2014 was the most challenging year for me ever since I’ve started doing business online. Here’s how I turned things around in less than 6 months.
1 Tackle Your Personal Problems And Start Tracking Everything
We all have our share of problems. Personal problems can greatly affect your business and will prevent you from making progress.
Most often they are unique, but you are not alone out there. If you can’t cope with it alone, seek help from friends and family.
As long as you keep tackling your problems, whatever it is, you will make progress. Track your progress in a “changelog”. I started several changelogs not only for my websites, but also for my personal life, my health, my portfolios, etc. Changelogs allow you to quickly see what has happened during the last days, weeks, months and how far you’ve come and how many obstacles you have overcome. This can also be quite a confidence booster, if you see your own progress you no longer have to compare yourself to others (something we naturally do but should be avoided at all costs).
Changelogs should be simplified one liners, not too much. Some entries may require a few lines but always keep it short and sweet:
- April 20 – Business Changelog: Automated Task XYZ, Fixed issues: 1,2,3, …
- April 20 – Server Changelog: Updated Variable XYZ, Modified *.conf, Optimized Cache Efficiency 30%
- April 20 – Health Changelog …
- April 20 – Stock Changelog …
- April 20 – Traffic Changelog …
- April 20 – Customer Changelog …
- April 20 – Goals 2015 Changelog …
Eventually, I intend to create a sophisticated app for this that fetches data automatically and allows me to add notes, but in the meantime I just use TreeNotes and other programs for this.
Developing a business is not a race, slow and steady is better than fast and chaotic. Too many startup owners think they have to accomplish everything in their first year only to crash and burn. They can learn a lot from lifestylepreneurs who are in it for the long haul and don’t think in terms of 1 to 5 years (to exit) but in terms of 1 to 10 years or even 20. If you are in it for the long haul, you quickly realize that it simply takes time to build something up, find the right approach and overcome your own unique hurdles.
2 Organize Everything In Your Life So You Can Focus On The Tasks At Hand
Secondly, it’s crucial to organize every little detail in your life, any major activity. Yes, it’s quite a significant hurdle. You will have so many different areas in your life all influencing each other. The problem is obvious: The less organized you are, the higher the chances that some unsolved problem will linger on your mind. You will be unable to give the task at hand your full attention.
3 Develop A System And Automate Tedious Tasks
It’s important not just to develop a strategy, but a system. A system that will guide you and help you to anticipate problems in advance. Many of the problems you will encounter during your entrepreneurial journey can be avoided if you act pro-actively and revise your strategies every week. Let me be more specific here.
- Tackle The Most Important Issues And Create A Blueprint For Yourself And Your Co-Workers
- Find a way to get reports for your most important metrics
- Create Apps That Will Automate Tedious Tasks
- Use Tools To Further Automate Your Business, Learn Autohotkey on Windows
- Use IFTTT.com, HootSuite, etc.
- Learn Time Management!
- Focus on habits that make you money
I am still new to time management, something I hope to look into more this year and obviously it can be quite technical to automate your business, so you may need help if it involves more programming than you can handle yourself.
I make extensive use of AutoHotkey for my entire business. It’s the one tool I couldn’t live without. I also rely a bit on IFTTT, but I don’t like relying on services that can be shutdown any day.
I believe investing time and money into productivity tools can pay off handsomely and it will help you on your way to create a system. I plan to develop some full-blown applications for this entire process which will bundle reports from Analytics, Web Logs and other relevant reports and hope to distribute it through this site in 2016 while I work on perfecting my own “blueprints”.
4 Focus On Cutting Costs First
The last few months, I have been spending enormous amounts of time on cutting costs. Not only is my business a lot leaner, but also my personal life. We tend to overspend money on luxury goods when we reach a certain income level. That’s really bad behaviour if you want to build a bigger business. You need to build up cash reserves to grow and for unexpected expenses.
