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Vision Beyond the Box

11 min read

In our last blog we discussed goals to tackle as businesses as we move closer to 2024. Now is the time before the new year to put structures in place to help better achieve your new vision for your business.

In order to start this process we first need to define our goals. Our previously indicated goals are:

1. Improve profitability.

2. Renew Joy and happiness back into work.

3. Create (or recreate) a new vision for the future.

Improving profitability will come through the other tasks we will work on later. Renewing joy and happiness back into work will be laced throughout a number of the monthly installments. So let us look at number three first.

Take some time to think about your business. Brush away all the problems, crises, and issues that keep you awake at night. We know that isn’t easy, but try to envision the way you want your business to be

Envision everything you want in your business. Try to envision as much detail as possible. This may take several tries and may require a quite place. Don’t let the current status of your business restrict your envision, dream big. Think about how it looks, feels, moves, the when and the why. Place yourself in that vision.

Visualizing goals is extremely important in achieving them. Most experts agree that to achieve a goal you must visualize it, visualize it in detail, and visualize yourself achieving it.

Here’s where you should start:

  • Write down everything you envisioned with as much detail as possible.
  • Take those details and make a list of them all.
  • Organize that list into two different categories; Needs and Wants.
  • Then prioritize them.
  • Look at your list of Needs. Think about, and write down, how you could, or what would it take, to incorporate them into your business in 2024.
    • Break them down into smaller tasks. You want your place of business to look different or better, then list all the tasks it would take to do that, like paint the walls, new window dressings, or fix that door, etc.
    • Rearrange the list, placing at the top the item that is easiest and most likely to be achieved quickly, followed by the next easiest and so on down to the hardest.
  • Repeat the above process for the Wants

Now you have the foundation for a plan of action. Create a chart with all the Needs and Wants, Needs on one side, Wants on the other, with columns for “Date Expected” (to complete) and “Done.” Place your chart where you can see it. Start working on the easiest items first. 

It’s ok to jump from the Needs to the Wants, and back, as long as a Want does not restrict, or get in the way, of a Need. Or if you prefer, you can just work on the Needs first, then the Wants. 

Review your chart regularly. Hopefully you will be checking off the “Done” column on a number of these so reviewing the chart often will not be a problem.

Budgeting & Cash Flow

We all know the old saying “the life blood of business is cash flow.” There is much truth to this. Cash in, cash out. Without cash flow nothing gets done or debt is incurred and a business’ value goes down. Every business has struggled with this throughout the ages. You would think by now someone would have come up with a way to fix this. Well, someone did, but most business owners just refuse to do it. It’s called budgeting.

Do you want to know the secret to building wealth? Wait for it… Never spend more than you earn. We know you are all re-reading that and saying “Really? That’s it?” How un-climatic. How dull. How simple!

It’s so simple it almost makes you mad. So simple most people reject it. But if you think about it, it is true. If you spend less than you earn you will build wealth. 

“Ok, Mr. Smarty Pants, how do we do that?” you ask, with budgeting. We will be up front with you, budgeting is simple in process but hard in application, that is why most people fail at budgeting. However, we know if you stick to the process, through hard times, you will be better off.

What you need to know and do:

As a business owner there are a number of things you should know. We will go over these items and we will show you how to determine them.

  1. What are your daily, weekly, and monthly average sales amounts? How much do you need to sell each day to make a profit?
    1. You could also take this a step further and determine how much you need to sell each hour.
  1. Next, what are your daily, weekly, and monthly average expenses?
    1. What are your fixed overhead costs?  
    2. What are your variable overhead costs?
      1. What causes these variables to go up or down? 
      2. What does it cost you to open your doors each day?
  1. What is your Net Profit, in total and on each item you sell. Will talk more about this in a later issue.

Make a Monthly Budget:

List all expenses by category.  This is the easy part. Be honest with yourself.

  1. List all items including periodic items, if they occur quarterly divide them by three, if they occur annually divide them by twelve.
    1. Know when each periodic item is due and keep this in mind when reviewing.
  2. Evaluate each expense item.
    1. Your two largest expenses should be Cost of Goods Sold (COGS) i.e. inventory, and Payroll. It is important you know and understand this and what makes them go up or down and how to make them go up and down as you need them to. The are 55% to 75% of your expenses.
      1. For most businesses a target percentage for each:
        • COGS should be between 30-40%. If COGS are higher than this then either your prices are too low or your costs are uncontrolled and an adjustment needs to be made.
      2. Payroll should be between 25-35%.
  1. How important is this expense item?
  1. Can this item be reduced or eliminated? Reduce or eliminate what you can. Be honest and frugal.
  1. Once you have your monthly budget worksheet complete:
    1. COGS: Make a standard weekly purchase list of things you always need and sell regularly. The idea is to set a weekly purchase amount.
      1. Don’t deviate from the dollar amount of this list unless there are special circumstances or your sales deviate from their averages. For example: if your average sales are $10,000 a week your standard purchases should replenish what you sold, i.e. $3,500. If at the end of the week your sales were $15,000, higher than your average weekly amount, then your purchases should reflect this (i.e. $5,250) and you should purchase more, but you already have the money so it is ok. 
      2. It is okay to substitute items in and out but keep to the average dollar amount of spending.
      3. If last week’s sales are less than your average then you should reduce your standard weekly purchases to reflect it. Sales down 10% purchases should be reduced 10%.
    2. Payroll: Is a bit trickier, it is more about the people than the process. Knowing who can do what and how well they do it. We are going to skip this portion for now and it will be discussed in a later issue.


This is probably the most difficult area of any budget.

