Show me the money, honey!

The standard entrepreneur and spouse dynamic can be very touchy.  As entrepreneurs, we have a high-risk tolerance.  Spouses typically have a much lower tolerance.  Entrepreneurs are optimistic and often obsessed with their business.  Spouse of entrepreneurs are often more wary of the business’ upside and don’t feel connected to it.  Entrepreneurs spend a lot of time with their “other” child, their baby, their business, which can breed resentment.  Add the dynamic of entrepreneur as wife AND spouse as husband and we’re all on new ground.  Now, throw in the different styles of handling money and that ground just gave way to a sinkhole. Just for added measure, men are typically more practical and women are often relational.  In fact, your husband’s practicalism can come across to you as resistance or lack of support. Put entrepreneurialism, male/female dynamics and different money styles in the same relationship and you have the potential of creating significant discourse in a marriage.  That just means it’s time for meaningful discussions.  It can take time, work and dedication to help our spouses understand our business, our dreams, our motivations with the hope they can become our allies. There is a lot of loneliness and heartache in the process, on both sides. Not just for us women, but for the men who love us and stay with us. But, I can help shorten your learning curve. And one of the shortest ways is to show me the money, honey!

Show me the money, honeyIdeally, your business is a profit driven business vs. a drain-the-family-finances beast.  The surest way to drive a wedge between you and your husband is if you’re not contributing to the family coffers, regardless of the reasons why.  Are you also sacrificing family time, private time with your husband, household needs, your health, to work on your business?  If so, this will surely add to his level of frustration and resentment.

For everything, there is a season.  When you start a business it will take up a lot of your time. When a major project comes along and you need to give it your all (think of the launch of a new product line, a book, being on Shark Tank).  Hopefully, you secured the stakeholders (your family’s buy-in) to pursue these efforts.  Perhaps you had a serious health issue, family matter, or life-altering event that forced you to put the business on the back burner, but now you’re going at it with all 8 cylinders.  Putting those situations aside, have you been working at your business for 2-3 years and you’re still using the business as an excuse to avoid your responsibilities at home, for not contributing to the family account? Check out this post, “Is Your Business Your Lover?”, for some additional insight. Additionally, perhaps you’re treating your business as a hobby.   If you’re not sure, here’s a helpful post for you, “Is Your Business a Hobby or a Real Endeavor?

How do you determine if he is just being practical or if he is resentful and unsupportive of you building your blockbuster business?  It is best not to dismiss gripes, but to respond in a compassionate manner.  Ask him what he is worried or fearful of. Listen carefully to his response. Perhaps he’s worried about the future of your retirement accounts or is feeling ignored or sidelined. He may even be worried about your health.   You can make bargains like Nina did.  A stay-at-home mom with a rockin’ transcript business. When she started the Show me the money, honeybusiness, Mike was very leery, so Nina made small bargains with him. Such as, if she made $X in XYZ time-frame, they can purchase/do ABC.  Then she upped it a little with each new bargain. Over time, the “bargains” gave him concrete examples of her dedication and the potential for the business. Barbara, a lawyer who struggled to get her private practice going in the early years, consistently hit income goals. In other words, she hustled and her husband worried less.   Nina and Barbara didn’t come from an adversarial perspective but rather worked with their husbands to have their goals met. You’ll also need to address the issue and come to a thoughtful, realistic agreement that you and your husband can both live with.

Have you tried those tactics and your husband is still critical and unsupportive, but you know you’re building a blockbuster business?  Well, you’ve come to the right place.  Humans are created and wired to connect.  And those connections need to be supportive, helpful and encouraging.  By the way, I’m not talking about rubber-stamper-yes-people.  They can be just as detrimental as nay-sayers. But, that’s another post.  We need people in our corner building us up, not tearing us down. The world and our own inner critic do enough tearing down.  The community at Till Business Do Us Part will support you (Hug) and give you the practical advice when necessary (Shove).

