Let me tell you why winter is the perfect time for assessing your business and planning for the future…
When I was younger, winter was my least favorite season. It was Bare. Boring. Sad. Lonely. Dark. Still. And cold.
You might understand my disdain for the season since I’m a 7 on the enneagram (an ENTHUSIAST!). My personality wants almost anything but stillness and the possibility of actually feeling negative feelings.
The problem was, I didn’t realize winter had a purpose. It felt more like a roadblock to progress.
Now that I’m getting older, and sitting still enough sometimes to listen, I’m falling in love with the “most dismal” season.
I was taking a long hike with Luna the other day. And I looked at all the shades of brown and gray on the bare rock. They looked more beautiful than I had remembered. There was something comforting in their austere fortitude. They felt solid and grounding.
Then I noticed how the visibility of the area had expanded. All the leaf barriers had disappeared. I had not seen the waterfall across the ravine from this point on the trail before. But there it was. Gorgeous and gushing in the background.
I never realized how close this trail was to a steep drop off because the beautiful and cozy canopy of leaves enveloped the road during summer. I had no idea danger lurked nearby. And I couldn’t see how far the river wound through the valley without the trees releasing the old growth.
Choosing a Different Outlook
I used to conflate winter with death. Actually, that’s how I viewed stillness. Melodramatic much?
And it’s true the leaves and beautiful growth from spring and summer die away in the autumn. But the tree doesn’t. And neither does the soil beneath it.
Through slowing down and gardening, I’ve come to see that winter equals rejuvenation rather than death.
It’s a necessary break. A time to rest. Reenergize. Look inward. Slow down. Nourish my own soul.
And it’s only through this rest that nature *and I* become fully productive when it’s time to bear fruit again.
And… all of this resonates with me philosophically. I feel these words as I write more than ever. And yet, practically, my mind says, what does that mean I should be “doing”? 😂
Though it might sound like it, I’m really not trying to put a to do list together for myself. And yet, I am growing into the understanding that nature still “does things” in winter.
Resting is doing!
Meditating is doing.
Releasing is doing.
Even relaxing requires attention, focus, and effort. These are all action verbs, after all!
But it turns out, doing and taking action doesn’t equal wrestling.
Following nature’s seasons requires action, but it doesn’t require fighting, struggling, hustling or exhausting ourselves. (My whole body has been rejecting hustle culture for years!)
It’s the opposite.
Following nature reveals that action looks less like scurrying and more like rejuvenation.
Over the next few weeks, I’m sharing how I think we can learn from nature this winter and apply ***winter action*** to our business in a way that rejuvenates rather than exhausts us.
Winter Action Tip #1 – Review & Assess
My first winter action step comes from observing what happens during winter in a garden. If you’re a yard farmer, like I am 😉, winter is the perfect time to think through what worked and what didn’t during the last growing season.
For example, the okra in my yard did amazingly well. I popped seeds straight into the ground, and I did almost nothing after that. The plants grew to about 7 ft tall. They had beautiful flowers, drew lots of pollinators, and once it started raining again, they produced plenty of okra. I will definitely do that again!
However, the rabbits, squirrels, and birds ate my cabbages before I was able to harvest anything from them. The squirrels did the most damage of all of my scurrying friends. I found them constantly digging all over the yard. And they would do it right in front of my face!!! The nerve!
If I grow brassica in the back yard again, I’ll need to use barriers like netting. I may also plant some marigolds to keep the critters at bay. I don’t mind sharing some of the crops with the wildlife, but I’d like to at least have a bite for myself!
What does that look like for your business?
I like to use the winter to think back over all the investments and initiatives I tried in the previous year. Here are a few items I review in my wintertime assessment.
Reviewing Your Budget
1. Since I use the Profit First method for budgeting, it’s pretty easy to take a look at the following:
- Did I maintain my gross margin goals? In my case, I’m working to keep a 70% – 75% gross margin. That means, when I measure the revenue I generate, I don’t want to spend more than 25% – 30% in costs to deliver that service. I include subcontractors as a cost to deliver. So, I don’t want to pay subcontractors more than 30% of the income I’m generating on any given project.
