Building a successful business can throw up many challenges, financial and otherwise. Linda Welter joins me on the show to share her advice for business owners and gives her insight into successful business strategies that help agencies thrive in the long term. Hear insights about:
- What Linda sees as Caliber Group’s main niches and how having a spread of specialisms has helped the agency reinvent itself and grow
- Linda’s strategy for staying resilient and surviving over the long term
- How to go deep into your service line niches to be well known in a variety of industries and why it helps you pivot and survive
- The most important financial lesson Linda has learned over the 24 years of building Caliber Group
- The most significant financial mistake Linda ever made or saw other agencies make
- Strategies Linda would recommend to others who want to build an agency with longevity
- What Linda found most challenging to wrap her head around when it came to agency finances
- What systems Linda has put into place to deal with cash flow in the Caliber Group
Strategies for Building a Successful Business
Building a successful agency requires deploying several strategies simultaneously to be successful. One of the most important methods in our toolkit is building a successful brand reputation through positive client results and referrals.
It’s important to have a clearly defined vision, values, and brand positioning strategy. It is also essential to have a loyal, and committed team to support you in the work of growing your brand and winning quality clients. The key to running a successful business though is committing to understanding the details of how to run the business’s finances so you can develop and grow in the long term.
How to Run Your Business Financially
My guest on the podcast, Linda Welter, shares some of the mistakes she made in the early days of owning a business, including operating her business on a cash basis for tax purposes. She describes why it took some time before she started to simultaneously run the business on an accrual basis, as well as a cash basis, and how she learned the process. Linda also shares why it made a difference in terms of decisions that she made for the organization throughout the year as opposed to making important decisions purely on a tax basis.
Effective agencies should be run on an accrual basis, then can convert to the cash basis for taxes. Because thriving as a business depends not only on having a great product or service and marketing it well, it also depends on you getting paid — after all, if you’re not getting paid in a timely fashion the business is going to fail.
Understanding Cash Flow
All businesses will struggle with cash flow at some point in time, the pandemic was truly a test for most companies and how they managed their cash flow. Linda and I discuss why it’s essential to have two to six months of operating expenses and a line of credit in place before cash flow issues occur to protect the health of your agency. Linda acknowledges that it can be difficult to build up reserves in the early stages of building a company but goes on to share why hard choices must be made to develop this financial cushion over time.
Without reserves and a line of credit, you run the risk of falling into the trap of using the funds from clients who pay promptly to pay off the expenses for clients that are slow to pay it is just too easy to get into trouble when you operate that way. When you are intentional about both the operational and financial sides of running your company you are much more likely to see long-term success.
How to Connect with Linda Welter:
- Website: https://www.calibergroup.com
- LinkedIn: https://www.linkedin.com/in/lindawelter/
- Facebook: http://facebook.com/CaliberGroup
- Twitter: http://twitter.com/welterwisdom
- Instagram: https://www.instagram.com/CaliberGroup
About Linda Welter:
As Principal and CEO of the Caliber Group, Linda is responsible for managing and growing Caliber’s AGI through strategic planning, business development, sales and marketing, product and service innovations, and talent recruitment and development. Previously, Linda served as vice president of marketing and public relations for a financial institution and an account executive for a marketing agency.
When Linda is not managing the agency and selling its services, she helps leadership teams build, reposition and protect company brands and reputations during challenging times. Her goal is to help the leaders of organizations solve complex problems, communicate effectively, manage change, and strengthen relationships with all impacted stakeholders critical to an organization’s success when a major crisis or issue hits. She has helped numerous organizations successfully navigate reputation-defining situations, including business closures, foodborne illnesses, accusations of corporate wrong-doing, hostile mergers and acquisitions, union negotiations, ethics violations, and our current pandemic.
Linda is Accredited in Public Relations and previously served as Chair of the Public Relations Society of America (PRSA) Board of Ethics and Professional Standards. During her tenure on this Board, Linda co-authored PRSA’s Code of Ethics, which today serves as the guiding professional standards for the 20,000-member organization. She has received numerous awards for successful brand positioning, public relations, and reputation management campaigns, as well as awards for community leadership and entrepreneurial successes.