Hug and a Shove,

Annette

How Healthy is Your Business?

healthy businessHopefully, you check in with your doctor and dentist, annually.  You might even schedule an every 6 month cleaning at the dentist, and some annual required exams, after a certain age, or if you’re in a high-risk category.  But, have you considered doing the same for your business?  Your business has a pulse and you need to keep it strong to withstand market volatility and crises (they happen to every business, so it’s best to be prepared).   Following are some key performance indicators (KPI’s) or metrics that every business owner needs to know:

  • Financial Metrics

Cash Flow, Balance Sheet, P&L are the basics.  Make sure debt as % of revenue and net income are the basics, too.  Whittle that number down every quarter.   Be sure to include industry specific metrics, too.  As a manufacturer, I need to know inventory turns and labor rates. Another financial metric I watch is the funding level of an emergency account to the equivalent of 6 months expenses.  My favorite game changing book is Profit First, by Michael Michalowicz. Mike challenged all my assumptions about sales (expenses) = profit. Bottom-line?  Profit shouldn’t be considered last.  My company is leaner and more profitable since I read the book (about 18 months ago).

  •  Professional Development

Education, Leadership Training, Coaching, Motivation and Success, Industry Certifications.  No one operates in a vacuum.  As your company’s leader, you need to get out of the office and be among your peers.  In addition, you need to stay abreast of the latest thought leaders.  Have at least 2 business books going at all times. Commit to reading 2 dozen business books a year. Don’t know where to start?  Read E-Myth, by Richard Gerber.  A seminal business classic.  He distills why we all need to process our business functions.  Well-told story, too.  Take an on-line course or two to improve your skills and hire a coach; a good great one.  Your hand should be shaking when you are hitting that “enter” button to pay for their fees.

  • Employee Metrics

Appreciation, Retention and Development Programs;  Sales p/employee, employee hours (sick-time, overtime, accrued vacation time); company benefits, timed response and satisfaction rates for employees directly involved with customers.  Employee manual updates need to be logged, as well.

  • Customer Metrics

Without your customers you wouldn’t have a business.  So you better know this one up, down and sideways.    I know my customer demographics and my end-user stats (they are not always the same).  I measure the # of orders, the AOV (Average Order Value), LTV (Life-Time Customer Value [tip: breakout the profit, too!]), CAC (Customer Acquisition Cost), CPC (Cost p/conversion), conversion % (for e-commerce stores; otherwise closure rate), CRM (customer relationship management) stats, return %, pipeline stats (# of visitors to store, sources of customers, etc…), social media stats (# of followers, posts, re-tweets, etc…) every week.

  • Process Metrics

Process is more than IT or engineering.  Process metrics monitor, evaluate and improve processes company wide. From the simple, how employees answer the phone, to how refunds are processed, to the more sophisticated EDI for inventory controls, process is part of every company.  You think this doesn’t apply to your company?  Again, I encourage you to read E-Myth.  Mr. Gerber takes us on an entrepreneurial journey with Sarah, a fictional small town pie-maker.

  • Sales & Marketing Metrics

Though closely linked to Customer Metrics, classic numbers to follow are ROAS (return on ad spend) for each channel/medium, # of blog entries (and stats on those [tip: watch what’s effective and replicate it]), sales p/employee and p/account executive.  Do you have a metric to track follow up of calls, brochures, inquiries? Dollars are left on the table if you have no formal process system.

  • Strategic Metrics

I left the most important for last.  You need to spend time working on your business not just in it.  If you take 1 day p/month, off-site, to just think, dream and strategize about your business you will be farther ahead 1 year from today.

Things to think about are: where do I want the business to be in 1 year?  What does it look like? How can I get there?  Who or what will I need to get there?  Who are our customers? What do they look like? What do they need?  What can I give them?  What isn’t being met in the marketplace today? What strategic partnerships should I pursue?  What do they look like? How do I get there?  How are we perceived in the community? What can I do for my employees? What’s my exit strategy? Should I sell? To whom? My employees? A competitor or strategic partner? How do I prepare for that now?  Will I leave it as a legacy for my family?  Should I liquidate?

At bare minimum, you should review the above metrics at least once p/month.  Only then can you address problematic trends, or dedicate more resources to solutions that are working.  Once you have them identified consider consolidating them to a dashboard on your computer screen.  Domo and GuidingMetrics are two I like. All the info and basic stats in one place changes the way you manage your business and your team.

What did I miss?  Post your helpful comments below.