Small Business Workbook:

Understanding Your Business

and What Makes It Work

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Congratulations! You just took a serious step in the right direction to achieving

your American Dream! By committing to the completion of this workbook,

you are committing to doing everything you can to reach your goals, and we

are honored to part of your journey!

As you progress through this workbook, keep in mind that its purpose is to

help you achieve four key goals:

1. Identify what you have/need

2. Identify a plan to acquire what you need

3. Understand what drives your business forward

4. Understand what you need to do to move your business forward

We feel as though the best way to go about this process is to ensure you are

aware of your essential resources, your admin and structure, your financial

planning, your marketing and sales, your human resources, and your time

management. You can complete this workbook on your own (it is written with

that goal in mind) but if you have difficulty or simply want help for any

reason, we can help you complete it. Just email us at

john.beaman@mcgrawcouncil.com and we will happy to assist!

Whenever you, as a small business owner, say “help” or “I don’t know”, reach

out to us so we can help you – we exist to help you achieve your American

Dream!

Table of Contents Essential Resources .......................................................................................... 3

Admin and Structure ....................................................................................... 7

Financial Planning ......................................................................................... 10

Marketing & Sales ......................................................................................... 14

Human Resources .......................................................................................... 20

Your Time....................................................................................................... 22

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Essential Resources Legal Counsel:

1. When you have legal issues come up, who do you call?

Identify what purpose they serve, what specialty they focus on, and

their general availability.

2. Do they have connections for other areas if they cannot help you

directly?

They should have attorneys to refer if they do not specialize in an

issue – for example, an injuries attorney is not the best choice for real

estate transactions, but they should know someone who is well-versed

in real estate.

3. Legal Entity – LLC, sole proprietor, S-Corp, C-Corp, etc.?

The legal entity of your business should protect you, as an individual,

from professional liabilities but also maximize your tax situation so

you do not pay “double taxes” if possible.

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Essential Resources

Financial Counsel

1. Who helps you with the financial management of your company?

Bookkeeper sufficient for $0-249,999 revenue

Accountant sufficient for $250,000-1,449,000

CFO Services ideal for $1,500,000+

2. Who files and manages your taxes?

They should have experience in your industry

They should provide proactive advice on your tax situation

They should match your strategic direction (if you are very

conservative, do not select a very aggressive tax consultant)

3. Can your financial counsel help you grow or are they more

project/task based?

For example, a bookkeeper is usually more task-oriented while a

fractional CFO is more planning/growth-oriented.

4. Does this counsel have the full financial picture of your business?

Your financial counsel should know everything about the finances of

your business or they will not be able to serve you the way you need to

be served.

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Essential Resources

Capital and Financing

1. Who funds/finances your company?

2. What is their capacity?

3. What is your relationship with them?

4. How long have you worked together?

5. Have they met and exceeded your expectations consistently?

6. Are they there for you when you need help? Restated, are they a

partner in your business or just a financer (transactional vs relational)?

7. In what situations have they not been able to help?

Ideal:

A funder that has capacity to serve you, a variety of options, a good

relationship, and has shown they go the extra mile for you.

6

Essential Resources

Business Plan

1. What is your business plan? If you don’t have it easily accessible and

saved, you don’t have one and must get one.

2. Is your business plan up-to-date?

3. What is your 1, 3, and 5-year plan?

4. Is your team/company knowledgeable of your business plan?

Ideal:

You should have a well-articulated business plan that everyone in your

organization knows of (to at least some extent) and that clearly states your

values, your vision, and your mission. Moreover, the ideal busines plan will

have addendums/attachments that include timelines, specifically 1, 3, and 5-

year plans.

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Admin and Structure

Note: it would be prudent to include this in your business plan.

Structure

1. Who reports to who?

Making a chart will be helpful, especially if displayed in your office.

2. Who has the final say?

When push comes to shove, state in advance who has final authority.

3. Who “calls the shots”?

Each organization should have a leader – who is that leader in your

business? It should be you but more importantly, make sure everyone

knows who it is.

Silos

1. Vertically vs horizontally structured

2. Product vs business function

3. Department vs geography

Ideal:

Unfortunately, there is not really one ideal, but the good news is that it is

almost entirely up to you.

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Admin and Structure

Supply Chains:

1. What supplies/resources do you need to make money?

2. Where/when/how do you get these resources?

3. What are your backup plans if these main sources fail?

4. How do you convert these resources to revenues?

Systems

1. What systems do you currently have in place?

2. What systems do you need?

3. What systems do you want?

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Admin and Structure

Growth

1. What is your end goal?

2. What steps get you there?

3. How will you grow (labor, marketing, facilities, etc.)?

4. When will you grow?

5. What do you need to grow (capital, labor, equipment, time, etc.)?

6. What are your KPIs?

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Financial Planning

Financial Statements

1. Income statement (PnL)

2. Balance sheet

3. Statement of cash flows

Pro-Formas

1. Attach a simple pro-form here – if you don’t have one, get one.

2. What does the future hold for your finances?

3. How much cash will you need to sustain?

4. When will you need the cash?

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Financial Planning

Key Metrics

1. Project Profit Margin

2. Net Profit Margin

3. Return on Assets

4. Current Ratio

5. Quick Ratio

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Financial Planning

Key Metrics

6. Total Liabilities to Total Assets

7. Working Capital to Total Assets

8. Doomsday Ratio

9. Collection Period

13

Financial Planning

Reviews and Analysis

1. Are you in a good position?

2. How long can you sustain the current trajectory?

3. What do your financial ratios tell you?

Financing

1. Why would a bank want to give you money?

2. What hard assets can you leverage?

3. Why are you a good choice for lending (credit score, credit history,

assets to leverage, business plan, pro-formas, etc.)?

