MBA1715 Q&A Wednesday: I’m constantly stressed thinking my business will go under. What do I do?

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Hey oh welcome to the 100 RMBA Show. Powerful business strategies you can count on every single day with our daily 10 minute business lessons for the real world. I'm your host, your coach, your teacher Omar Zenholm. I'm also the co founder of the $100 MBA, a complete business training and community online over at 100mba.net Today's episode is a Q and A Wednesday episode. On our Q and A Wednesday episodes I answer a question from one of you, one of our listeners. If you have a question you want to ask, just email me over@Omar MBA question is from Sharon and Sharon asks. Hey Omar, Love the podcast. I run an e commerce store and I've been doing it for about three years now. And in the three years I've been constantly stressed out about going under. Even though it's been three years every month, I'm not sure if I'll be able to stay open the next month. It's taken a toll on my health, my family and my passion for the business. What should I do? Would love your take your advice. Anything would help. Thanks for everything you do Omar Sharon Sharon, I total totally feel for you. You are not alone. So many entrepreneurs go through every single day what you're going through yourself. It is totally not easy. It will affect every part of your life when you're not sure if you can keep the lights on every single day and you don't want to give up, you don't want to be a quitter. You want to keep going and you want to succeed. And I've been there several times with several different businesses. It's not a fun state to be in, especially because it gets old. You've been in that state for years. So in today's episode I want to share with you some steps you should take to alleviate yourself distress. And these steps will also allow you to evaluate if this business is worth you pursuing. The good news is, is that you're not going to have to make that decision. The business is going to make its decision for you. I'll explain in detail in today's lesson. But most of all, I'm going to give you something that you can do today to make a change in your business to get you out of this feeling, to get you out of this stressed out phase. You need to treat this like an emergency because it is. This is your life. You should not be living day to day stressed out like this. Let's get into it. Let's get down to business.

You've made it on time for the McDonald's breakfast menu. You think to yourself, finally, I could start my day with my perfect breakfast. But what if breakfast could be even more perfect with the hot honey sausage egg biscuit? It finally is. This won't last forever, so go to McDonald's and get it while you can. Ba da ba ba ba.

