800-465-4656 [email protected]

2025 Is Just Around the Corner – Budget Time!

Budgets! That word can imply a lot to many people—extra work, restrictions (who wants limits in business?!), confusion (where do I start?), and procrastination (who has time at this time of year?)

With all that in mind, for those of you ready to create a budget for 2025, here are some simple guidelines to get started.


Know Your Fixed Costs

The starting point for all budgets is your fixed costs. Review the general expenses on your Income Statement for the past 12 months.

These expenses recur every month, regardless of sales volume, and include items such as:

  • Rent
  • Insurance
  • Office and management salaries and wages (production wages can be treated as part of your cost of goods sold)
  • Telephone
  • Bank charges
  • Vehicle expenses
  • Marketing (discretionary, depending on goals)

To determine budgeted fixed costs, analyze your expenses over the past 12 months. Either calculate a monthly average or allocate costs by the month they occur (e.g., $3,000 for June insurance).

Take time to review each expense. Ask:

  • Are we getting good value?
  • Can we switch suppliers to save money or gain more value?

Know Your Other Balance Sheet Costs

Include additional costs not on the Income Statement, such as:

  • Capital expenditures for vehicles, equipment, and technology.
  • Principal portions of loan repayments.
  • Dividend distributions to owners.

Know Your Gross Margin

Gross margin percentage is critical for determining your break-even sales.

Formula:

  • Sales – Cost of Goods Sold (COGS) = Gross Profit
  • Gross Profit / Sales = Gross Margin %

Example:

  • Sales: $100
  • COGS: $40
  • Gross Profit: $60
  • Gross Margin % = 60% ($60 / $100)

How Much Profit Do You Want to Earn?

Next, determine your profit target for 2025.

Example:

  • Fixed costs: $120,000
  • Additional costs:
    • Dividends: $60,000
    • Loan repayments: $10,000
    • Capital expenditures: $20,000
    • Retained cushion: $60,000

Total costs = $270,000 ($22,500/month)

With a 60% gross margin, break-even sales = $270,000 / 60% = $450,000.


Prove It! Work Backwards

Sales: $450,000

  • COGS (40%): $180,000
  • Gross Profit (60%): $270,000
  • Fixed Costs: ($120,000)
  • Net Profit: $150,000 (33%)

Subtract other costs:

  • Capital expenditures: ($20,000)
  • Dividends: ($60,000)
  • Loan repayments: ($10,000)
  • Cushion: ($60,000)
  • Net: $0

The Final Number – Break-even Sales

Break-even sales are your “magic number.” Allocate monthly targets based on seasonality or divide evenly across 12 months.

Share this target with your team! Post it in meeting rooms and make sure your sales team knows your goals.


In Summary
  1. Determine fixed costs ($120,000 in this example).
  2. Add loan payments, dividends, capital expenditures, and cushion ($150,000).
  3. Know your Gross Margin % (60%).
  4. Calculate Break-Even Sales ($450,000).

Your break-even sales are your success threshold. Maintain consistent gross margins and control expenses to ensure a healthy business in 2025.

Thanks for reading—here’s to a prosperous 2025!

 

Grow Your Business with Strategic Alliances

Growing your business one customer at a time in the cold marketplace is expensive and slow…

Want to reach more customers and grow your business? Partnering with associations and non-competing businesses is a smart way to do it.

These alliances can expand your reach, boost credibility, and create win-win opportunities.

Here is how to make it happen…

Why Strategic Alliances Work

Alliances let you tap into existing customer bases. For example:

  • Associations: They have large, engaged networks. Partnering gives you direct access to their members.
  • Non-Competing Businesses: They serve the same customers but offer different services. Together, you can provide more value.

Think – a landscaping company teaming up with a property management company to offer bundled services.

Find the Right Partners

Not every business or association is a fit. Focus on those with similar goals and values. Ask yourself:

  • Who already works with my ideal customers?
  • Do their services complement mine?
  • Are they respected in their industry?

For example, a church accounting service could partner with a non-profit software provider. Both serve the same audience but solve different problems.

Create Mutual Benefits

Successful alliances benefit both sides. Your proposal should show what is in it for them.

  • Revenue Sharing: Offer referral fees or profit-sharing for leads.
  • Customer Value: Combine services to create a better solution.
  • Shared Marketing: Split the cost of campaigns to reach more people.

For example, a customs broker partnering with a logistics company for seamless cross-border shipping.

