Book Recommendation: A Framework For Running A Profitable Business That Works for Consultants As Well As Entrepreneurs
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 don’t recommend all that many business books. But every now and then, I come across a stand-out title that I’ve found genuinely helpful and that truly makes an impact.
A book that I love, and recommend widely is Profit First by Mike Michalowicz.
If you’ve ever felt like you’re not bringing home the money you want to be for your business, especially if you’re spending out quite a bit each month – this book is a great place to start.
And your consulting business may never be quite the same again!
The central premise of Profit First is that you need to run your business finances so that you don’t view everything that comes in as potentially money to be reinvested.
So many of us fall into that trap when we’re new in business. We’re told we need to spend money to make money, then the more we make, the more we spend. And we often pay ourselves last which means we’re working hard, generating revenue, and not feeling the benefit of it.
Instead, the book teaches you to split out every payment that comes into your business bank account into different ring-fenced accounts: money for bills so you can run the business, pay your tax bill, pay yourself, and then set aside money as ‘profit’.
All good so far. But here’s one way I would differ in implementing this kind of system in your business.
The book encourages you to view the ‘profit’ money as for fun. Holidays, fulfilling the dreams that many people have when they start their business, but many never seem to get around to achieving.
It’s a part of your business journey that isn’t unimportant – after all, it is all too easy to work hard and then deny ourselves the lifestyle and little luxuries that the money coming in can buy.
But the great thing about a Profit First-style framework is that you can customise your ‘pots’ in whatever way you like. And in this episode of the Seven Figure Consultant Podcast, I talked about this style of financial management system in your business being a great way to start setting up financial reserves in your business – which is essential for the long term viability of your consulting business in a changing and uncertain marketplace.
The result? If something happens that makes a dent in your revenue (like a global pandemic), you can keep your business going for months. I implement this in my own business and I encourage all my clients to do the same.
These reserves also allow you to be more selective with the clients you take on – which again can be a big temptation to struggling businesses in the current economic climate. I also talked about this in more detail in my most-downloaded podcast episode to date – 037 Should I Work With Someone Who Isn’t An Ideal Client?
While there’s no such thing as a stress-free consulting business, keeping a cash reserve helps take out as much of the avoidable stress as possible.
And tell me, what’s the most impactful business book you’ve read? One that really changed the way you run your business?
Free Report – The Six Elements of a Seven Figure Consulting Business
I’ve created a free PDF report called The Six Elements of a Seven Figure Business. It’s my most popular free resource and in it I outline the 6 areas of unscaled businesses that need to change in order to move past being ‘booked up and burned out’ and shifting into that higher gear that gets you cruising again.
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.