Title: Get Your Business Ready For 2023 – A Conversation with Katlyn Ferguson
Guest: Katlyn Ferguson
Peter: What are two or three things that you would concentrate on or what are you advising clients to consider as they look at 2023?
Katlyn: Yeah. Well, you know, we usually when we meet with clients around this time of the year and we’re kinda trying to feel them out for the following year, we’re kind of ask you know, we’re trying to figure out, first of all, what are their goals? And most people, like you said, are looking for growth. They want not just growth in their top line or, you know, their gross revenue, but whatever’s hitting their bottom line. They’re they’re not just looking to grow and make more money, but to keep more of that money in the business.
And so, you know, we we like to start there.
Peter: Welcome to the Biz and Life Done Well podcast, where we explore what it means and what it takes to do business and life well. I’m your host, Peter Wilson. If you’re like me, you’re intrigued by stories of common people who have achieved uncommon success in business and life. Join me as I interview fascinating people about how they got started, their successes and failures, their habits and routines, and what inspires them. Today, we are talking with Caitlin Ferguson.
She is the president and founder of Citizen Virtual Business Services. Our topic today is get your business ready for 2023.
Katlyn: It’s a great to be discussing right now.
Peter: I was thinking it would be really good to have a conversation with you as a professional who is working directly with business owners. I’m really curious, what are you seeing? What are you hearing?
Katlyn: We have a lot of clients that we talk to that, you know, they are concerned. There are some, some areas in which they’re, they are concerned about they’re being realistic, but overall optimism is high. You know, I would say people are concerned about costs. People tend to be concerned about bringing in new clients, depending on what kind of industry they’re in, whether they’re doing any sort of like monthly recurring type of, industries. I think both you and I are in that type of category, but there are some clients who are in kind of the one time service fee or construction or something like that where, you know, it’s it’s a little bit more difficult stay.
Peter: Kind of a one and done Yeah.
Katlyn: So, you know, those types of people are constantly needing to bring in new work, new business, growth, things like that. So I think mostly what we’re hearing a lot is that there is a lot of optimism moving into the new year. However, being realistic, it seems like some people do have concerns concerning growth and then, you know, their costs, especially as, you know, we’re ex experiencing some inflation at the moment.
Peter: What are you seeing businesses do right now? Are you seeing them hiring? Are you seeing them laying off? What are you seeing any particular trend? Or
Katlyn: That’s a pretty interesting question because, again, it can be pretty industry specific. Mhmm. But typically, we see kind of big movements across the board. Right? So what what we’re definitely seeing is that a lot of people are hiring.
But what I what I’d say is what I’m seeing is people are a little bit more quick to make a decision to pivot and to, move in a different direction if something isn’t going the right way or they they sense that things aren’t going the way they’d like it to go. Whereas before we’d see people kind of contemplating for some time what direction they wanted to take things in. People are making a lot more of a fast decision about how they’re going to move forward. And I don’t know if that’s because of inflation because people are, you know, trying to cut costs quickly or whether that’s, because the job market is a little bit difficult at the moment. As far as getting qualified employees into the business, your business owners are having to move pretty fast if they get somebody who’s, who’s showing promise.
So where maybe they, before they would have taken a little bit more time to, that hiring process, seems like that’s going pretty quick right now.
Peter: One thing that I’ve seen is the knee jerk reaction with, you know, the words recession is, and this happened early on during COVID as well, is we had a lot of folks panic.
Katlyn: Yes.
Peter: And the first thing they wanted to do is turn off all their marketing.
Katlyn: Right.
Peter: I had several conversations with business owners, ultimately none of them turned off their marketing.
Katlyn: And
Peter: I’m pretty sure they would thank me now.
Katlyn: Right.
Peter: Because they managed to pick up market share, they managed to continue to grow at a reasonable pace. Had they turned off everything, sure they would have saved couple thousand bucks a month, but that doesn’t even, that pales in comparison to the amount of new business that they picked up by continuing to market. If you have efficient marketing, if you have inefficient marketing, then yeah, then you should find different marketing. But if you have an efficient marketing play, which is really the only thing that we provide, and I’m not saying that even in a self serving way, I’m just saying this is exactly what we saw. So I’ve had a few folks indicate they want to cut back their marketing and I just say, do you really wanna do that right now?
