I know this from experience… The beginning of your business feels like a constant hustle. Like you are stuck in the day to day grind and you’re just hustling one day after the next. Truth be told, that phase is REALLY hard, and sometimes people make it seem easier than it really is. You might feel like you are just working your ass off all the time, and I promise you if you are here, it will pay off! If you are already way past this point, you can probably relate to experiencing that level of sucky-ness through all of the hard work and the hustle, but you also know that is DOES pay off… Big time.

I hit my first seven figures in about a year and a half, but I worked my ass off and it really sucked at the time. There were plenty of moments when I wanted to quit. There were more moments when we changed things and I thought, “what on earth am I doing?” “Why am I doing this?” “Why is this happening to me?” We all go through the suck of those times. You need to know that you are not alone in this. I know what it is like to have days where you just want to give up and you ask yourself questions like… What am I doing all of this for? Why are we changing that? We have to pivot AGAIN? Why don’t we just keep everything the same? And some days you might even have thoughts like… “Wow, that was a terrible decision.” or “I made the wrong move.” And I say all of this because I know what it is like to have those fears. I know from experience what it is like to feel this way, and I want you to know that those feelings are completely valid, and it’s part of your journey as a scaling CEO.

Through this journey you are going to face a lot of decisions, and some will be harder than others but you might always have in the back of your mind that voice that wonders, “was that the right decision?” In this week’s blog were covering how you can determine if the decisions you are making in your business are paying off, and these are three things to look at to know if you’re making the right moves!

Increased revenue & profit margins
New customers & reach
Enhanced operational efficiency and productivity

Is Your Revenue And Profit Margin Increasing?

If you are changing things up in the business in any way, and you start to see an increase in revenue or profit margin, this is a good sign that the changes you made were the right ones. Here’s a real-life example of this that some of you might be able to relate to… Let’s say that you are an e-commerce brand with an online store and you are going to implement new marketing strategies. This could look like hiring a social media manager, hiring an ads agency, or adjusting your marketing strategy in some way. You are going to be spending more money and increasing expenses to hire that social media manager or ads agency, but you have to look at what happens over the next few months.

You might be spending more money to make these changes, but let’s say that with this example, you see an uptick in website traffic, which leads to an increase in sales and an increase in your profit margins. This increase in those numbers would indicate that the decision to invest in that social media management or ads agency was a good decision that has paid off and helped you scale the business.

This is where we can see the importance of data. It is so key to be able to see and understand your data. There is a cause and effect for everything. If you are making a change in your business and then you look at your data, it allows you to see the indication between the changes that you made and what is happening as a result of those changes. The data allows you to see the direct correlation of the cause and effect. Of course, we want to see good things happen as a result of the changes we choose to make, but sometimes you have to stick it out for a few months to really test it and see what happens in the trends and the data. We always recommend testing things for at least a quarter, and after that, if it is not giving you the right results and not paying off, then you can always disengage or make another change.

Is Your Customer Base Expanding?

Another really good indicator that you are doing things right is if you are starting to reach new customers. This can, of course, depend on your goals. If you have a goal of getting more revenue from your existing customers instead of bringing on new ones, then you might have to adapt the decision that you are making to get those results.

Making different decisions is really about thinking outside of the box. You have to get creative, you have to go with your gut and listen to your intuition. Let’s say for example that you have a software company. You want to reach new customers, and so you decide to expand into new markets beyond your initial audience. You’ve eaten up all that you can within your current niche and audience, so you have to do something different to reach those new clients. As you scale your business, you launch targeted market campaigns and it allows you to reach that broader demographic and expand your reach to new customers. You look at your data and you see a steady increase in new customer signups and this really shows you that those strategic decisions that you are making are going to pay off and have a positive impact.

This can translate to really any service provider or course creator. Let’s say that you are more of a generalist and you have a course for using a program like Asana, and you sell your course to every business owner. Some might think that you are reaching everyone, so that’s a good thing, right? While that can be true it is also not making you an expert. You might make a decision to focus on women business owners instead of all business owners and nail down a more specific demographic. This could show that sometimes lowering the audience and targeting a more specific demographic could allow the marketing campaigns to talk directly to them to then sell more. You are still making a change, then looking at the data to see if the result was positive or if it got you closer to your goals.

Again, it’s about cause and effect and going back to the numbers to see the effect. What we do and recommend is taking your P&L monthly, you can either print this out or do it virtually, and make notes on your P&L each month. So when you either print it out or do it virtually, each month you can note down what changes you made so then you can see what are the changes you are making and how are these changes affecting your P&L. The next month you’ll be able to see if there was an increase or a decrease and determine if was a result of the changes you made last month or even a few months prior.

One other thing to note here is that you don’t want to be making a bunch of changes all at the same time. The more changes you make at the same time, the harder it gets to see what the cause and effect of each of those changes really are. When you become well-established in business you generally have an idea of what works and what doesn't but you are still going to have to pivot and make changes. At this point, make only one or two changes at a time so you can look at your data and see what the cause and effect are and move forward from there making more data-driven decisions.

Are You Working Smarter Not Harder?

Another tell-tale sign that the decisions you are making in your business are paying off is if you notice enhanced operational efficiency and increased productivity. You have to come back to the bigger picture and look at your goals. Do you want to work less and become more efficient? You have to get creative and really explore what changes you can implement to have that effect.

Let’s say for example that have a service-based business. Your business is well established, you make good money, and things run well. You invoice your clients, they pay you, your bookkeeper goes in and records everything, and it’s all good plus you’re making good money, it’s all perfect. But you have a problem and it is that you work WAY too much. You’re working constantly and you're just burnt out. When you are in business for a really long time and you are just used to doing things a certain way, it can get redundant and feel like there is no possible way to make a change because you are too close to home. You get so convinced that no one can do what you do and it gets even harder to make those changes. You have to start looking at what you could do to become more efficient in your operations or bring someone into the business to support you.

When you start to really take a step out of that day-to-day and come back to the bigger picture, you have to start making decisions that will create positive change in the company. You make the decisions for the cause, and then you look at your data to see the effect.

When it comes down to it, every decision that you make in your business will have a financial impact. This is why is it so key to know your numbers and have someone in your corner who can make it make sense for you because you are going to need to understand your data to determine if the decisions that you are making are having a positive or negative impact on the business.

Knowing your numbers is not only going to help you determine if the decisions you are making are the right ones, but it is also going to help you feel empowered in making the next decision to keep moving the needle forward. Your journey of scaling your business is going to be a big series of pivots, making changes, seeing the impact, and adjusting. You have to be able to understand the cause and effect of the changes that you make.

This is where having the right financial advisor to consult with can help you see things from a financial standpoint and understand the financial impact of your decisions. We are going to help make the numbers make sense and help you use your financial data to determine if the decisions you are making are paying off in the ways that you desire. At the end of the day we want you to feel empowered and confident enough to make the decisions, and we are going to stand behind you no matter what. If you’re ready to have this level of empowerment and understanding while scaling your business grab a free consultation with us here.

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About Me

Hey! I’m Alyssa Lang, the founder of Magnetic Bookkeeping & Consulting.

I’m a Financial Strategist, Bookkeeping Consultant, public speaker, podcast host, two-year nominee for Ignition’s Top 50 Women In Accounting, as well as the Founder of Magnetic Bookkeeping & Consulting, a financial advisory team of experts that help ambitious creatives and service providers tackle their books with ease and confidence.

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