Setting Your Business Up For Success in 2023

Welcome to A New Life podcast with Pamela Jean where it's all about empowering women to empower more women. Get ready friends, to create a new life. And here is your host, Pamela Jean. Hello my friends and welcome to this week's episode of A New Life podcast. This is Pamela Jean. Thank you so much for joining me today my friends. We are talking about setting up your business for success in 2023. My podcast today is going to be dedicated to business owners and entrepreneurs in my world. So welcome. So glad you're here. I absolutely love the topic of business. It sets my heart on fire for sure. Everyone starts a business for various reasons. I think it's safe to say that most small business owners don't set out to be a business owner. I don't wake up one day and say, you know what, I want to be a business owner today. Some people do, but not all. Rather, I think people fall in love with a craft and decide to turn their craft into a business. Which is exactly was exactly the case for me over 33 years ago. Maybe you were motivated by the idea of being your own boss or found yourself unemployed for whatever reason and decided to dive into entrepreneurial ship. But one thing I think we can all agree on is business ownership is hard. Really hard. In fact, according to the Small Business association, over half of all small businesses will not make it to five years in business and only a third of small businesses will see their 10th birthday. So that statistic in itself can tell you that running a profitable small business is very difficult and very challenging for my motivation for self employment was really twofold. I first fell in love with portrait photography and as a new mother at the time, I wanted to be able to spend more time with my daughter. This was over 33 years ago. I naively thought that I could build a business part time. That is a laughable joke. It took me all of two or really a month to realize it wasn't going to happen that way and working part time just wasn't going to be an option. Hard work, discipline, grit served me well and I'm proud to say that I am a 33 year long self employed entrepreneur. I'm very, very proud of that. You know, working for myself has created so many opportunities for me. When my kids were in school I was able to make it to nearly all of their special events and activities. Homeroom mom was a I absolutely loved and had the best time with and I don't regret, you know, the sacrifices I made to be able to do that. You know, now it's not to say that I didn't work insane, crazy hours because I definitely had to to build and grow my business. In fact, I remember when my son was born, my second child. When my son was born, I would put him to bed around 8pm and dive back into work until he woke up for his midnight feeding. And then I would turn in and actually get a few hours sleep. But then I was back up again at six in the morning to start to do it all over again. You know, truly a labor of love and wouldn't change that part of my life. You know, there are pros and cons to everything, and business ownership is more of a pro to me. I think sometimes people set off to open a business thinking that I'm going to just manage my own schedule and I'm going to work when I want. You know, that's a great fantasy, but the realities of business ownership is that you will work more hours than you would ever work if you punch the time clock working for someone else. There's a reason why ownership is hard and there's a reason why only half of them make it to five years old and a third of them make it to their 10th birthday. So the idea of thinking that I'm just going to open a business so I can just work less hours, etc. It doesn't always work that way. I just don't want you to be romantic into thinking, you know, it's easier than what it actually is. So, you know, here's another funny story. My youngest daughter was born on a Thursday, and I was back to work with her in a bassinet on my desk on Monday. That was probably like the shortest maternity leave ever. But it was holiday season, she was born in November, and I had clients to take care of. And in the portrait world, holiday season is very, very busy. I had deadlines to meet, you know, but honestly, I love to work and the benefits served me well as my family. You know, the really great thing is when my kids were growing up, I would get their basketball schedule or volleyball schedule or baseball schedule. And as long as I knew well in advance, I could schedule my clients and my work around their activities. Not to say I didn't have to make up that time later, but at least I got to be at many of their events. I didn't miss very much, and I'm really grateful for that. Now, diving into my new division of work, my life coaching and business mentoring has absolutely been amazing. You know, locking arms with fellow business owners to complete and execute a business plan is so rewarding. It's truly a gift to be able to use all of my years of knowledge and guide other business owners to reach their success. I have a new business coaching program and only a handful of of business owners will qualify to become a part of this program. It's called Business battlefield. It's a 12 month program and it is so intense. So if you are ready to do the work, I'm ready to lock arms with you and walk alongside of you. Send me a DM if you would like to see if you qualify for the Business Battlefield Coaching program. What I love about this business is the coaching business is that I can truly work from anywhere. I have grandchildren all over the country and my coaching business allows me to travel, see family and continue to serve my clients. Truly a win win. But if you're looking at getting serious about your business this year, I want you to consider the Business Battlefield coaching program. You will be amazed at the progress that you are going to make in a year if you're willing to commit to something as intense as this. So do you know why over half of new small businesses close before year number five? It's actually the business part of the business that gets tricky. Many new businesses have no idea how much it costs them to be in business. Like how much is it going to cost you to produce your product that you sell or the service that you offer? And if you are a business owner and you don't know how much it costs you to be in business, you are really, really going struggle. This, my friends, is a huge reason why so many will close before year number five. That and the fact that they don't have the operating capital to keep them going through those lean years as they're building up their business. So I'd like to do a quick little teaching for you and explain how you figure out how much it costs you to be in business. Now I like to break it down to an hourly metric. An hourly rate. That way, as I'm planning new products, as I'm scheduling things with clients, I always have that cost of running my business in the back of my mind and I know how efficient I need to be. I know what I need to price my product at to reach my profit goals at the end of the year. So knowing this information can be a huge secret to your secret, your future success. By knowing your hourly rate of doing business, you can price your products and services properly and you will not be a time waster. Time is money. When you know how much your time in business is costing you. Trust me when I say you will create efficiency and a strategic business plan and you will not waste a minute because it's really, really important. When I work with my business mentoring clients this is one of the biggest aha moments when you figure out how much each product or service takes to produce or create and then do the math to identify profits. So there's so much revealed in doing this. In many cases, my clients are shocked to learn that