4. What are your alternative options (angel investors, short-term

investors, equity sales, MCAs, factors, etc.)?

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Marketing & Sales

Customer Avatar

1. Sex

2. Age

3. Ethnicity

4. Title(s) (if applicable)

5. Location/geography

a. Location of purchase

b. Residence

c. Workplace

6. Interests

a. Hobbies

b. Religion

c. Political leanings

d. Values

5. Common and notable customer behaviors

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Marketing & Sales

Customer Journey

1. Awareness

a. How do your clients hear about you?

b. Where are they?

c. What are they doing?

2. Initial consideration

a. What makes them think about whether they need the

service/product you provide?

b. What triggers them to click an add or visit your website (or

other sales material)?

c. What “hooks” your customers?

3. Active consideration

a. What makes them look at your reviews?

b. What makes them reach out to you for questions?

c. What are they feeling when seriously considering your

product/service?

4. Purchase decision

a. What differentiates you from the competition in the

CUSTOMER’S mind?

b. What makes you the “feel good” company?

c. What makes you the logical choice?

d. What makes the customer feel good about buying from you?

5. Loyalty loop

a. How do you stay in contact with your customers?

b. How do you continue to help them solve/prevent their

problems?

c. How do you remain at the forefront of your industry?

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Marketing & Sales

Sales Process

1. How do you communicate with your prospects?

2. How do you close your prospects?

3. What factors/metrics (KPIs) lead to prospects, leads, and sales?

4. Describe your sales process – can your products/services be purchased

100% online or is human interaction required?

5. What is needed from you and your customer to close a sale?

6. How easy is this process and how can it be made easier for your

customers?

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Marketing & Sales

Customer Relationship Management

1. Platform of communicating with your customers

a. Emails

i. Open rate – aim for 15%

ii. Click rate – aim for 2%

iii. Delivered – aim for 98%

iv. What is being clicked – aim for engagement on

links/clicks

b. Social media

i. Reach – base on your service area

ii. Engagement – aim for 3% of followers

iii. Followers – base on your service area

.

c. Texts

i. Open rate – aim for 25%

ii. Click rate – aim for 3%

iii. Delivered – aim for 99%

.

d. Call center

i. Number of calls

ii. Answered Calls

iii. Conversations

iv. Issues/questions resolved

v. Sales closed/goals accomplished.

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Marketing & Sales

Customer Relationship Management

2. Methods of communication you use

3. Timing of communication

4. Sequence of communication

5. Automated components and opportunities

6. Generating additional value from communication

a. Reviews

b. Referrals

c. Upsells

d. Advocates

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Marketing & Sales

KPIs and Metrics

1. What factors are directly correlated to sales?

2. How much/many of that factor leads to one sale?

3. How long does it take for a customer to complete the customer

journey (from awareness through purchase)?

4. Based on your goals, what do you need to do each day to achieve your

1, 3, and 5-year goals?

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Human Resources

Culture

1. Your current culture

a. Flexible vs rigid

b. Creative vs rule-based

c. Casual vs formal

d. Ambitious vs laid back

2. Your desired culture

a. Flexible vs rigid

b. Creative vs rule-based

c. Casual vs formal

d. Ambitious vs laid back

3. Demonstrating culture

a. Values should be noted in the business plan

b. Things you do to reinforce the values

c. Rituals/ceremonies you conduct to reinforce the values

d. How you recognize those who exemplify your culture

Note: To get a deeper view of your culture, survey your employees and teams

to see what they think – this will help you get a more accurate view of your

culture.

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Human Resources

HR Needs

1. What HR resource do you need (compliance, W-2s, 1099s, skills,

training, etc.)?

2. How much of/many resources do you need?

3. Specific role you have and need

4. Specific cultural match you have and need

5. Specific talents and skills you have and need

How You Acquire These HR Resources

1. What is your process?

2. What are your HR goals?

3. What are your HR strengths/weaknesses?

4. Is your HR more internal or more external?

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Your Time

Time Management

1. Write out everything you do in a normal day, how long it takes you to

do it, and make it look like a schedule.

2. Do you have balance? Do you have time for yourself, your family, and

your business? Your business will take everything you’ve got, but it

should not prevent you from investing in yourself and your family.

Use of Time: Good or Bad?

1. How much time each day is spent “in” your business?

2. How much time each day is spent “on” your business?

3. What activities can be delegated/outsourced? How can you make

activities delegate-able?

4. Do your daily activities truly lead you to achieving your goals? If not,

what can you change?

5. What overhead/waste can be cut?

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Congratulations!

You have officially completed this workbook – well done! As a small business

ourselves, we know that this not the end of your journey, but rather the

beginning of a new chapter! Know that we are always here for you to serve

you and help you achieve your American Dream! We are all very excited that

you took this next step and look forward to seeing you and your business

thrive!

We know that you probably have various questions relating to your business,

and we are here to help you answer them. If you cannot answer a question, do

not know how to answer it, or simply need advice, guidance, or a resource to

help you move your business forward, please reach out to us at

john.beaman@mcgrawcouncil.com and we will be happy to help in any way

we can! We exist to help you achieve your American Dream!