A lot of companies will do that. Right. And that’s the perfect time to to double down or at least to continue on the path you’re on, especially if you know it’s already working.
Katlyn: Yeah. And what that makes me think of too is, you know, in certain industries there’s what I like to call kind of a cycle with medical, dental. When you’re dealing with insurance, there’s kind of an insurance cycle. You provide services now, but you might not paid for it for four weeks, six weeks, eight weeks, twelve weeks, you know, because there’s there’s a cycle there.
Peter: Yep.
Katlyn: And I wonder in your industry, you know, if somebody were to turn off their services, their marketing services, and then they wanted to restart up again, what would that lag time be
Peter: for That’s a good point. I had not even thought about that, but we were speaking with a customer the other day and they said that their average turn, it’s in home services, construction side of things. And they said their average, from the time the person initially visits them or raises their hand or gets a quote till the time they actually sign is probably six months.
Katlyn: Right.
Peter: So if you’re not continuing to feed the funnel, you may not feel the impact immediately, but you will feel the impact in six months.
Katlyn: Right. And then when you take, you know, of course, the bookkeeper in me is thinking what what’s the investment and then what’s the return? Right? So if you you’re investing now, say a thousand dollars a month in your marketing and six months from now that thousand dollars has turned into, I don’t know what’s a good number, but say 30,000.
Peter: Yeah.
Katlyn: What’s your return? You know, that’s so, yes, that instant gratification is not the word, but that instant relief of cash flow Yeah. Doesn’t really translate into instant relief of cash flow down the line because now you’ve missed out on potential opportunities six months later.
Peter: Right. Well, the other thing that we’ve seen is businesses that are running their marketing, like they’re driving a race car, they’re like flat out when there’s a straightaway and then they lock up the brakes when there’s a turn. Yeah. And so that constant up and down, up and down, up and down, up and down leads to inefficiency and they’re not consistently in the market. Some people may think, are these guys still in the business?
For example, we run something called remarketing ads or retargeting. So if you visit a website, then we’re going to use Google’s tools to show ads across the web for that business. Everybody’s seen it before. If you’re not taking it, let’s say you just turn that off, then you’ve got all these people who visited your website. 90% of the people who visit your website the first time aren’t going to do anything.
Katlyn: Right.
Peter: So only 10% are. So what are you doing over time to continue to market to those folks? And if you just turn everything off, you just disappeared. And if they visited two or three other competitors websites, looking for a product, those are the ones that are going to win. A lot of what we talked about is revenue.
And so if you’re thinking about 2023, the original topic here is get your business ready for 2023. What are two or three things that you would concentrate on? Or what are you advising clients to consider as they look at 2023?
Katlyn: Yeah, well, you know, we usually when we meet with clients around this time of the year and we’re kinda trying to feel them out for the following year, we’re kind of ask you know, we’re trying to figure out, first of all, what are their goals? And most people, like you said, are looking for growth. They want not just growth in their top line or, you know, their gross revenue, but whatever is hitting their bottom line. They’re they’re not just looking to grow and make more money, but to keep more of that money in the business. And so, you know, we we like to start there.
What are your what’s, what are your goals for the upcoming year? What do you think based on how you’re performing now? You know, sometimes, like I said, it’s, it depends on the industry, you know, medical, dental, those, those industries are a little bit harder to, in some ways and to forecast, because like I said, they’re kind of on an insurance cycle. And typically when you’re dealing with insurance, you’re also thinking about, you know, your end of the year is usually a little bit busier than the mid year or spring or whatever, because people are wanting to use up their insurance before the turnover. But, you know, considering what people’s goals are, one of the things that we always, you know, try and do with our clients is kind of a year by year comparison.
So what we just did with all of our clients was we looked at what their total gross income was for 2021 and then what their year to date as of, I think it was the October 31. We did their year to date gross revenue for current year. Yeah. And then what they’re projected to do by the end and just kind of talking, using that as a talking point. You know, do you think that this is unusual for you or do you think this is pretty consistent or the growth that you’ve experienced this year?
