Is Your Business Health Ready for The New Year?

AYF/GF 112 | Healthy Business

 

This year is nearing its end and whether you’ve been rocking it or not, next year is going to be an amazing opportunity to bounce back or bound even further. How healthy is your business now? Are you ready for the new year? Merrill Chandler takes the time to share some simple things that you can do to make sure that you’re starting 2021 strong and fundable. Do you think you’re up to it? You wouldn’t be here if you weren’t!

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Is Your Business Health Ready for The New Year?

10 Simple Ways To Make Your Year Amazing

I’ve got part two of our get ready for the end of the year show. I’ve got some amazing things to help you check off everything you need to do to ensure a successful year conclusion as well as plan for what 2021 is going to be and how to make it the best year possible.

We’ll have part two of our year-end planning. What do we need to do to make sure that we’ve done everything right and at the right timing so that we can close out our year with success? You and I both know because I’ve done it and I’m sure you’ve done it as well. We end up looking at February, March or April, and barely are we getting the year completed. We don’t want to wait until then. We’re going to be busy building a big beautiful 2021. Next year, we want to be bigger, bolder, better, and far stronger than we did this year. To do that, we want to make sure that we tie this baby up in a bow by December 31st, 2020, wherever possible.

There might be occasions where it’s not possible, but we determine that. We don’t leave that to others if we start in advance, start planning, and do the things that I’m sharing with you. I know I’m going to be ready. In November 2020, I’m having my executive team meetings preparing for my full team meetings in December 2020 so that in January 2021, we’re kicked off with new goals for the new year. Wrap up accounting, taxes, and make sure that we’ve spent all the money that we can this year so we have fewer taxes. Let’s get to part two of our year-end planning. If you haven’t seen part one, we talked about using the slingshot strategy for a better new year.

There are three parts to this because it is such a powerful way to end the year. It’s a powerful set of strategies that are going to create a dynamic positive effect for you. Make sure you check out. If you haven’t seen part one, you may even want to consider checking into it again. Make sure you’ve done those things first. Also in the notes, you’re going to find the checklist that I’m going through here. You’re going to see this checklist and we append it. We keep expanding it so that it’s more and more comprehensive. Go to GetFundableBusinessChecklist.com to download the most recent version of the checklist so that you can dot those I’s and cross those T’s in your business planning.

We’re going to look at the thousand-foot view here. For us to close out the year successfully, we need to know where we are standing. Where are we now? This alludes to what we talked about in part one, but not just a hokey list, make a clear list of your achievements. You want to know what you accomplish for two reasons. The first reason is we need the juice. If you’re check listing and you’re not passionate about what you got done, that you’ve accomplished some of your goals or even all of your goals, if you don’t reward yourself, then you need to go into my show library and read Take The Win. If you’re not willing to take the win, then why are you doing this in the first place? We’ve got to take the win. Make a clear list of your achievements. You want to know what you’ve done so far this year.

You’re also going to make an evaluation of your team members, your employees, and your contractors. If you’re fixing and flipping, you have 1099, contractors, employees, team members, partners, you want to evaluate how well everybody has done against those goals, achievements, and things that you didn’t achieve. You want to know every team member, employee, and contractor, everybody needs to know how they have done, how they are doing, and most importantly, what success looks like in their position. You’ve got contractors, employees, and team members. If they don’t know what success looks like, then they’re not taking their own wins. If your team is not taking the wins, it’s less likely you get to take the win at a more global company-wide level.

Always evaluate the performance and give them an indicator of how they’re doing against a measurable standard that will help you. You also want to take a look at your P&L. Look at your annual spending. Take note if you have a budget. Are you already over budget? Are you near budget? Are you under budget? The over-under on your budget is less important than setting a budget in the first place. You want to at least set a standard of what it takes to operate your business and then you can always take the feedback.

If you’re 20% over, that might not be a realistic goal, so you reset the budget in the upcoming year. If you’re under, near, or barely over, then you’ve got positive feedback. Tighten a few belts to pull some string, turn some dials, and you might be able to choose the same budget. That budget is going to help you increase your EBITDA, your profits, etc. You need to know where you stand before you do anything else because we can’t know where we’re going unless we know where we are. Let’s say Kansas City is funding town.

[bctt tweet=”Make a clear list of your achievements. If you’re not willing to take the win, why are you in business in the first place?” username=”GetFundable”]

It’s a different journey from Miami to funding town, San Diego to funding town, Seattle, Washington, or New York City. Every journey is different. The destination may be the same spot, the journey is going to be different based on where you are, so we need to lock that down. We need to find out what it is. Your achievements, performance of employees, so that they know how they want and where the failures were, and we can tighten that up, and notice the over-under on your budget. The next thing is once you’ve got those in play, you want to review your financial goals.

