4 Steps to Massive Expansion

Colours of Wealth

By Whitney Hammond, CFP, CLU

When I think of wealth, I can relate it to coral larvae naturally expanding into a beautiful reef. Imagine, just imagine expanding your wealth, taking your business to the next level, and stepping into your own power to do this.

Can we all do this? Yes, absolutely what we think about, we bring about. As a wealth strategist for the past thirty-five years, there are behaviors, techniques, and levers to pull to get you to the next level.

In this series on building wealth, all the ingredients and processes have been described in The United Colours of Design 2021 series. Here is a recap on the previous three issues:

• How to build a positive cash flow

• Becoming profitable

• Make the money, keep the money

Our final chapter is expansion.

The natural flow in business is to build it bigger. We are in business to serve; we are in business to make a profit; and we are in business for growth and to build a family empire.

If the principle is the same to make 100 widgets as it is to make 200 widgets, then why isn’t everyone expanding and building beautiful wealth? Why does the average entrepreneur make $50,000 per year vs. $500,000 or $5,000,000? Lack of leverage is the answer. There are several levers to pull to increase revenue. Let’s look at four...

Mindset

Visualizing the outcome of what your business looks like.

If you can’t see it, you can’t do it. Here are two different examples.

1. In 2022, I would like to help and onboard 100 new clients into my process of “money inflow,” stress-free, wealth-building management; add to my existing 3,000 clients; and increase my revenue by 15 percent to _____ with overheads at 28 percent.

2. I would like to have clients who buy again vs. the one time. In 2022 I will service 100 annual clients and onboard fifty new clients. My service sees far beyond the one sale and fills ongoing gaps for clients. I intuitively know what they need.

80 percent of your business will come from 20 percent of your clients. FOCUS on a goal that allows for repeat revenue—something that is needed annually to refill what they have purchased from you. This way we are not looking down the same black hole every January searching for sales and new customers.

When there is a flow of incoming money each month, it will naturally flow even more.

This is a CLEAR MESSAGE and mandate for 2022. It tells us we are looking for:

• renewal income each year from the existing client base

• limitless possibilities

• money inflow

• constant flow of sales

• gross sales

• profit goal of 72 percent (This is a non-tangible product; a tangible product will decrease this percentage.) Decide on your profit margin!

Love your service or product entirely, knowing that people will suffer without your package!

I truly operate from this space. People cannot build wealth and avoid the tax pitfalls without the guidance of a wealth strategist. Every person in this space needs to turn for help, no matter what lever. I never have to sell myself— they come.

Growth Margins

Winning Ratios

Let’s review our ratios, 40-35-25, as shown in the Copper issue.

We sell a service or item...

40% Owner Revenue 35% Overhead (Cost to do business) 25% Retained Earnings

When this model is followed, we are now ready to expand. We have the magic formula and find that the more we sell, the 35 percent overhead reduces which increases our retained earnings. And when we increase our retained earnings, we build wealth and enter into the mode of expansion.

This is the best state to work from. This is when the wheels on the bus are oiled, and it picks up momentum.

We can invite clients to see us. We are no longer in that “struggle mode” that emits fear and negativity. We are now coming from a place of flow and passion. Here is where the sensuality lies in coral. It flows; it grows. Business flourishes in the same way when healthy and vibrant.

We are NOT healthy and vibrant when our finances are messy and unclear. Our message, our mindset, our profit margin, our outlook for growth MUST BE CLEAR. If we don’t know where we are going, then clients will not follow us.

Systems

This is the biggest lever to pull. Designing and creating the system(s) that will allow you to roll out your services more swiftly and accurately with efficiency. This is where the pedal hits the metal. Grab a whiteboard and start listing the ways you want to build out your systems. Here are some ideas to get you started (pros and cons included).

1. Hire a part-time helper

More time and increased sales however, there could be more work and quality control issues.

2. Bring in a partner

You can build twice as big and your partner buys in with cash however there can be partnership and control issues.

3. Outsource

You gain time and Increased sales but you need to keep track of cost vs. profit.

4. Advertising

Your visionary storytelling message is carried further, make sure you are aware of the time-frame to apply this strategy and you keep track of cost vs profit.

5. Center of Influence

Use other professionals' networks to carry your message for you (referral programs) but make sure your communications and messages are clear.

6. Networking

Building relationships with like-minded professionals is huge, but it is time consuming.

7. Hire more as you grow

More minds create better ideas that can build a well oiled machine, however staffing issues can be costly and time consuming.

8. Engage a mentor

A mentor can take you to the next level in your business, just make sure they are in the same field (initially) of business to get the most benefit.

9. Hire a specialized coach

Move from stuck to flourishing but do your homework, know who you are hiring, there are a lot of choices out there.

10 Social media

A flowing campaign can be a great lead generator however this can be overwhelming so you may want to outsource. Again, lots of choices, so do some investigating. You can always hire a millennial to help.

Build it and they will come

How can I get bigger and faster to bring in more revenue and lower my overhead? Is this possible? Yes!! There is a cost to leverage, but with increased revenues, the overheads (costs of goods) go down and profits go up. Leverage means to gain an advantage through the use of a tool or the use of debt (borrowed capital) in order to undertake an investment or project.

• What levers do I have to pull to make the results happen?

• What funds are needed to reach the outcome?

• Who is needed on the team to make it all happen?

The most common question is when do I hire? Having a team will, of course, increase production and free up time to build on other money-making opportunities. When do I expand and rent space? Another tricky question. If I had more funds, could I reduce inventory buying costs? Could that money be used as leverage to hire an assistant?

Use a ratio model—40-35-25 (as reviewed in the Black issue). Here is where the magic lies; this formula always self-checks profitability. Start with a part-time helper and work it up. Leverage will not resolve all problems. Remember, every problem that is solved in business creates another. With a new hire, orders will increase, quality control will now be needed, and so on. This is business.

As entrepreneurs and artists, we started our businesses to share our passion, share our knowledge, and share our ideas. Allowing ourselves to grow and flourish allows many, many more people to share our fruits in life. As mentioned in our first column in the Black issue, “money is not the root of all evil.” Money is simply a tool for us to trade for better ideas, for better experiences, and for better growth all- around. Expansion is the natural growth, the natural evolution of where a business will go should we choose to:

• focus on it

• grow by margin

• build sustainable systems

• leverage resources

And look at you grow!!!