47:3 Business planning and projections - Candy Phelps
47:3 Business planning and projections - Candy Phelps

47:3 Business planning and projections

Candy shares how to develop a business plan.

Lee Matthew Jackson
Lee Matthew Jackson
Candy shares how to develop a business plan.

It’s all over the news; countries are entering or on the brink of recession. We’ve teamed up with Candy Phelps to explore essential financial skills freelancers and agency owners should flex during these times.

In this episode, we discuss the common struggles of business planning and financial management.

Candy Phelps - Bizzy Bizzy LLC


Candy Phelps

Bizzy Bizzy LLC

Questions we cover:

  • Why do agencies and freelancers tend to struggle with business planning and the financials?
  • What should financial projections include?
  • How do you make long-term goals actionable?
  • How often should we review our financial projections?
  • How do you stay motivated to do the financial tasks that you don’t enjoy?

Lee’s takeaways

During the course of interviewing Candy, here are some of my key takeaways:

  • Many freelancers and agencies find business planning and financial tasks to be unenjoyable and intimidating, and as a result, they often take a reactive approach to managing their finances.
  • It’s important for businesses to create financial projections, which involve estimating the money coming in and going out and setting goals and strategies to achieve those projections.
  • To make long-term financial goals more manageable, it’s helpful to break them down into smaller, actionable tasks and regularly review and adjust projections as needed.
  • It’s important to remember that financial management is a critical part of running a successful business, and investing time and effort into this area can pay off in the long run.

Connect with Candy

Extra listening


Lee: Welcome to Trailblazer FM. This is your host, Mr. Lee Jackson. And today we have yet again the one and only Candy. How are you today?

Candy: I’m doing great. How are you Lee?

Lee: I’m doing… Well, we just had a half hour conversation about all of my woes of sinus infections and passing colds around and now my concern about potentially getting COVID, so yeah, otherwise fine.

Candy: It’s not great for you. It’s not great. Well, I appreciate you being here anyway and toughen it out, so thanks for being here.

Lee: Oh yeah. Well, today folks, we are gonna be looking at business planning and projections. I know for one that this is one of those things that overwhelms me. I’ve got the one-page business plan and even when I sit in front of that, I sometimes just don’t know where to start or don’t know how to plan or even what to include. So the good news is, we have Candy here today, and we’ve got a series of questions to ask her, and she is going to unpick them with us. So Candy, are you ready for this?

Candy: I’m ready.

Lee: So question one is, why do agencies and freelancers tend to struggle with business planning and the financials?

Candy: Well, I think most designers and coders and entrepreneurs are problem solvers, or creatives or idea people. I know I am, and I know business planning is something that does not come naturally for me. We recently did a survey of a bunch of people in our audience who are freelancers in agencies, and things like billing and invoicing came at the very bottom of the list of their favorite things to do or things that they’re good at.

Lee: Really?

Candy: And… Yeah. It’s not a surprise, billing and invoicing is the worst. But it’s also how you get your money, so you would think some people would like doing that. But yeah, I think that the dreaming part of being a business owner is fun, but when it comes down to actually making that spreadsheet, that’s boring and kind of something people dread and it’s easier just not to do it. And a lot of freelancers especially tend to be pretty reactive when it comes to their finances or their business in general. And that’s how you get that feast and famine type of business, where you’re just taking the work as it comes in, you don’t really have a plan of how to get more work. And it takes a lot of discipline to do those sales and marketing activities regularly, it’s a lot easier just to sit there and wait for something to come to you and then do the work and then wait for the next thing to come. So I think it can be scary to create goals, it can be hard to create goals and that it’s obviously hard to stick to those goals. I think it’s just easier to avoid it, so a lot of people do.

Lee: In our agency, many, many years ago… In fact, during the first recession that I personally remember: In 2007, 2008, we were quite simply working on project where we would always say that invoice-able work was the most important thing and everything else would go to the side. So we had no financial projections, we had no marketing we had no nothing. We were just hoping to God that at the right moment some more work would come in so that more money would come in, so we were definitely bouncing around in that feast and famine cycle. Speaking of our financial projections, which we had no clue how to even create ’cause we had nothing, we had no plans whatsoever. What should our financial projections include?