You want to see how you’re valuing your products, your services, the flips, and the ROI on the deals that you’re doing. There are two ways to do that. This is between you and your accountant, but there is the cost-plus. If it costs me $20,000 to do this thing then I’m going to charge 25% or 30% or whatever. The other side is value and leverage to your customers. I go back to the parable of the mechanic. A manufacturing plant is going through the process of the day-to-day manufacturing gobs of products and then all of a sudden, it shuts down.

Every hour that that line is shut down, it’s costing millions of dollars because of no production. The foreman calls in the mechanic and ten minutes later, the thing is up and running and then gives a $3,000 bill, and like, “Why are you charging me $3,000 for fifteen minutes?” The mechanic wisely and which proves my point, it isn’t the value of the time, it’s the value to the client or customer. He said, “It’s not how much time I spent solving the problem, it’s all the knowledge it took for me to understand the problem and fix it quickly. It’s which bolt to turn.”

You’re going to be evaluating your business or products and services in 1 or 2 ways, cost-plus or value to the client or your customer. Make sure that you revisit that every single year. You want to know how you fit within the micro economy of your particular products, services, and your niche. You want to know what that is. Are we still doing cost-plus or are we still doing value add? That’s your income statements. What are you selling to bring in income? You also want to look at your balance sheet. What assets do you have?

What liabilities and equities in the business? How much cash, liquid assets? How much illiquid, non-cash? Things that we might take some time to liquidate to create cash. You want to know a clear picture of that. You’ve got to work with your accountant, not on March 15th to April 15th. You want to work with your accountant on November 1st through the end of the year to tighten up and revisit all of your assets, liabilities, and entire balance sheet. My accountant hates Marches and Aprils because everybody waits until then to do the books.

We are planning so that every entry that we do until December 31st is calculated and planned. My strategic planning is on the advice of my accountant. I’m just passing it along because it’s a smoking idea and it’s working for us. You do the same. Make sure that your balance sheet is in line, whatever you’re going to be depreciating and whatever strategy you’re going to implement. Make sure that they’re done beforehand. If you need a big cash expenditure so you can write it off, you know beforehand rather than buying huge things on December 31st because you don’t have any planning in place.

The other one is your cashflow statement and your P&L. You want to know where your money is coming from, reevaluate. We’re in the process of doing this ourselves. This year, we added new income streams. Some are electronic products and events. You need to make sure you have updated your income categories so that there is a fair representation of where your business is coming from. Without knowing where your business is coming, you don’t know what your yields are, and you’re a little befuddled and confused about where to put your efforts. We need to know what the highest yields are, the big wins or the home runs. Those highest yields, we want to grow for the next year.

Let’s take a look at tax planning because there are the actual books but then there’s planning for taxes. You’re going to be splitting the income and maximizing your depreciation claims. What can I write off immediately? What do I take some time over? All this goes to your accountant. I can’t weigh in on some of this. I know that I’m doing it now at the advice of my accounting team and our strategic planning. Notice I put those two words together. You don’t want just a bookkeeper or an accountant. You want a strategic planning partner for your business. You get to evaluate where to put your time, what the priorities are, and what you value.

AYF/GF 112 | Healthy Business
Healthy Business: The destination may be the same, but the journey is going to be different based on where you are.

 

I chose an accountant. Does it cost a little bit more? It does but I want somebody else’s wisdom and experience so that I don’t step on accounting and tax landmines. It’s like I coach you how to stop stepping on funding landmines. I don’t want to step on a tax and accounting landmine. I go to a pro like you come to me for my advice when it comes to your fundability™. I go to professionals’ advice and I pay for it because it’s the most valuable thing that I can do when it comes to strategic planning. You want to make sure what is going to be spent or written off versus what you’re going to be depreciating. Real estate investors and note folks out there, there’s a whole complicated chess game you need to do there. Do it before the end of the year, not in March and April, and setting extensions.

For those of you who’ve been bingeing this, you hear me talk about psychic drag. There is nothing that creates drag like having undone planning work strategies where you’re doing it for the past. I’m selling it to you for how much I bought it. If you have the ability of the team to do this by the end of the year, imagine how much more clear thinking you have while preparing your taxes. It’s on your team to file them without any additional fees or penalties. Sometimes we’re trying to implement strategies in arrears. That’s what I call psychic drag. It’s worrying about the past while you’re building your present and your future. Make sure you eliminate this psychic drag and let’s get it done before the end of the year.

The other thing you want to do is reevaluate the contribution of your partners, your team members. Some of you may have been in partnerships or have employees who have a pool for a revenue share, working for X number of weeks or years vesting in order to own stock or ownership in the company. Whatever it is, revisit and say, “Does it still apply now?” If your goal is to create and engender positive relationships with your team and get everything out of them because you’re giving them everything that you can, that is a spectacular partnership. Make sure that you reevaluate any equity positions, stock options, partnerships. Evaluate them every single year and make sure that they reflect the contribution of the last year.