Watch how I calculate Real Revenue in this Profit First video here.
My accounting team at include this line item (and the calculated percentage) in one easy P&L report in my Quickbooks account. They know this is an important number for me to watch, so they made it easy for me to watch it.
– What’s the difference between my Target Allocations for each Profit First Account and my Current Allocations for each Profit First Account? And what do those differences tell me about how my business is running?
Watch my video here on what to do when Profit First Allocations go wrong.
That’s why I think it’s important to look at the difference between your current allocations and your target allocations. Your business is telling you whether it’s thriving or surviving. And your numbers can pinpoint exactly where you’re struggling, so you can give that area the attention it needs.
What was your ROI?
2. Did the investments I made give me a return?
Here’s a quick video I put together about measuring a return on investments.
I’m a firm believer that the investments you make should give you a 5 to 10 times return within 12 months. Now’s the time to look at each investment or initiative you made in the previous 12 months.
Don’t forget that most investments need at least 12 months to mature and give you a return. We’re in this for the long run, so if you just made an investment, wait for it to mature before you decide to can it in the new year.
But it is a GREAT time to make a note of investments to watch over the year and what return you’re expecting. Make sure you know what kind of investment you’re expecting. It might not be financial. Maybe you’re looking for a way to increase your time away from work. If that’s the goal, write it down so you don’t get confused when you’re assessing the investment later. When you get more time to spend away from work, count it as a win!
Other items I review and assess:
- Which articles, emails, web pages, posts or videos received the most interaction in the last 12 months?
- Which articles, emails, web pages, posts or videos received the least amount of interaction in the last 12 months?
- What services have the highest profit margin and which have the lowest?
- What services do most clients purchase?
- How many leads am I generating? And where are they coming from?
- How long does it take me to lose or convert a lead to a client from the time they come our way?
- What percentage of my leads convert to clients? Does that change based on the source? Does that change based on the season? Does that change based on my marketing spend, email campaigns, consistency of blog or social media posts?
- Are there any clients that cost me more money than they generate in revenue? Can I change that?
Many of these questions can be answered by completing a Pumpkin Plan Top Client Assessment. Not sure what that is? Shoot us a note at firstname.lastname@example.org with the subject line: What is a Top Client Assessment?, and we’ll give you a break down of how a Top Client Assessment can give you the information you need to grow a more profitable business with clients you will LOVE to serve in 2023.
Planning for This Year
3. Was there anything you didn’t plan for or track last year that you should plan for and track this year?
Here’s a great example. In 2022, we spent money on marketing and advertising, but I didn’t have a marketing “budget.” For 2023, I’m creating a separate account for marketing. It’s now planned as an investment, and I’m allocating money to that account each week.
Also, this is a great time to chat with your accounting team about creating a line item for this expense. Thankfully, we already had an advertising line item in QuickBooks. So, I did a quick review of our expenses to make sure I applied all the money I spent in advertising to the correct expense account.
Making sure I put the expense in the right bucket helped me see that we spent about 4% in marketing and advertising last year. That’s not nearly enough if I want the business to be in growth mode! So, I know now that it’s time to readjust some of my operating expenses, so I can allocate closer to 10%+ to marketing and advertising.
In a 2022 article on marketing budgets for growth, Forbes Magazine said you should spend 5% to 10% of your revenue in advertising to MAINTAIN your business revenue. If you want to grow, they suggest 10% – 20% of your revenue should be spent on advertising.
There are other seasons where you’ll be churning out the work! But my opinion is now is the time to embrace the winter. Spend most of your time thinking, and you’ll be ready to generate big things when the spring rolls around.
And stay tuned for more Winter Action articles to follow! We’ll walk through what resting, covering, and pruning looks like in your winter business over the next few weeks.
Here’s to slowing down, creating rest, and nourishing our business and our souls.