Candy: Well, if you start googling about financial projections for start-ups or something like that, it can be pretty complicated and intimidating sounding. You’ll hear things like cash flow and income statements and proformas. These are all very high level, important things to do if you were gonna get a business loan or try to get investors. But if you’re not needing any of those things, which most of us are not, at the basic level, you just need to estimate the money coming in and the money going out. So it’s a pretty simple formula of making a revenue goal and then subtracting whatever fixed expenses you have. So whatever software you’re paying for, if you have an office space, anything like that. And then considering your cost of goods sold. Because we’re in a service industry, most of us don’t have a lot of those costs of goods sold, but you do have contract labor potentially, maybe there’s licenses that you pay for every website you build or something like that, so you have to factor those in as a variable expense. So depending on how many projects you sell, those costs will go up the more projects you get.

Candy: And then subtracting your salary, this is an important part. I think most freelancers tend to just keep the money that’s left over after all of those other things, and they don’t really consider salary and net profit being two separate things. But I think it’s a good business practice to get into budgeting for your own salary. There’s a really popular book called Profit First, and I think that’s… The crux of the situation is basically do that formula backwards. Figure out what your salary is going to be, what you need it to be, then build your revenue goals and your activities around that, so that you think you can get the revenue minus your expenses and all of that, but plan on paying yourself, don’t just get the work as it comes in and then you’re left with the scraps. You know what I mean?

Lee: Also when I did that, I was actually spending the scraps and then forgetting that some of those scraps actually were the government’s. Because they were profit.


Candy: Yeah, taxes.

Lee: I was like, “Oh no.” And I had this huge bill I had to pay and I had no way of paying it until thankfully, we managed to trade out of that by getting more business. But hey, there’s the old feast and famine cycle. So how do you know how much revenue you’re gonna make? ‘Cause that to me, just feel… Especially early on in kind of an agency’s life cycle, where it’s… You’ve not really got any data, have you, behind you to look at what you averagely made over the last few years so you can kind of project the future. When it’s kind of new, is it just a finger in the air and checking the wind?

Candy: Well, yeah. In some ways, projections are your best guess, but there is some information you can gather that you might already have. Let’s say you’re a freelancer who’s just first starting. Hopefully, you’re starting with some kind of leverage, whether that is a couple of past customers from a past job, or maybe you have a couple of projects lined up. Hopefully you have something in your mind that’s like, Okay, you know you can make this minimum amount of money because you either have family and friends who will give you projects or like I said, past customers. So think about that number, what is the number that’s the least amount of money that you know you can make in a year or a month, and then… I like to do kind of a wildest dreams number and think what would be a number of… Like $100,000 or whatever number it is that you think, “Wow, that would be incredible if I made that much money. It’s not likely, in my wildest dreams, that’s how much money I would make this year.” And then average those two numbers. So you’ve got the number that you know you could do in your sleep and the number that would be crazy.

Candy: And that’s usually a pretty good revenue goal for you to have, because it’s gonna push you beyond that minimum comfort level of what you know you can get, but it’s not gonna be so crazy that you’re gonna be a miserable failure if you don’t make that hundred grand in your first year out. So I think that’s a good way to do it. Like you said, once you’ve got a year under your belt or two years, then it’s much easier, you can just go back and reverse engineer. Where did you get those customers? How many projects did you have? What’s the average project? And figure your averages and just then plan for growth in the future, assuming you wanna keep making more money. So look backwards and then try to increase that revenue or those profits every year.

Lee: Absolutely. And the great thing about this, if you start right at the very beginning, you can carry that through as you develop into a full agency. However, if you are at the agency level already, you’ve already grown kind of by accident like we did, and you’ve not done any of this, it’s never too late. The great thing is you already have a history. Even if you didn’t realize it you can look back at your financials and then start to make some of those predictions. So Candy, what’s the best way to plan around major life events? I ask that because it feels like the news is full of them and we’re all affected by them all the time.