None of us just work for money. We’re looking for a payoff, for that juice, to build something bigger than ourselves. Employees can do that thing if they’re given the right framework and incentives, etc. At the end of the year, look and see how everybody is doing. Some of you like we do, there may be year-end bonuses. Those year-end bonuses are a function of the success of the company, department, or team. Evaluate those every single year, so you can set up new frameworks, so everybody knows what it means to win. If every single person on your team does not know what it means to win in that position, it’s already a failure before the year even starts.

Let’s give everybody on your team and your partners, what does it mean to win? What does success look like in this position or the partnership? For some of you, especially those who are building QFE’s, there might be a chance where you’re going to change the business structure. Some of you might be a solo member LLC, and you want to move it into S Corp. There are only so many days at the beginning of a year to do so that they’ll backdate it. If you’re doing an S Corp, if you’re converting to a C Corp, do those things before the end of the year. Make sure you pay attention to your counsel and your advisor team. We’re starting a whole new department that’s being done in the month of December so that its books are ready to go on January 1st. It’s clean and clear. There’s no borrowing money from this company to that company.

You want to create everything so that the clock switches on December 31st if you’re a calendar tax system. Most entrepreneurs don’t do a tax year separate from the calendar year. If you do have a fiscal year that does not end on December 31st, then do everything that I’m telling you to do 2 to 3 months prior to the end of your fiscal year. Most of us entrepreneurs usually go by calendar. The next thing you want to do is update your social media channels, data, any address change, and movement of who the managers are. When was the last time you looked at your LinkedIn? You’ve got to revisit.

Make sure that you have backups on all your platforms. Your external hard drives, back it up to the cloud and you’re not susceptible to a loss. A true story, several years ago, we were getting ready to move into an online portal with our database. It has been an island database, meaning it’s in a physical location in our office and only the members of the team have access to it. That way, it wasn’t hackable. It’s not even available. It was an island server. Because it was an island server, when the hard drive went down, the backup failed, and we lost about three months’ worth of development work on the client portal. We had to go back into earlier versions of our data, makeup from PDFs, credit profiles. We had to catch up on all of our client files.

It was a pain and unsettling for some of our clients who had to send us something again because we failed them on our part. I have seven redundancies on two different platforms, one on a hard drive and in the cloud so that everything is double backed up on a daily basis. Make sure your data is on a safe platform and is being backed up. You want to keep digital copies of important files, documents, contracts, agreements, and make sure those are backed up. You want to make sure that you have a file naming system that helps you move through the year. One that we use ourselves is we do it the European way.

[bctt tweet=”You want to at least set a standard of what it takes to operate your business and then you can always take the feedback #GetFundable” username=”GetFundable”]

September 1st, 2020 would be 20.09.01, the year, month, and day then we put a space dash space and then we describe the rest of the naming conventions. That way, everything is organized by year, month, and day so we know what the most recent version is of any document. The end of the year is a great time where we got sloppy throughout the year. I’m going to revisit what I said about your social media. Update everything. Look at the logo versions. If you’re branded with your name or image, at least once a year you change that image. If you’ve got people working for you, they may be changing it on a quarterly or monthly, but make sure you update it at least annually. Keep it fresh and open so that people don’t associate with just an image, they associate with you as a person. You have all these different images.

New Year Goals

Sometimes, we let this stuff slide. That’s what the year-end checklist is for. Make sure that you stay on top of that. The next thing is, where are your goals? Where are you headed? What’s the action plan and the strategies you’re going to implement? Under this section, I’ve got a process of ten things for us to review. The first thing you want to do is establish what is the single biggest limiting factor inside your business? What’s the one thing that keeps pushing back against your progress? It was an archaic way of delivering our services to our clients. That’s a thing of the past, but it was our greatest single limiting factor.

Every year we continue to update our engagement with our clients. That’s number one, what’s the biggest limiting factor? If you’ve got three limiting factors, you’re going to go through these questions for each of them and come up with a plan. Number two, what are ten potential ways to push back and make those limiting factors less limiting? It may not have been available a year ago or a quarter ago. Knowing where you are right now, what’s limiting you? What can you do now that is going to push back against those limiting factors? Since I had developed all the algorithms and the magic inside of my fundability™ processing system, I wrote every stitch of it myself.

The limiting factor was, “I’m not a damn programmer.” Everything that I was doing was more difficult. We brought in somebody to take that burden off of me. All of a sudden, I have less psychic drag and we have a pro who’s using best practices to take us to a whole new level. Be on the lookout on 2021 because it’s coming and it’s going to blow your mind, ability, and speed to get through all of the milestones and steps to get you to those funding approvals. Ten ways that you can overcome those limiting factors. We want to know different things that we can work around, work under, or work over.