I want to start today's lesson by applauding Sharon for asking this question. It's not easy to be in the state where you feel helpless, where you feel stressed every single day, where you're not sure if the business will continue. You don't want to disappoint your customers, you don't want to disappoint your employees. The weight of the world is on your shoulders. Some of us feel even too embarrassed to ask for help, to ask for some advice in this situation because it's not a flattering position to be in. You feel like you should be doing better. You're in a feeling of, or a state of depression, really, and a state of desperation. So first I need to just state the truth. I need to state the facts, the reality of the situation. If you have a business that you're not sure if you can keep the lights on month over month, for years, there's something wrong, there's something you need to change. This is not working. It's okay if you're in this situation, maybe a few months, a quarter, even a year, but three years, that's. That's a long stretch. So I want to just state the fact that you have to do something, and I'm going to give you some steps to take today. Secondly, you have to recognize the cost of all this. It is not only, you know, running this business that's stressing you out, that feels like it's about to go under any day is not only you know, costing you time and money and effort. It's costing your life. It's costing your life. This is very much in line with our guest teacher lesson this week by Ad Ad Pinar. He talked about this in his lesson. So go ahead and listen to that episode. It's going to help you fully grasp the costs of all this. There's also the opportunity costs. You know, if you stop working on this business and work on a new one, then no one can get you better results. That's a better use of your time. So what do we do to move forward? I'm not telling you to close the doors. I'm sure you love your business and you started it for a reason. But we want to make sure it's a healthy business that serves you and doesn't drive you insane. Number one, we're going to go back to basics. Let's take a look at our profit loss sheet. How much money are you making versus how much you're spending? And probably the reason why you're so stressed out is because those two numbers are probably very similar or even your, your losses or your expenses are more than how much you're making, your revenue, which is causing you all this anxiety. And if this has been the state for years, what you need to do now is make some changes. Here are the changes that I recommend you do. Number one, raise your prices. That's it. Raise your prices at least 10 to 15% across the board. So you are an e commerce store like yourself, just raise all your prices from 10 to 15% across the board. Yes, there'll be some customers that will not buy from you because you're a little bit more expensive than you used to. But most will, most won't affect them that much. And that difference of the price increase is going to help you make more money than you're spending, alleviate the stress. You can do this right now. Like you can literally sit down on your computer, go to your inventory and change your prices right now. Just mark them up 15%. Too many businesses are running on very, very thin margins because they want to keep their prices low. It's just not worth it. Okay, Most people, the price is not that important. Especially a 10 to 15% increase doesn't make a huge difference to the customer versus you as the business. It makes a huge difference on volume. And this is applicable to low cost items, high cost items. If I were to buy a book that was Normally, let's say $10 and you increase the price to $11.50, 15%, I wouldn't really bat an eye. It wouldn't really bother me that much. $10 and $11.50 kind of lives in the same place in my brain. I'm not second guessing it. It's not worth me shopping around for $1.50 if it's a higher priced product. Let's say, for example, I have a hotel and normally my hotel rooms, peak season are$505.75, which is 15% is not going to change my mind. It's not going to make me feel like, oh my gosh, this is so much more expensive than it used to be. So increase your prices today, okay? That's going to help a lot. Number two, you're going to do this as well as increase your prices. You're going to lower your expenses by 15%. So take a look at how much money you're spending every single month to run your business. Let's say, for example, your expenses are $10,000. 15% is $1,500. Okay? You need to shave off $1,500 from all your expenses. You have to do it now. Why? Because you want to make sure that you're profitable. Now. I'm saying 15% with the understanding that maybe you're breaking even, maybe you're just a little bit over, meaning you're spending more than you're making. But if you're spending a whole lot more than you're making, then take that percentage. So say, for example, you're spending, you know, let's say 15% more than what you're making. I would take that 15% and add another 5%. So that'd be 20%. So I want to reduce my expenses by 20%. So take that total amount of money and see where you can shave off that total amount. So we talked about $1,500. If your expenses were 10,000, where can you stop spending money? What services can you cancel? Where can you negotiate some rates? Call your vendors? If it means having to move somebody from full time to part time, you have to do it. You have to make some tough decisions, right? Because your life, your health, your well being is suffering. And you need to make some decisions now. You got to shave off that amount of money. And if your business can't run without that expense or expenses that you're shaving off, then it shouldn't be running at all. Okay? You need to be running lean. And that's what I was talking about that your business will tell you if it's worth running. So if you increase your prices, drop your expenses by the Percentage of difference that you're making versus your spending. If you're breaking even, I say you go 15% straight. Boom. It's going to help you big time. If you do that and for some reason, whatever you cut is just not allowing the business to run, then your business is just not feasible. It's going to tell you it's time for you to pack it up. My guess is that it's not that you've been running for three years, so you have product market fit, but you just need to fine tune your finances and slow down a little bit. Sometimes we try to take on more than we should and we sacrifice ourselves and our well being to expand the business and to make hires and all that kind of stuff. You will be surprised how much you can do with less. So we've increased our prices, we lowered our expenses. Third, I don't know if Sharon's doing this or not, but I need to make sure that I say this for everybody who's listening. You need to pay yourself. If you're not paying yourself, you're just sacrificing yourself for the sake of the business. You are asking for trouble. You're going to have to close down the business because you can't pay your rent. So make sure you pay yourself first. So if you don't have a salary yet, make sure it's one of your expenses, even if it's just covering your bare essentials to live your life and pay your personal expenses. And factor that in in terms of lowering your expenses. So if you have to add this, add that and then drop it by the percentage you need to make sure that you're profitable plus 5%. Why? Because if you can't keep a roof over your head, if you can't enjoy a good meal, if you can't take care of yourself, it's very hard for you to take care of your business. It's very hard for you to think clearly. You feel like the walls are closing in and you feel like you have no security. This is a horrible state to be in. Do not do this to yourself. And again, if you can't pay yourself first, then again the business is not feasible. You have to make sure that you pay yourself first. And this is advice particularly to somebody like Sharon who's been running the business for three years. My next tip is about growth, is about how to get out of this stage so that you can have the next step in your business. And a lot of people think about marketing. They think about how do I get more customers through the door. How do I spend money on ads? I'm going to back up a little bit and tell you all of that is good and all, but sometimes we forget the most important thing in our business. You need to take a look at why your customers buy from you. What is the reason? Is it your service? Is it the quality of the product? Is it the quick delivery? Is it the experience? What is the number one reason? Find out from your customers. Survey them. Understand, without this one thing, customers will never buy. Basically, this is the most important thing about your business. If this is done well, everything else could be mediocre. For example, if I run a software company where the software's job is to send out social media posts or tweets or whatever it is to your social media accounts on a schedule. So for example, if I ran a restaurant, let's say a low cost fast food restaurant, let's say I have a falafel stand. Everybody comes to my stand because I have the best falafel in town. If for any reason I have a bad batch of falafel and it tastes horrible or they're burnt, nothing else matters. It doesn't matter if I have fancy napkins. It doesn't matter if I greet them with a smile. It doesn't matter if I have a nice seating area or not, or if it's just takeaway. All that stuff. Doesn't matter if the falafel are disgusting. Right? That's all that matters. So you need to find out, what is that thing in your business? What is the thing that you have to nail? Okay, why is this important? Because you want to double and triple down on this. You want to make sure that it's even better. It's excellent. You never let your foot off the gas when it comes to this because this is your moneymaker. This is why people buy from you. Really. Everything else is nice to have. Even if it's not perfect, they'll live with it. Okay, but make sure you never keep your eyes off that one thing. That is the reason why people buy.