Leverage Associations for Credibility

Associations are gatekeepers. They can boost your credibility fast.

  • Attend their events to network.
  • Sponsor conferences to highlight your expertise.
  • Offer value, like workshops or webinars for their members.

A flower grower might team up with a horticultural association to offer tips on sustainable farming. It is a win-win.

Use Technology to Collaborate

Digital tools make partnerships easy.

  • Shared CRMs: Use systems like HubSpot to manage referrals.
  • Co-Branded Content: Create joint blogs, emails, or social posts.
  • Virtual Events: Host webinars or live Q&As together.

These tools save time and amplify your efforts.

Build Trust and Stay Connected

Strong partnerships need trust.

  • Communicate often. Keep your partner updated.
  • Deliver results. Do what you say you will do.
  • Review and adjust. Check in to ensure the partnership works for both sides.

Happy partners stick around.

Measure Success

Track results to see what is working.

  • How many leads or referrals did the alliance bring in?
  • How much revenue came from the partnership?
  • Are customers responding positively?

Use the data to refine and grow.

Final Thoughts

Strategic alliances are powerful. They open doors, create opportunities, and strengthen your business. Start by identifying the right partners and reaching out.

Thanks for reading…

Tidbits To Help You Grow an Even Better Business

Branding Is Essential

A colleague of mine at LeapZone Strategies has written a good Blog on the power of branding…

Here is the start of her Blog:

“Listen up, in the wild jungle of today’s business world, blending in is the first step to being forgotten. You need a Brand Foundation that’s not just solid, but magnetic. We’re talking about crafting a brand that doesn’t just get noticed – it gets craved. Why? Because in a sea of endless choices and constant noise, the brands that win are the ones that connect on a deeper level. They’re the ones that spark something inside people, something that goes beyond just ‘liking’ a product or service.”

To read the whole Blog please click here.

AI Is Everywhere

AI is getting a lot of attention these days. It seems to be the constant topic in online business feeds.

A lot is hype.

Some is not.

I have used it for help in writing a Landing page. I gave it to my Team for feedback.

There was no feedback. They loved it. Saved me a ton of time.

Some software claiming to use AI are exaggerating a bit.

What I mean by that is this – ALL software is AI.

It is intelligently helping you be more efficient and productive.

Think accounting software versus a calculator.

But it is just software code, doing what you expect.

And, heck, that is pretty cool when you think back to the dark ages…before computers.

Some, however, is mind blowing.

Don’t believe me? Try ChatGPT.

Here is a good Blog from the Freedom app people, sharing a ton of apps you can explore for a 40% gain in productivity (their claim).

To check it out, click here.

BDC Talks About AI

To prove my point that AI conversations are bursting forth everywhere, I checked on my latest BDC Blog…

And, lo and behold, they are talking about AI.

Please click here to check it out.

Thanks for reading…

 

How to Create and Maintain a Culture of Awesome Service for Your Customers and Team

Introduction

Service is what sets great businesses apart. It is the one timeless constant. It was true for a business in 1850. It is a fact now as well.

Customers expect personalized care, and your team thrives in an environment where they feel valued and empowered. For family-owned businesses like yours, building a culture of service is not just a strategy—it is an extension of your core values.

Creating and maintaining this culture takes intentionality.

The rewards are worth it: loyal customers, a happier team, and long-term growth that feels good.

Here is how you can do it…

Number 1 – Define Your Core Values and Live Them Daily

Your service culture starts with your values. Think of these as the guiding principles that shape how you treat both customers and your team. But there is the catch—values cannot just live on a wall poster or in an onboarding manual. They need to be visible in everyday actions.

Example:

A franchised business we worked with defined “transparency” and “teamwork” as core values. To bring these to life, they introduced a weekly team huddle where leaders openly discuss wins, challenges, and customer feedback. This keeps the team motivated to deliver outstanding service.

Key Metric:
  • Companies with clearly defined core values see a 29% increase in employee satisfaction (Source: SHRM).
Number 2 – Empower Your Team with Clear Communication and Tools

Your team are your customers!

When they feel confident and equipped, they will naturally provide excellent service. Start by ensuring everyone understands what great service looks like in your business—and provide the tools they need to deliver it.

Do it with clearly defined Performance Standards. A clearly defined Performance Standard is one based in physical reality. If it is not visible in physical reality it cannot be measured. If it cannot be measured, it cannot be improved or managed.