Step number three is to take those ten solutions and notate them. For me, it’s low hanging fruit. All I had to do was talk to the people who were my coaches because there were some programming things that I needed help on then they would teach me something. I would capture the lesson and store it so I could do it myself later on. They already knew the database and our system so it was easy. Low hanging fruit to give that to them and say, “You do it.” Does it cost more? Yes. Will it happen faster and more professionally? Yes. The faster it is, the better it’s going to be for my clients, which means that the results come faster and people are like, “You’ve got to do this,” and business grows. It’s easy math to get to that point. That’s what I mean by low hanging fruit.

What small things or easy things can you do to get rid of those limiting factors? Number four is review those ten to see if there are any home runs. A home run is where you do it once and that goes forever and ever. When we converted from my team doing the milestone steps to doing it as a group and me leading the group coaching, we have had such amazing results and the clients are happier and getting it done faster so that we could do it together. There’s a camaraderie. That was a home run. Changing one thing has created benefit after benefit.

Number five, it’s a combination of these two. What is your sweet spot? A sweet spot is simply a low-hanging fruit that’s also a home run. We’ve had several of them. What was easy to do but also had huge results? That’s your sweet spot. You’re looking at those ten ways in step number two, and you’re looking at them for low hanging fruit, home run, or both. Once you’ve got those ideas then you’re able to decide, step number six, clarify the business you’re trying to build. What do I want to do this year? Am I flipping three a quarter instead of one? Am I doing a batch of a dozen notes instead of 2 or 3? Am I buying one franchise this year? Am I buying four franchises this year? What business is the end game?

To quote Stephen Covey, “Begin with the end in mind.” Begin this year, November, December, with the end of next year in mind. What is the next December 31st result do you want? You’re looking at what business do you want to build. We call it the eTeam, the executive team. We’re getting together three times before we even finish our plans for the new year. These are full 1 to 2-day planning sessions of where we’re going. What have we learned going through this exact process and what’s next? How do we want to shift?

How do we want to pivot? How did we do in COVID? Now that it will probably last a little bit longer, what do we need to do? In order to continue, either pivot again, continue a 360, or go all the way around. Number six, clarify the business that you’re trying to build. Revisit your vision for the business. Did you hit your million dollars in revenue? Now you want to do $5 million in revenue. Your vision is what the world looks like when you’re done with it. There are one million fundable borrowers before I came into this space. They call it a million borrowers’ march.

AYF/GF 112 | Healthy Business
Healthy Business: The sweet spot is simply a low-hanging fruit that is also a home run.

 

Also, revisit your mission. Does your focus expand? Does it narrow? Did you find that one market was yielding? It’s like a gold mine in one market. Let’s say you’re from California but you found there’s a gold mine flipping or buying and holding in Denver, Kansas or in Texas, all of a sudden, nothing but Texas. I have a million borrowers in Texas. You want to expand or contract your target. You want to know what the result is on December 31st next year, but you want to have the plan in place by December 31st this year. It’s step-by-step.

What are our values? Our values change based on who we’re addressing, our types, the markets we’re in, etc. Once you have the scope of the business, then work backward from there. What am I going to do in the 4th, 3rd, 2nd, 1st quarter? What am I going to do in March, February, and January? If you’re not sure how to best reach these sub-goals, the quarterlies, one of the exercises that Brad introduced to me, he’s my in-house mentor, what you want to do is create a list of all the things you can do. Brainstorm a long list of at least ten or if you have 25. What are the things that can be done to hit that December 31st next year end game? Once you have that long list of ideas, at least ten, then pick the ones that make the most sense for the first quarter.

You don’t even have to plan for the second quarter unless it’s a wide scope like address the mortgage broker market. That’s all because your quarterly planning is going to take care of that. What is the big picture? That’s what your end goal is about. You identify and assign a task to the person who owns it. There may be multiple people using it, doing something, or contributing to those goals. What are they doing? Who’s responsible for it? Who’s accountable that it gets done even if there are other participants? What’s the standard? What does success look like for each one of those tasks? The most powerful one of them all is to leverage the power of three.

Find ten runs, sweet spots, low-hanging fruit, or brainstorm at least ten ideas, and the idea is each quarter and each month to choose the highest yield top three strategies and only work on those three. You’ve always got the 2nd, 3rd, and 4th quarter. Implement the highest yield of those top three strategies. Getting ready for a new year is a big deal. I want you to take it seriously because I’ve learned by hard experience. There were years ago where I didn’t have goals. We paid the bills every month and paid for my lifestyle. It was my own personal piggy bank instead of treating it like a business. I commend this information to you, be sure to go to GetFundableBusinessChecklist.com, and put your information in so we know where to send it. We will give you a checklist that is going to go through all of this. I’m ready to start planning the end of my year. I feel complete. It has been a pleasure sharing what is working for me with you.

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