Updated: Dec 23, 2022
Did you know that 80% of businesses (less than $25 million in annual revenue) don't have a good, solid foundation? Most of them are living paycheck to paycheck.
So how does a small business grow their quilt shop when most of them live paycheck to paycheck? By implementing these four building blocks.
1. Knowing Your Why
It's no wonder that smaller, micro-sized businesses are doing even less. I believe they're doing so poorly because they don't understand their why in business. And then, they don’t share that why with anybody. They don’t talk about how it benefits their employees or how it fits into their business plan.
Your why is going to help you define the foundation for your business. It will make all the other pieces come together: a written vision and mission plan, immutable laws, and core values. These pieces are important because they give you the purpose for your business. They help you understand what you’re working on, why you’re moving forward, and what you’re working towards.
2. Predictable Cash Flow
After you have identified your why and shared it with your team, you need to make sure you have predictable cash flow. This also includes predictable income for you.
When we work with clients, this is one of the first things (after your why, of course!) we identify, so your sales and revenue are consistent. You must have predictable money coming in to continue to grow your business.
You have predictable cash flow when you understand your ideal customer.
Do you know who your ideal customer is? Do you know what they want and how to find them? These things are all super important! You may not realize it, but you do have favorite customers. You do have a particular niche or area that you really want to be working in.
3. Business Operations
The internal operations of your business are the last important building block. This is your cash flow - both incoming and outgoing. Instead of focusing on sales (like in building block #2), this step focuses on your cash out for your expenses. It’s critical to your business to know what you are regularly spending money on.
You’ll want to have a cash management system that promotes profit. That’s one of the reasons I love Profit First so much is because it makes sure I’m making money every single week! It is the best system that you can find to help you manage your cash.
Efficiency is when you make sure you have the right people in the right roles. It’s also making sure you are working in the areas you need to be and outsourcing when appropriate.
As a quilt shop owner, you’ve got to make sure you have the right systems -- employees and software. If you have something that just isn’t working right in your business, then change it.
Once you have that figured out, you can look at the next area that you need to be focusing on?? What’s the next right thing for your business?