The Right and Wrong Way of Infusing Cash Into Your Business
None of us are gonna say no to more money, right? And if your business grows to the point where you need to bring on employees, you’ll need money to do it. With that extra help comes additional expenses like taxes, so what can you do to increase the money flow when you need it? In this episode, I want to talk about how to strategically infuse more cash into your business.
1:17 - What is an accidental leader?
4:05 - Why I’m not a fan of running sales on anything you’ll want full price for later on
5:45 - The only two times I’d encourage entrepreneurs to do a strategic sale
8:27 - A real-life example of how NOT to do sales and marketing
10:50 - How being smarter about your sales makes marketing them a lot easier for you
12:26 - Your assignment for this week and how to avoid devaluing your main offer(s)
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As Mentioned In The Right and Wrong Way of Infusing Cash Into Your Business When You Need It
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Transcript for The Right and Wrong Way of Infusing Cash Into Your Business
Hey boss, I am Leslie Lyons, your embodied leadership and sales coach, and this is Pleasurable Profits. This podcast is ideal for owners and leaders of tattoo shops, permanent makeup studios, cannabis businesses, movement studios, sex toy shops, and other industries that are too often left out of the leadership conversation. If you’re looking for a woo meets strategy approach to defining your strengths and values, designing a business that supports you, and creating a soul-driven, and of course, pleasurable plan for profitability, then let’s get started.
Hey, party people. I hope you're doing well. I'm doing great, thank you for asking. As we wrap up January and get ready to head into February, I'm really going to be focusing on what I'm calling leadership rehab for all of us accidental leaders out there. You know you're an accidental leader, I've said this before, if you are a person who got into business because you had a really strong passion, a really strong skill set, and you never had any intention on growing a team. It was never your dream to have a corner office with a hundred employees. That was never part of your dream.
Your dream was basically you wanted some time freedom, you wanted to make an impact on this world by using your skill set. I get it. But your business grew because you did your job so well and now your business is plateauing because you don't have the right people on your team. That is what I call an accidental leader. Somebody who never really wanted to grow a team to grow their business. They were always happy being a solopreneur. But here you are, managing a team, trying to figure this out.
In February, we're going to go deeper into how do you figure that sh*t out. But I wanted to talk today about selling and how to infuse more cash into your business because in order to hire the people that you need, you're going to need money to do it and you're probably going to need more money than what you realize that you're going to need. I am a huge advocate, especially for brick-and-mortar businesses that we hire everyone on as employees. We don't have the liberty, most of us, to hire contract employees.
Now, if you run a studio, a movement studio, if you own something where you can get away with temp workers, that sort of thing, okay, but that's not the majority of the brick-and-mortar businesses that I work with. We need consistent people on our team that's 100% bought into our vision and our values and serving our customers. That is their main job. That's their primary focus so I'm always going to advocate for a business having employees.
With employees come additional expenses. You've got employee taxes. You can slap on another 20% of what you're paying somebody just for employee taxes. You're going to need some more money. If you want to offer benefits, whether those are standard benefits or fringe benefits, you're going to need some more cash. I thought what a great way to close out January would be talking about how do you infuse your business with cash and talking specifically about sales pricing strategies.
I am not a fan of businesses running, especially if you've got a service-based business, meaning I'll use a pole studio because that's obviously something I'm very familiar with, I am never a fan of running sales on products such as your classes or your workshops and those sorts of things on things you're going to want full price for later. It makes it very difficult to convey the value of what you do if you're constantly putting it on sale.
Why should I ever pay full price for it? What's different about what you're offering me now for double the price that you were giving away on a Crazy Larry fire sale that you were doing three months ago when your revenue was tight? I often find that it's really helpful for clients to just decide, make a decision about how many sales a year you're going to run.
I am a huge proponent of only doing a couple of sales a year. I took that right out of Nordstrom's book. As someone who offers premium services, meaning you're offering high-touch experiences, you're offering a high-touch environment, high-level service is super important that you don't give people the impression that this is a discount experience by constantly throwing out a sale. Two sales a year is what I advocate for and those sales should be tied to slow periods in your business.
Again, using the example of a pole dance studio. I know for a fact that when Thanksgiving and Christmas roll around, like clockwork our sales will start to decrease. Y'all know the feeling if you own a movement studio out there, you know what I'm talking about. It's like Thanksgiving rolls around and folks get real funny with their money. That's when people start asking if can they put their memberships on hold. That's when membership payments start to decline. It's hard as hell to compete against Santa Claus.
