This Financial Deep Dive was different. I had never met the client, and didn’t know a single thing about her business.

All I had was her financials.

And DAMN. I knew the whole story before she stepped foot onto that zoom screen.

Here were my predictions:

1. She had huge demand for her services in the past, so she responded by adding a ton of capacity (capital intensive) and now although she has way higher sales, her profit has plummeted.
2. Now her overhead has gone up with non-billable staff to support the growth.
3. She pays everyone else more than she pays herself, even though she is technically still billable.
4. She is more generous than the market average with her wages and there’s not enough money to cover the overhead. (THIS IS SO COMMON WITH FEMALE FOUNDERS!!)
5. She is burning out and can’t afford to live on such a small salary for much longer.
6. While everything is going “great” on the outside, she is barely making it personally.
7. She had moved from one Sweet Spot and was currently in a Valley of Death trying to get to the next Profitable Plateau.

Unfortunately, ALL of my predictions were true. And unfortunately, this phenomenon plays out over and over and over again with small business. So, she is not alone.

And that was validating. It was also validating that I was able to diagnose her problems. All she was seeing was a sinking profit. She was too close to the numbers to know why.

And I am hopeful for her! There are many ways out of this situation.

1. She can increase her prices.
2. She can increase capacity even more to get to her “Sweet Spot” (which is the ideal ratio of sales to overhead. I am obsessed with helping people find this, because it doesn’t necessarily mean massive growth.)
3. She can renegotiate the staff’s compensation plan and be honest about how it’s not financially sustainable.
4. She can decrease overhead expenses by systematizing or streamlining processes to be not as human driven.

The beauty of getting bloodwork done, is that you get to stop wondering and start having some answers. You can take ACTION. You can take supplements, change your diet, or look into specific issues. You move from a passive participant to an active role in your health!

And this is the exact same with your financials. SO many women entrepreneurs ignore their financials, or are not committed to listening to the story they are telling. They think they are “bad at math” or don’t understand how to read their statements.

But when we rip the bandaid off and get CURIOUS (there is absolutely no judgment!!) they can start to feel empowered and take ACTION!

ALL businesses have sweet spots where their capacity matches their sales. But what happens when we see that next growth plateau up ahead and want to level up?

We have to go through a “valley of death” to get there. Valleys of death are periods of time when you have to expend resources (time and money) to level up. The skills that got you to this level are also not the same skills it's going to take to get you to the next level! (Think of how different it is being a solopreneur vs running a team! Now you need management skills, and you spend most of your time running a team vs actually doing the work.)

Come dive into this topic in this workshop, find out where you are on your business’s growth trajectory and how to avoid burning out in the Valley of Death! Join us on August 14th at 10AM for the Business Sweet Spots & Valleys of Death Workshop. RSVP today. Spaces are limited.

About the Author:

Rosemary Brensen is a creative business coach & intuitive magic maker! She resides at the juncture of badass financial prowess and colorful magic confetti explosion. She helps women entrepreneurs build the businesses and lives of their dreams through growth strategy, creative visioning processes, financial deep dives and 1:1 mentorship. Hailing from her experience co-owning the Portland Garment Factory, she has seen it all and is here to help her clients through the messy and lonely gauntlet of building profitable, easeful, and thriving businesses! 

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To learn more about her work, go to: www.departmentofcommunity.com. Interested in working 1:1 with Rosemary? Click HERE to request One-on-One coaching through Xcelerate’s Business Advising Program.

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