  1. List all debts your business owes. See debt worksheet.
    1. Prioritize debts once you have all debts listed. 
    2. First by smallest to largest, then by highest interest rate to lowest.
  1. Total all your monthly payments amounts and enter that total into your budget. You will pay this amount every month, regardless if any of the debts are paid off or not.
    1. Pay off the smallest debts first if possible. Meaning if you have debts that are less than $1,000, pay them off. Apply the monthly payment amount allocated to those debts to the next smallest debt. For each debt paid off, allocate that payment to the next debt. This is called the Debt Snowball Effect. This will allow you to pay your debt off much faster. Most people get the urge to reduce the monthly debt payment amount thinking they are creating breathing room, WRONG! This is the trap, don’t do it. Don’t reduce the monthly total budgeted debt payment, just reallocate it until all debts are paid. 
    2. What if your debt is so high it puts you under water, at a loss every month? 
      1. Go back to the budget worksheet and re-evaluate each expense again, look for ways to cut costs. This is the hardest part. Sacrifices will need to be made, the greater the debt, the greater the sacrifices.
        • Re-evaluate COGS and Payroll.
        • Unfortunately there tends to be a fair amount of waste in COGS. Not always thrown away kind of waste but also excessive amounts used waste, when a smaller amount will do. What we mean is portions.
    3. Evaluate how and when your sales occur.
      1. Would altering your business hours, days, etc. reduce your costs without seriously, adversely, affecting your sales? Meaning, would changing your opening/closing hours be of any benefit? If you don’t sell enough on Mondays to cover the amount you need to make a profit, then you don’t need to be open on Mondays. If you don’t sell enough on Mondays during lunch hours to make a profit, then you don’t need to be open on Mondays for lunch.
    4. Focus on increasing sales. We will have more on sales in another issue but for now:
      1. Upsell: “Do you want fries with that?”
      2. Focus on your high profit items, put them in the forefront.
      3. Remove, or stop selling, your very low profit items, unless you can pair them with other higher profit items.
      4. Stop selling items you are losing money on.
      5. Raise your prices.
      6. Consider charging additional fees for things not covered or that add extra costs to sales and reduce profit.
    5. Consider selling assets, older, less used equipment, etc. to raise cash.
    6. Ask debtors if there is any way to alter the payment amount to be more accommodating. Don’t ignore them, discuss options with them. 
    7. If none of these ideas work, seek more professional assistance. Call us to discuss.

Things you should never do:

  1. Never, ever, make business decisions based on the balance of your bank account.
  2. Never lose money on a sale of any item. You should always make a profit of some sort, even if it is small.
  3. Never arbitrarily order products on the expectation of sales rather than a replenishment of them, don’t deviate from standard weekly purchase list, unless there is a special circumstance; holidays where you know sales will be up, special orders have been placed, or your planning launching new items.
  4. Never give away something of value without getting something of value back. Now, let us be clear here and say giving of charity is a worthy endeavor and we fully encourage it. We truly believe in this type of giving and when you give in this way you receive way more than you give. I’m not talking about that type of giving.
    1. Sales (reductions in price) are fine as an incentive to bring new customers in but you still should be making a profit. If special discount sales are a regular occurrence you should have a plan on how to upsell add on items. In fact, you should always have a plan on how to upsell. “Do you want fries with that?”
    2. Coupons. Personally we think coupons are useless. They do not generally offer or generate new recurring customers. Most people who use coupons only want to get something for less, and they will move on to the next business that offers it.
    3. Package deals: Package deals are fine, if you are making a profit on them and they are larger than a normal order. Meaning McDonalds changed to meal deals to get people to order three or more items, not just one or two. Your package deal should have that same idea in mind, not just the two normal items people will buy anyway. Example: a large pizza and 20 wings should never be a package deal. A large pizza, 20 wings, and breadsticks, sure. Two large pizzas, 30 wings, and two 2-liter bottles of soda, absolutely. Again, you must make a profit.
    4. Reward programs: This type of discount we fully endorse. Reward the person that comes in every week and buys a Large Pizza and a bucket of wings, not the person that you have never seen before and may never see again. If you don’t have a reward program, create one, there are dozens of ways to do so.

Things to think about:

  1. Set circumstances and limits as to when to close early or send workers home early or to stop selling an item.
  2. Open a separate bank account to keep funds out of your operating account so you don’t spend them and then don’t have it when periodic or large bills come due, such as sales tax.
  3. If you run out of something (a selling item), be prepared to offer an alternative. This way you may not lose out on a sale but even upsell.
  4. Creating a small cash reserve. Start with $500-$1,000.
  5. Training. Focus on quality. We hear a lot of businesses say they sell the “highest quality products”, which is great. However, they don’t focus on quality of employees. Finding and hiring quality employees is not easy, We know this, but with regular and specific training many employees can be brought up to a higher quality. Training should be a continuous and regular aspect of your business. Your employees are 25-35% of your costs, one quarter to one third, why leave that up to chance? Investing in regular, consistent, training will pay off.
  6. Menus: Restaurants, take a long hard look at your menu. More is not necessarily better. More often less is. Big box restaurants spend lots of money putting their menus together. Purposely placing their most profitable items in strategic locations and getting people’s eyes to focus on them, etc. These lessons can be utilized by smaller locations too. Be deliberate. 
  7. Consider adding fees for items or services that are costly or out of the norm. don’t be afraid to teach your customers about why you increased prices or added on a fee for something.

Sales Tax Solutions and Consulting has over 22 years of experience in the sales tax field, and has helped its clients save millions of dollars in audit assessments. In addition, we’ve helped businesses by recovering millions of dollars in over payed taxes.

We regularly conduct sales tax training, seminars and workshops. These workshops focus on specific types of businesses or individuals within an organization, in order to present the most specific, relevant, and useful content possible. We can also put together a custom training class specifically for your company and industry either at your office or our training location.