Knowing that you're going to go through that low period from November through January possibly, having a strategic sale during that time just for cash flow purposes to keep you afloat makes sense. The second time that I encourage studio owners to do a sale is in the summertime because, again, you're competing against nice weather now and especially if you're someplace like I am in the midwest in Chicago where I swear summer is like three days and people want to be out and about in the weather so they're not trying to be in my studio, I know attendance is going to drop and the same thing that happens at Christmas happens over the summer.
Can I put my membership on hold? Payments start to decline. People are hesitant to sign up for a membership because they aren't sure if they're going to be able to use it fully, that sort of thing. By putting a sale there strategically, not just because I need to make more money, but knowing that in my business there are these two pivotal times of the year when revenue is going to decrease come hell or high water and it has nothing to do with my product, it has nothing to do with the quality of service I'm providing, it has everything to do with the time of the year, that is a strategic way to infuse cash in your business.
Let's say that you are a clothing store. Same thing. You should be able to look at your business and say, “Historically, when are slow periods in our business? When do we see sales drop?” Nothing other than it's just that time of the year, that's when you would want to strategically put a sale. What I hate to see is what I call the Fashion Nova version of selling and marketing.
Every day, I get a text message from Fashion Nova. Sometimes, three-four times a day, I get a text message from Fashion Nova that is offering me some wild discount. It's like every day is Black Friday at Fashion Nova. Either the discount's going to be between minimally 30% but as high as 60% and this is all they do all the time is inundate us with sales, “Buy my sh*t. Buy my sh*t. Here's a code. Here's a code. Don't you want to buy?”
I see brick-and-mortar businesses look to emulate that like, “Well, if I keep giving people incentives to buy, they'll buy more, right?” No, what you train people to do is to wait for a sale and never pay full price for your services. That's what you train people to do. It's like, “Why should I ever give you full price for something that could possibly be on sale tomorrow?” No consumer wants to feel dumb. No consumer wants to feel cheated. That's how the hell I would feel if I paid full price for something that's going to be on sale tomorrow.
When you’re constantly giving people discounts, constantly giving people sales, you're training them not to buy now and to wait on a deal. If you need cash in your business, why would we do stuff like this? Again, it goes back to being the accidental entrepreneur, the accidental leader where you didn't have this experience, you didn't work in a retail environment, you didn't work in a traditional corporate environment.
You're just looking out into the abyss seeing what other people are doing and you've heard all the things from your favorite marketing guru, your favorite marketing consultant on a podcast that's like, “You gotta stay top of mind. You gotta stay in front of your people. You got to be marketing all the time.” So you're just like, “Okay, trial and error. Let me try it.”
But let me tell you, this is a mistake that will be hard as hell to come back from. When you need money, I'm willing to bet if you sit down and look at your year, you will see that you need money the same time of the year all the time. If you get in the habit of just scheduling your sales, it will make things a lot easier for you when it comes time to market those sales.
Think about it, if you're only doing two sales a year, Black Friday and the summer, at the beginning of the year, you could get all your marketing collateral done for that, you could use the same emails over and over again for that because you could actually come up with a system to promote those sales way in advance so you're not even having to think about that. That's one less thing on your plate that you know is on autopilot, that your admin is going to be able to help you to execute, that your front desk is going to be able to help you to execute because you plan that stuff out in January. Talk about ease. Talk about space.
The more that we can plan out in our business, even when it comes to infusing cash in our business, the more space you have to do the strategic things in your business to come up with a new product, to come up with a new marketing strategy, to come up with how you're going to expand your team. The energy that you will free up by systemizing sales in your business, heaven, heaven.
That’s my assignment for you this week is to look at your schedule, look at your financials over the last years, and basically say, “Hey, these are times of the year that sales drop. We need to plan a sale. What is that sale going to be?” That's step one. Then step two, going back to the fact that I don't like to put things on sale that I'm going to ask full price for later, that might mean you coming up with, if you own a pole studio, for example, you coming up with a class pack that you only sell during these sales periods. It doesn't exist any other time of the year. They can only buy it two times a year. That way, you're not devaluing what you sell every day.
For example, let's say that typically, you sell packs of classes 4, 8, and 12. Well, for the sale, maybe you sell an unlimited pack of classes or you come up with a 10-pack of classes, something that you don't normally sell because you normally sell 4, 8, and 12 so you come up with this 15-pack or this 10-pack, something that they can't buy normally so when it's gone, it's gone. That creates some scarcity, some urgency around purchasing as well.
I hope that makes sense. Once you get this rhythm around your sales process, like I said, there's going to be space and there will be more money to cushion during the downtimes because you've acted like a CEO and you’ve planned for those dips. Alright, my loves, if you need help, you know where to find me. Until next week, happy selling. Grace and peace.