I’ve also learnt that sometimes spending money can help to cut costs. For example, if you currently spend amount X on digital products every month you should try to find a marketplace with a subscription-based model instead that offers similar value.
Example: If you currently buy products for clients on codecanyon.net for WordPress, it may be cheaper to get a subscription for https://premium.wpmudev.org/ which allows you to use all products on a client site.
Flatrates and subscriptions in general can help you save money if you know you are spending a certain amount anyway.
In your personal life, if you tend to spend a lot on digital platforms such as iTunes it may be cheaper to get yourself a monthly HBO subscription (HBO Now is only 15 bucks). However, this approach only works if you can actually stick to one platform and avoid using the other.
There are many other tactics to cut costs that can pay off. Research a few that may apply to your spending habits.
5 Avoid Hedonic Adaption
When you are done comparing prices and subscriptions, you absolutely need to focus on increasing your profit margin. You can cut costs only to a certain point. Some argue cutting costs is a waste of time and you should always try to increase your revenues first. I disagree. If you don’t cut costs first you will simply adapt your lifestyle to the higher profits. This is known as hedonic adaption. And of all things, I never thought that it would happen to me.
I’ve been an avid saver my entire life and I never spent much money on anything really, but after reviewing my yearly expenses in 2014 more closely I had to admit that I had been spending more than I could afford.
Overspending happens, but if you want to improve your financial situation you absolutely have to tackle these issues.
6 Then Focus On Increasing Revenue
Increasing revenues of an existing business is easier than you might think. The trick is to focus on habits that make money. The problem is most solo-entrepreneurs fly blind really and many small businesses too. They don’t track anything.
Tracking is crucial.
You need to set up event tracking and entire sales funnel tracking to better evaluate your business. What if you change your layout in this way or that. Does this yellow button perform better than the green one? Is my server too slow and increases my cart abandonment rate?
Also, you absolutely need to know how much the different sub-niches of your business are bringing in. Every business has different products, but which one is actually making the most money? If you can’t answer this one from the top of your head you have already identified a crucial business mistake.
Websites: For websites this can be the different topics you write about. If you notice that a certain topic is performing much better than the others, why don’t you spend 80% of your time writing about the topic that actually makes money rather than spending time on articles that perform poorly? Yes, yes, those others bring you traffic and links, but why don’t you outsource it then?
eCommerce: For eCommerce shops, the approach is similar. Why do you list products that perform poorly in the first place? Improve the listings of your top-sellers and expand the product line for that specific niche.
Services: Businesses that provide a service, e.g. website maintenance and security audits for example should focus on the one thing that brings in the most money and consider dropping the other one completely. Focus is key.
7 Keep Working On Your Strategic Approach And Your Endgame
Always be mindful of the big picture. Your investment strategy or business strategy may be flawed. If you notice something is crumbling you need to react. You not only need to react, you need to react pro-actively.
Let’s say you invest amount X into commodities. Suddenly you notice a change in market perception, demand or supply, but the market hasn’t realized it yet. What do you do, do you wait to see if the market reacts or do you sell before others catch on? Markets change constantly. A stock can triple in value because the market suddenly has more data that allows it to better evaluate the company. The same can happen to YOUR business over night.
Keep following market trends and perception. I spend a lot of time just tracking developments and reading. More information allows me to draw a clearer picture of the future and allows me to position my business pro-actively before the market makes a move. That’s when prices skyrocket and you’re already in the boat not waiting on the sidelines.
I applied most of the strategies outlined above early on, but you need to expand your knowledge and dig even deeper over the years. Admitting that you don’t know everything and that you can still learn a thing or two is important. This has really helped me to turn my businesses and finances around. Together with a focused, systematic approach you can easily turn your business around in months or at least make steps towards higher revenues and lower expenses. Spending less than you earn sounds easy, but even the best savers get tempted by our hedonistic society that keeps throwing annoying ads at us. Possession is meaningless and that catchy new car will get old real quick. Do yourself a favor and start investing in yourself.
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