Candy: Yeah. Major life events can include anything from having a baby, COVID. Obviously, the pandemic is a major life event, major economic events. And even things like if you just wanna plan a long vacation when you’re a service-based business and you’re selling your time. These things are really important because you don’t just keep selling products while you’re on the beach… You might, if you have a really good business model and you’re selling online courses or something. But most of us have to make plans for the lack of revenue coming in while we’re not working, and there’s a lot of ways you can do that. Some of it could just be good budgeting. So planning ahead, especially if you’re about to have a kid, it’s very good to start thinking about that well in advance. When I was having a baby, my second trimester was kind of when I was feeling great and I just really hit it hard with writing down my systems and my operations and planning for whoever was gonna do some of that work while I was out. And don’t wait until you’re nine months pregnant to do that, you’re gonna feel like garbage. So try to do the planning and the hard stuff and getting your business in shape well in advance.

Candy: And then building up your recurring revenue through retainers or care plans or even products like those online courses, those are good things to do well in advance and try to start building some momentum in those areas so that you can potentially work less or take time off or hand the reins over to someone else while you’re gone. If you are dealing with an unplanned event, so a sickness or COVID or some kind of economic situation, maybe somebody gets… Your parent gets sick. Really, all you can do is good budgeting and trying to save two to three months of your expenses is kind of a minimum amount. So when we figure that formula in our projections, keeping your salary at the amount that you wanna make, but not actually paying yourself everything, the net profit and that salary. Keeping a chunk of money in your business account so that you can kind of weather the storm when things get rough and you don’t have to go back and get a job right in the middle of some kind of crisis.

Lee: Absolutely. Having that six-month buffer really helped us out during COVID especially, ’cause we found at first a lot of people, a lot of clients were very scared to spend any money and project essentially just stopped overnight. So we were able to kind of weather the storm for a little bit, and then people kind of built up the confidence as they settled into the idea of working from home and that the world wasn’t ending, it was just a bit different for a while. But yeah. If you can store some of that away, don’t take all of the money… Certainly don’t take all the money, that’s what we were doing all those years ago back in 2007, and then realized that the tax man wanted their share. Now, if you’re launching a new line of service, how can you figure that into your projections?

Candy: One of the ways that you can predict things into the future is talking to your customers before you launch that new line of service or a product like an online course. If you have an email newsletter and you have a small audience, you can do a focus group or a survey of those folks and ask them what it is they want. Ask them if they would buy this thing that you’re about to start selling, ask them how much they would pay for it. Any kind of data that you can get upfront is gonna give you a better predictor of who’s gonna actually buy it once you’ve launched it. And you definitely might find out that nobody wants it or nobody cares enough to even fill out your survey, in which case is probably not something that you wanna invest your time into. So any time you can get data ahead of time or even pre-sell things, if you’re able to get people on a list, that’s a great way to have an idea of, well, if 10 people filled out this survey and only one of them would buy it, maybe 10% of your audience or 10% of your customers will want that thing.

Candy: If you don’t have an audience and you don’t have any current customers to ask, you might wanna just not build the new thing and focus on building a list or an audience prospects through some kind of lead generation tool, so that you can build that audience before you spend a ton of time making an online course or learning some new way of building websites that’s gonna take you a really long time or be a big investment for you, if you’re not sure if anyone’s gonna buy it.

Lee: So quick story folks, before I launched this podcast back in about 20… I think it was about 2012, I invested thousands of pounds in this idea that I had. It was gonna be the most amazing Twitter management tool you could possibly imagine that would do things like bulk following and bulk unfollowing and finding users based on their… On the things that they tweeted about. So like for like or you could also do things like RSS feeds and essentially auto-tweet like crazy. And I thought this was gonna be amazing, but it took absolutely months to build. I had lots of people involved, it cost a lot of money. I had zero audience, I hadn’t asked anyone if they were interested in it. And when it came to selling it, I literally sold zero, at all.

