That is truly desire-worthy.
When you do the unsexy stuff, you will have all that and so much more. Now THAT is a sexy business.
Want some more Melanie in your ears?
Check out the last episode of The Profit Lovers Podcast here
Don't forget to check out the Podcasts Melanie has been featured on too!
Listen to Melanie chat with some other amazing women in business here