Is it consistent with what you’ve already experienced? What do you have on the horizon? You know, or if it’s construction, we’re usually wanting to ask how far are you booked out? You know, are you booked out a few, few weeks, few months? Are you booked out to summer?
Peter: The book out piece is very common with almost all of our clients. Whether they actually have work booked out or they have sales prospecting appointments booked out or they have one of our clients is pet related and they look at appointments, how far out they’re booked.
Katlyn: Yeah. And some of the areas that, you know, don’t necessarily pertain to, say, bookkeeping or marketing or any of those things, but what’s your retention rate? There are certain types of metrics that most business owners should if they’re not doing it now, they should be developing some sort of KPI system where they’re measuring, you know, what’s their retention rate. And as far as like, what’s their conversion between the time they get on the sales call to the time they, you know, sign them as a client or bring them on or whatever. For every sales call, are they getting one out of 10?
Are they getting five out of 10? Are they getting eight out of 10? Like that’s information.
Peter: Yeah. Conversion rate. Yeah. So you’ve got conversion rate and you’ve got con and then you’ve got conversion time. So you really have two variables there.
Katlyn: Yeah. And then again, just retention, how much of their current clients stay with them and now for how long. And so, you know, we just tend to want to, our recommendations are just really to take a holistic look at the function of their business from multiple different angles. I think definitely from the bookkeeping side, there’s a lot of data that the numbers can give us.
Peter: Yep.
Katlyn: And, you know, looking at it from, you know, your side of things, I’m sure there’s tons of areas in which, you know, you recommend for clients kind of closing in on a year and looking forward to a new year.
Peter: Yeah. All of our customers want new customers and new customer leads. We look at things like we want to look at historical cost per lead trends. Obviously, that’s probably the number one KPI we’re going to analyze for a lot of our marketing customers. That’s very low hanging fruit.
Then we want to then we also want to look at how well they’re maintaining those relationships, you know, how long those customers are lasting. Are they rebooking services with those customers? One area that we also want to look at is if a customer goes dormant, and it is a service that’s ongoing, do they have programs in place to reactivate customers? But so with respect to numbers, I think the biggest thing we look at is top line revenue growth, because we want to make sure that the marketing is actually translating into real growth for the business.
Katlyn: Right, right.
Peter: I want to see if they’re getting positive reviews. What are the ratings? All of that can impact their business performance. If you, I mean, as sad as it is, if you have a bunch of bad reviews on Google, that could impact your business results in the future. So those are the kinds of things that we wanna look at going into the new year.
Katlyn: Yeah. I think too, you know, on the on the bookkeeping side of things, of course, you know, it’s a good time of the year to be not just looking at what your gross I mean, from our side of things. Right?
Peter: Yeah.
Katlyn: The gross revenue is great, but does that translate into, you know, keeping money in the business?
Peter: Exactly. Profit. Yeah.
Katlyn: And and so, you know, there’s there’s also, you know, certain types of services that businesses routinely take advantage of. There’s insurance, there’s, you know, marketing, there’s rent, there’s vehicle expenses. There’s all sorts of expenses depending on the type of industry the client is in. But it’s a good opportunity to look at some of those expenses that a client has incurred over the year and saying, you know, here back in January, your, your insurance was X amount of dollars, but you know, when you renewed your insurance bill in July, say your insurance went up to X a different amount or whatever.
Peter: Yeah.
Katlyn: So just kind of doing a cost analysis. One of the things we like to do is like a vendor report and just seeing kind of who are the common vendors that a client is working with throughout the year. There are certain types of industries in which those costs just kinda slowly increase over a period of time. Right. And that might be completely valid, you know, there but we we need to ask the question, you know, if if the insurance jumped from one month to the to the next or say, like, their merchant service fees.