Candy: Oh, no.

Lee: It was so depressing and it was really demotivating for a time. I was doing it as a… It was kind of like a side hustle as it were, to my existing business. I was thinking, “I’ll treat this as a… A day a week, I’ll work on this, and I’ll also work on client work as well.” So I put all of that effort and energy in and got nothing as a result. And it was only years later, after we launched the podcast and grew an audience that we were actually able to attract some specific clients that needed the… Now, really old tech that we developed, so we were able in to roll that out for them. So there’s kind of a happy ending, but that was years later. So absolutely, if you can kind of validate your idea and make sure that there are people who are interested… And also don’t ask your friends, I would say. ‘Cause I did ask my friends and my friends were just being nice, “Oh, it sounds like a great idea.” So I was like, “Oh cool, I’ll do it then.” But your friends aren’t gonna actually part with money, they are just being nice.

Candy: Yeah. Don’t ask your mom either, I hear that a lot.

Lee: Yeah. She actually thinks I’m awesome, whatever I do. Well, we like to wrap up these episodes, Candy, with that one small thing. What’s one thing that we can do to just move the needle a little bit? Some people might find doing all of their projections and a big business plan just so overwhelming, but if they can just take one step that might encourage them further. So what’s that one small thing that we could do?

Candy: Well, I think a really good thing that a lot of us don’t take enough time doing is looking backwards. And looking back to our past projects, whether it’s for the year or the life of our business. In QuickBooks, if you happen to use QuickBooks for your accounting, you can pull a sales by customer detail report or a sales by product and service report, and these things will give you huge amounts of information about what your average service price is, who your best customers are, all sorts of juicy juicy data. And then just spend some time just looking at it. Even if it’s an hour, just looking through and kinda trying to determine where did you get your best customers from? And you should know as the business owner mostly how these people are finding you. Whether it’s a referral, or whether they found you on Google or what have you. If you don’t have that information it’s great to start asking that on your contact form.

Candy: But just start getting as much information as you can and trying to put that together for a plan for the future of… If you’re getting a lot of work through SEO but it’s really low paying work and you’re getting a lot of good work through networking, then you just know that in the future, you should include more networking on your list of things to do and maybe de-prioritize your blogging or whatever that might be. But you first just have to look at the numbers and look backwards until you have a good sense of what’s been happening and what’s working well for you.

Lee: So folks, in this episode, we do encourage you to look back. Many people tell you to look to the future, we’re saying, “No, wait. Look back and learn from the data that you have.” And the cool thing is as long as you have someone doing your accounts, if that’s you or an accountant, the data should be there. QuickBooks, whatever you’re all using, take a look, have a look at those reports and see if you can just glean some of that information. And even just looking at that information and getting a small understanding of, “Oh, this is my most popular product.” Or, “Oh, this is my… The type of client that spends the most money with us.” Or, “Oh wow, this is where we’re getting most of our revenue from.” They are really powerful pieces of information to help us start to plan our future, you can start focusing on a specific product. For example, that’s what we did in Event Engine, when we finally realized that our product as a service, providing websites as a service in the events industry was going to be the most profitable and the way to go. And years later, it’s pretty much all we do now. We don’t have lots of extra services anymore, but that’s because we looked back before we could look forward.

Lee: Candy, you’ve been amazing. So thank you again so much for your time. I’m looking forward to the next episode where we’re gonna be looking at employees and benefits. So folks, be sure to check out the show notes for the links to that. Also, once you’re in the show notes, please drop us a comment and let us know what your biggest takeaway was from this episode. So all that’s left for me and Candy to do is to say ta-ta, Cheerio.

Candy: Thanks Lee.


PodcastSeason 47

Lee Matthew Jackson

Content creator, speaker & event organiser. #MyLifesAMusical #EventProfs