Example – Answer the phone on the second ring.

This passes the above test. It is clearly observable as either done, or not done. It defines an aspect of Awesome Customer Service. Customers that get responded to quickly on the phone will feel more cared for.

Number 3 – Lead by Example

Your leadership sets the tone. If you treat every customer with care and respect—or step in to help a stressed-out team member—you are modeling the behaviors, you want to see.

Top-down management structures disempower people.

An inverted organizational chart has the business owner on the bottom. Serving the Team above him/her, who in turn serve the customers.

Does that mean the owner-leader has humbled himself into being a doormat?

No!

“Humility is not thinking less of yourself, it is thinking of yourself less.” C.S Lewis

“Humility is thinking more of others. Humble people are so focused on serving others, they do not think of themselves.” (Source Philippians 2:1-4)

Being at the bottom means you are responsible for serving everyone above you.

Being on the “bottom” in service to all does not mean poverty. Just the opposite. Being in service to more brings more rewards.

Number 4 – Build a Culture of Recognition and Growth

People who feel appreciated are more likely to go the extra mile. Regularly celebrate your team’s wins, both big and small, to reinforce the behaviors you want to see.

Ideas for Recognition:
  • Create a “Service Star” award for employees who deliver standout customer experiences.
  • Host a quarterly lunch to celebrate the team’s successes.
  • Share customer compliments in team meetings or a company newsletter.
Example Metric:
  • Teams with frequent recognition programs report 23% lower turnover rates, contributing to stronger, more cohesive teams (Source: Gallup).
Number 5 – Foster a Feedback-Driven Environment

Great service comes from a willingness to listen and adapt. Make it easy for customers and team members to share feedback.

Show them you are listening by acting on it.

Customer Feedback Tips:
  • Use short surveys after service interactions.
  • Ask for testimonials during your monthly Zoom reviews.
Number 6 – Keep Stress in Check

Stress is the silent killer of great service. To maintain a positive, productive team, ensure processes are streamlined and support is readily available.

Stress-Reducing Strategies:
  • Streamline workflows with automation tools like Plooto for payments.
  • Build a financial cushion for tight cash flow periods.
Example Metric:
  • Businesses with proactive cash flow management see 20% fewer disruptions during busy seasons (Source: Small Business Trends).
Conclusion

A formidable service culture is more than a business strategy—it is a way of life that benefits everyone involved. By defining your values, empowering your team, and fostering a positive, feedback-driven environment, you can create a business where customers rave about your service, and your team feels proud to be part of the journey.

Call to Action:

What is one step you can take this week to strengthen your service culture? Whether it is recognizing a team member or asking for customer feedback, start small and build momentum. If you would like more ideas tailored to your business, let us connect during your next monthly Zoom meeting!

Thanks for reading…

Tidbits on Freedom and Focus

There are two fundamental ways to approach your business…

One is the Big Bang Theory. Setting BHAGs. Big Hairy Audacious Goals. Go big or go home.

You get the idea.

The other is the CANI approach to business (and life). Constant and never-ending improvement (CANI).

Small, tiny habits versus big goals.

Tiny, micro habits beat setting big goals every time.

I am a big believer in habits versus goals. Habits create the momentum towards your goals.

By doing little things consistently and improving on those little habits each week tremendous movement towards your goals will occur.

You will also be more relaxed and have more fun on the journey.

To read more about how to get started please read this:

Tiny Habits for Productivity

4 Ways to Grow

Related to the above is making tiny improving in the Four Ways to Grow your business.

In fact, just 1% change in all four areas can create a massive momentum in your business.

Each of the Four Ways is unique, requiring a different strategy.

By focusing small changes and a 1% grow strategy in each of those areas the results can compound.

Imagine what would happen if in the next fiscal quarter for your business you achieved the following:

  • 1% growth in new customers.
  • 1% growth in existing customers coming back more often.
  • 1% growth in your average sale. Who would leave for a 1% price increase?
  • 1% reduction in total expenses.

I have a chart to demonstrate the effect of this. I will go through the numbers again in a future blog post.

Branding

A friend of mine, Isabelle Mercier specializes in brand creation, systems, and outsourced marketing.

This week she writes about how to create your brand.

She uses the word “envy”, which I am not big on.

I would replace with “strong desire” to have the results that the branding offers you.

Check it out here:

Mastering Envy The Key to Creating a Strong Brand in a Saturated Marketplace

Thanks for reading…