If those were, you know, x amount of dollars kind of routinely and then suddenly they’ve jumped one month, those are question question marks that we have to speak with the clients about. And there might be a legitimate reason for that, but it’s always good to just kind of look
Peter: I I completely agree. In fact, you’ve done that with us, and we have a lot of cloud services that we subscribe to, which is behind employee expense, payroll and all that. Probably our biggest expense. It’s really helpful when you’ve done that report, and you identified two or three areas this year that I can recall where we had seen an increase. One was our fee credit card fees, for example.
And so I was able to drill into that a little further and discovered that there was a change made that I wouldn’t have even noticed. It’s not necessarily thousands of dollars a month, but when it’s $500 a month, you know, over the course of the year, that’s $6,000 and that really is significant for any business. I don’t, you know, that that’s, that that’s real money. Another area you and I are talking about, which was like systems.
Katlyn: Yeah. Because, you know, what we’ve talked about before is basically when you have great systems in place, what that’s doing for you is essentially kind of what you’re saying. It’s it’s it’s basically kind of creating an employee almost for you. If you’ve got great systems, in place, it can act as like almost an employee. You have to monitor it and you have to make it flow, but you should have great systems in place.
And then the goal with that also is to save you time. And for a business owner, time is almost more valuable than anything. I think both of us can attest to the fact that as business owners, we spend a lot of time in our businesses, thinking about our businesses and worrying about our businesses. And if we’re concerned about missing a step in a workflow or in a process, that’s time wasted. What is the saying?
Money is time or time is money. So having the money is time. Time
Peter: is money.
Katlyn: You know, just even saving a little bit of time over here translates to saving money over there. But also, you know, that the same is true for hiring, you know, a marketing firm to help you with certain aspects of your marketing or hiring a bookkeeping firm to help you with the back end books. Any business owner could technically probably do their own marketing, could technically do their own bookkeeping. Now whether that’s effective or not, that’s not part of this discussion. But in terms of time alone, you know, if, if a general contractor can charge $300 an hour and they’re spending five hours on their bookkeeping every month, what does that translate into loss of potential income for them?
Peter: Right.
Katlyn: Or the same with marketing, you know, it’s like, golly, if if, I know, you know, just looking at various marketing techniques, I end up getting so confused. I’m like, I don’t know what I’m supposed to say to to my ideal client base. I don’t know what my messaging is supposed to be. And that’s why you Right. You end up hiring a professional because I could spend twelve hours working on it and still not get one lead out of out of anything that I do on my own.
Right. You know, but what you guys could do over a smaller period of time saves so much energy and time.
Peter: Well, and the the other thing is is that, you know, we’re applying our expertise across a 100 plus clients. We really have put in processes and procedures and see trends and we just know what we’re doing. So we’ve got, first of all, you said, what are your goals? Let’s review your goals. Second of all, review your expenses.
And then is there a third big rock that we should be thinking about?
Katlyn: Again, tooting our own horn. I think this people should be hiring bookkeepers and hiring, marketing specialists. But even outside of that those those two things are super valuable. When you when you have accurate numbers to work off of, then what you do for the client and saying, okay. Well, here’s your top line.
Here’s your bottom line. If everything on your profit and loss between those two numbers is incorrect, then the information is almost invalid. So, you know, that’s that’s where kind of what I do comes in making sure that the bookkeeping is super tight and just really workable information. But then, you know, we look at various different things too, where it’s like, okay, have you spent any money on marketing this year? If you haven’t, why not?
And then just kind of saying, well, if your goal is this, then why not enter into this arena? Or if it’s, I don’t know, there’s, I mean, a million different things that we can go into in terms of like how these things go hand in hand with each other.
Peter: Sure. Yeah. So I mean, it would I think what you’re saying is invest in things that count. And we know that if you don’t have your marketing being handled in an efficient and effective way, a huge miss for most businesses, if you don’t know the numbers, or you don’t trust the numbers, probably even worse miss for the business. Those are two areas where you really can’t skimp.
Katlyn: Right.
Peter: Most of the businesses that we work with, that my company works with are annual revenue less than $5,000,000 Some are And in that case, they could not afford to pull in house the expertise that we can provide to them as kind of their outsourced marketing, company or their, you know, sort of their outsourced, chief marketing officer.