Dear McDonald's, your breakfast menu. Fire tens across the board. I could be happy with anything even though I ordered the same thing every time. Thanks for not judging me. I'll try something new next time.

Maybe score a two for five dollar deal on a sausage McMuffin with egg and more. Limited time only. Price and participation may vary. Cannot be combined with any other offer single item at regular price.

Ba da ba ba ba.

To wrap up today's Q and A Wednesday question from Sharon Being stressed about keeping your business alive is a reality for many of us. I've experienced it in businesses in the past in Webinar Ninja. Hey, it's not easy. You want to make sure that you realign your business. You make sure that you are not spending too much, that your prices are going up, that you charge more for your customers. And of course you pay yourself so you're not totally stressed out and you triple down on what works best for your business, what gets customers through the door and keeps them there. If you do these four things and in a few months, your business is still not doing well, you need to consider, maybe I'm not actually offering what customers want. Maybe I'm not doing it at the scale that customers need. I don't have enough customers or enough people that have this pain point. What if I tweak it? What if I pivot? What if I change? What if I offer something that my customers are begging me for rather than me trying to push it on them? This is when you need to reevaluate. But my guess is if you've been in business for three years, if you do these four things I just mentioned today, it's going to help you tremendously. It's going to give you a sigh of relief, it's going to allow you to think more creatively without all that pressure. And it's going to give you a chance to really recover and then move things to the next level with confidence and with profit. Thanks so much for listening. If you have a question you want to ask, I can definitely answer it for you right here on Q and A Wednesday. Go ahead and email me@omar mba.net if you loved today's episode. If you love this podcast, share it with your friends and family on social. Go ahead. You can screenshot it, you can go ahead and post it and give the reasons why. I love it. Thanks so much in advance for doing that. Before I go, I want to leave you with this. Stress is a killer not only for your health and your well being, but for your business. When you're stressed out, so is your team members and that pours into the way they communicate with you and your customers. It's just a recipe for disaster. So you need to mitigate stress as much as possible with pressure and short term stresses. You know, you could be running a launch, you know, the team is a little bit on edge for the for a couple weeks or a month and then you get past that and then you have a recovery period and things are back to normal. That's fine, but long term stress is just not sustainable. It's really going to cost you your business and possibly years of your life. Thanks so much for listening to the Hunter MBA show and I'll check you in tomorrow's episode. I'll see you then. Take care.

Of You've made it on time for the McDonald's breakfast menu. You think to yourself, finally I could start my day with my perfect breakfast. But what if breakfast could be even more perfect with the hot honey sausage egg biscuit? It finally is. This won't last forever, so go to McDonald's and get it while you can. Ba da ba ba ba.