A Hand To Mouth Existence Won’t Benefit Your Consulting Business – But The Good News Is, It’s Not The Only Path
This was originally posted on my Seven Figure Consultant LinkedIn Newsletter. Subscribe today to get insights about how women are building powerful and impactful consulting businesses.
I questioned whether to write this.
It might seem a little unhelpful to be pointing this out now.
Isn’t it kicking someone when they’re down to offer a postmortem analysis of their business problems? How does it help to have this discussion now?
But, I’m not writing this for the business owners who have been forced to close already because of Covid. I’m writing it for the people who are still up and running, and worried they may be next.
There is so much we can learn in any situation where a business has to close.
What tripped people up?
What is the biggest issue that small businesses are struggling with at the moment?
It’s easy to look at the surface issues and say, for retail and hospitality businesses the loss of footfall has meant many have been forced out of business.
But when you dig a little deeper you’ll see the loss of footfall doesn’t have to be the end of the business, or at least it wasn’t the only thing that tripped them up.
When a business is forced to close, the surface issue is the loss of footfall. But the underlying problem was there was an assumption in operation that the cash would keep flowing in. The business was set up in a way that meant money had to come in every month in order for the business to stay viable.
The example I’ve given here isn’t talking about a consultancy business. But the idea is still highly relevant and highlights an issue that many businesses aren’t aware of.
A hand-to-mouth existence isn’t a good way to run a business. And yet it’s something that many businesses use as their default mode of operating.
In some ways, it might seem like this discussion is like closing the barn door once the horse has bolted. But focusing on business reserves is a really important topic to be featuring at the moment because many business owners, and many consulting business owners, are way more aware of their vulnerability than they have been previously.
And that makes it a great moment to take stock of this, and to put in place some simple, but fundamental, changes in your consulting business so that next time a storm comes (whether it’s another wave of coronavirus, or something completely different) your business has the ability to bounce back in a way it didn’t the first time around. That’s what makes it a great time to be thinking through some of these broader issues.
In this episode of the Seven Figure Consultant Podcast, I discuss:
- What business reserves are, and why they matter
- How much cash you should be holding in your business
- What to do right now if your reserves are zero (or near to zero).
And I’d love to hear from you. Do you have a reserve of money in your business bank account? And a strategy for growing it month on month?
Free Report – The Six Elements of a Seven Figure Consulting Business
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It’s the framework that helps consultant women like you find their feet and get back to leading the business, rather than being buried in client work and back-end business operations.
Thanks for reading! I’d love to hear your feedback and future topics you’d like me to feature.