Cristina Barragan, Posh Peony
Cristina Barragan is the Owner and Chief Creative Officer at Posh Peony. Posh Peony is known for producing luxury and lush floral designs with an emphasis on personalization and an elevated client experience. She runs a boutique-style studio that provides full-service design and educational workshops at a local and international level.
This is the last post from our recent webinar, Back to Basics, and features five Principles of Profitability business owners should focus on to ensure success.
Running a profitable business can be challenging and there’s no doubt there may be a few bumps along the way. While no plan can account for every obstacle, adding these five strategies to your business planning is an excellent start!
Have a Money Mindset
One of the first concepts you should embrace is the decision to be successful. It may seem simple, but limiting beliefs are one of the reasons companies fail to thrive. As a business owner, you need to determine what matters most to you and then act accordingly. Are you most interested in financial success? Critical acclaim? Helping your community? By choosing what you define as success, you set the tone and strategy for your business.
Another key piece of having a money mindset is getting comfortable with fear and discomfort. It can be difficult both personally and professionally to be the one in charge. Situations and clients will stretch your limitations, making your feel uncomfortable. Asking for the business, driving the sales your business needs, and negotiating with vendors are all tasks that not everyone is comfortable with. Focusing on your strengths, being patient with your mistakes, and practicing gratitude and positive affirmations are all tools you can use to stretch your limits and ensure your success.
Know + Understand Your Numbers
Many business owners don’t start with a goal or understand how to achieve it. The best place to start is knowing and understanding your own financial numbers. Start with deciding how much you want to make:
- Set both a gross and net revenue goal
- Define your expenses:
- Operating expenses
- How much do you need to make? Want to make?
- Take the time to put together a spreadsheet with a calculator that shows the amounts of each of your primary business expenses and what is left after all your hard work!
This is another concept that is regularly mentioned but is sometimes poorly executed by small business owners. Every expense should serve a measurable purpose. If the expense doesn’t add value, consider eliminating it!
Where can you cut the fat?
- Subscriptions you don't use
- Expenses you can live without
Where can you save time?
- Streamline with systems
- Delegate + hire help
You can't manage what you don't measure
- Stay in touch with in/outputs
- Know your burn rate
- This may be the most important number to understand. How much money do you have to make to keep the lights on each month? Knowing this can really help you think through planning, downtimes, and business needs.
Raise Your Prices
Raising prices is always a tough idea to consider. No one wants to price themselves out of the market or lose business to customers who don’t have the budget for what they are requesting. It does, however, come down to math.
- Are you covering your costs?
- Paying a sufficient salary to you & your team?
- Ensuring a profit for your business?
Are you making the profit you need to reach your goals at your current pricing levels? If not, raising prices may be the best strategy.
Know When to Say NO
This may seem counter-intuitive but most of us have taken on projects that we later regretted. Be sure to:
- Set Boundaries
- Value your time
- Prioritize what matters most
- Consider the ROI
When you say NO now, you're saying YES to something better later!
We hope these strategies for ensuring profitability are helpful! Be sure to check out the other posts from the webinar on proposals and production.