Katlyn: Right. Right. Yeah. We’re we work with a similar client base in terms of revenue and and where we feel like we can provide value to to a client in that, like, demographic, I suppose. There are certain aspects of the business that are super foundational to the ultimate success.
Two of those big things, and I’m sure there’s other things. However, we’re a little bit biased. That we know our industries and we know what we can provide to a client and we know the value that we bring to the table. If you don’t know your numbers or if the numbers aren’t correct, you can’t make good decisions off of faulty information. And then similarly, you know, if you can’t get your business in front of enough people, you don’t have a business.
Right? So those are two super foundational aspects of not only growing a business, but keeping your business healthy and thriving.
Peter: And getting your business positioned to sell if that’s what you want to do as well. Right. And if somebody comes in to buy your business and you don’t have a distinct plan in place, or you don’t know the numbers, or that you can’t trust the numbers, you know, you could you could spook somebody, their interest could turn to nothing in a heartbeat. You wouldn’t have this taken care of.
Katlyn: Right. I mean, even something as simple as getting a loan. You know, if if if you need to get a loan for your business, you know, there’s so many areas in which, you know, a business could need a loan for. Growth is one of them. Sometimes a business needs to get some sort of a small business loan in order to purchase new equipment that will help them grow their business in a certain area or hire more employees or whatever.
If the numbers aren’t good, there’s no way a bank is ever gonna loan you money off of faulty information. So, I mean, that’s definitely a huge, not just in selling your business, but even in
Peter: Right. Finance. Yeah. Finance. Yeah.
Yeah. Like, if you’re buying equipment, you’re buying vehicles. Yeah. That
Katlyn: I’ve had prospects come to me because they’re like, I wanna get a loan for a new work vehicle, but I can’t. The bank won’t let me. Because even though I have x amount of hundreds of thousands of dollars coming in or multimillions, you know, the numbers just aren’t aren’t entered correctly. And so then it looks like they’re in the hole and it’s like, you know, they know that they’ve got good cash flow, but the the the books are not showing that. So it’s there’s So the teeter totter can go in either direction, but what we want is balance.
Peter: Right. So it sounds like we’ve got four or five overall themes here. First one again is what are your goals? Second one is, review your numbers.
Katlyn: Yep.
Peter: Third one, I would say would be review your marketing. Yep. And the fourth one is, hire a pro if you don’t have a plan in place to really help guide your business in the way that you want it to. The other thing is, is that doing all these things and getting yourself, getting your business ready for 2023 will allow you to have peace of mind.
Katlyn: I couldn’t agree more, you know, especially with there being so many different voices coming in from so many different avenues and channels. You know, when you work with somebody that you know, and that you’ve spent some time with and that they’ve proven that they’re working in your best interests, the way that you and I operate our businesses pertaining to our clients, that’s how we work. We know our clients. We care about them. We have a relationship with them.
Then you, you kind of move into this advisor role. You’re a trusted person in this person’s realm of business. And so then being able to have these conversations with people and not have it be all these different voices coming at them from a million different places, but they just have a couple that they really trust putting the picture together for them. I mean, that’s so I found that to be so valuable in my own business, working with service providers and people who help me. So I know that that also helps our clients as well.
Peter: Caitlin, I’ve really enjoyed the conversation that we’ve had today.
Katlyn: Have I talked your ear off or what?
Peter: So folks may want to get ahold of you. We’ll have links to your business in the in what is the web address that what they you’d want them to go to?
Katlyn: Yeah, our website is citizenvirtual.com and, our email, you can reach me directly Katelyn, KATLYN@citizenvirtual.com.
Peter: Thanks again. I can’t wait to have another conversation with you. Remember, get your business ready for 2023 now and here are a few things to think about as you do that. Thanks, Caitlin.
Katlyn: Thanks, Peter.
Peter: Thanks for listening to this episode of Biz and Life Done Well with Peter Wilson. You can subscribe to us on iTunes, Google Podcasts, Spotify, and most of the other popular podcast platforms. Please tell your friends about us and leave us a review so even more people will find out about us. Thanks again. We’ll see you soon.