they are underpriced, they're spending way too much time to produce certain products and services. And you are. They may be even in the red with many of their products. Imagine if you did this work and then realize that you're not making any money. And technically you are paying your company to go to work at your own company. It's crazy. Crazy. But that is really why most small businesses don't see year number five and very few see their 10th birthday. So it doesn't matter if you own a portrait studio, run a hair salon, an accounting firm, you are an attorney, an architect. It doesn't matter what business you're in, you still have to know and have a really good handle on your cost of doing business in order to create the future and life you would like. Once you analyze each product and identify your profits, you can make strategic changes to reach your business and financial goals. And really the goal in business is always profits and wealth generating. Think about it. The more abundance and the more wealth you create through your business, the more abundantly you can give to the causes and charities of your desires. That's what it's all about. For me. Having a life of abundance in business is not about just having a big bank account. It's really about having the abundance through my business so I can give abundantly. That's what it's all about for me. So let's start with this. When figuring your cost of doing business, you will start with every expense you have for your business. From building rental to the box of thumbtacks. All of those things need to be accounted for and everything in between. Now I have included included a sample expense list to kind of give you a place to start. And I will have that in the show notes and you'll have a an area where you can download a PDF and that's my gift to you for listening today. It'll at least it may not be everything for your business, but it'll give you a place to start. Starting somewhere is better than starting with absolutely scratch nothing. So it'll give you a good place to start. So now you might be wondering what if you have a home based business and do not have that commercial space, or you're not renting a brick and mortar type of business, you still technically have office space expenses. Here's the best way to calculate what your home rental should be. So figure out the square footage your business is consuming in your home. The footprint of your home office. What is the square footage of that? For instance? For instance, if your business is using a quarter, a fourth of your home's square footage, then a quarter of the house payment should technically be the rent your business is paying. You should be paying yourself rent out of your business. You'll make the following sample formula out of utilities and anything else that you are using and consuming in your home. So a quarter of your utility bill should be taken care of by your so technically, even though you're not renting commercial space, you're working out of your home, you still have your home office that you need to be paying for. You need to set your business up for scaling and growth and leveling up. And if you have the mentality of I don't have any overhead because I work from home, then you will never ever be able to scale and level up because you technically are never paying rent. So you have to, have to have to start off on the right foot there. So once you have all of your expenses itemized, every single expense from car payment to subscriptions, education, anything that you need to run your business, you will total all of those expenses up that cost you for the entire year. Once you have that big number, you're going to divide, divide that number by 12 representing the 12 months in the year. Then you'll take that number, that total and divide that by four because there are four weeks in each month. Then you will divide that number by 40 or the number of hours you are open for business. So if you are open for business 30 hours a week, you'll use 30. If you're open for business 40 hours a week, you'll use 40. You'll divide that number by 40 that my friends will give you the hourly rate of running your business. Your hourly cost. It's very important and much needed information to price your products properly to be able to meet your profit goals and scale and level up and grow. Now if you are, if that's confusing to you, by all means reach out to me and maybe the Business Battlefield course is right for you. That program is intense. It will walk you through. I will hand walk you through how to figure that out because it's so important. Now the next step to strategically pricing your products to make the sales that you want. And let's not forget a sales strategy and techniques. Many people think that selling is an icky part of business, but really that is where the gold is. That is where you make your money. So I will cover pricing and sales techniques in the future in a future podcast. But I want to go back just a little bit to that hourly number. So if your hourly number is $125 per hour to run your business, or it's $200 per hour, whatever it is for your business, depending on the nature of your business, that number is going to be different for everyone and how you'll figure out, for instance, for your product, if I take in consideration a photography studio, I need to look at every single product that I create. Meaning like a family session or a children's session or a newborn session, how much does it cost me to produce that particular session? You will start with how many hours do you have invested in creating that product? So if I have, you know, eight hours invested in creating a product, meaning the pre consultation, the photo shoot, the sales appointment, and then the post processing and editing, you might end up having eight hours invested in one session. Well, if I have a cost of doing my business is $200 an hour, that means it cost me $1600 to create and produce that particular product. Now if in the sales room I'm not making more than sixteen hundred dollars worth of sale, I have lost money on creating that session. So I know that's a little bit complicated and it may be a little bit confusing to you, but I want to illustrate that to you just the importance of understanding how much it costs you to create your products and services that you offer your clients. And again, this is pretty heavy and pretty deep work. If you want to talk to me about the Business Battlefield, I would love to have a conversation and see if your business qualifies to be a part of that program. It's not for everyone. It's absolutely not for everyone. It is really for the people that are dead serious on growing a business this year. Okay my friends, that is a wrap of the podcast today. In the future I will be getting into more strategically on pricing as well as some sales techniques in the business. In the business world. If you are a business owner, an entrepreneur, and need help with the foundations of your business, send me an email at Pamela Jean a new life gmail.com I have several incredible options and as I said, that business Battlefield is 12 months of coaching, focused on completely building your business. Two coaching sessions per month with a 30 minute one on one coaching call with me and email support throughout the month. I also have a one week coaching opportunity to fast track you to the results that you want to need. A monthly mastermind that focuses more on goal setting and goal mapping. Friends, I look forward to serving you on a personal basis soon. I love what I do. I know that I have knowledge and information that can help you reach your goals and help you create the life of your dreams. Make it a great day, my friends. Thank you so much for joining me and we will talk soon. Thank you for joining us today on a New Life podcast. We will see you next time.