Welcome to the Bathtub Refinishers Business Stability Planner

At Shark Grip Coatings, we understand that there are many reasons why businesses might resort to low ball pricing. Not all of these reasons are nefarious; often, it's simply due to a lack of understanding about how to run a business effectively. Many of us enter the business world with dreams of living the American Dream, fueled by excitement and ambition. However, without prior experience in business, it’s easy to overlook the critical importance of capitalization.

Starting a business without sufficient capital means you may find yourself operating from a place of duress, making decisions that could have long-term negative effects on your reputation and financial health. The initial months of your business are crucial—they form the foundation upon which you will build your client base and generate referrals. Unfortunately, this period is also likely to be the most expensive, as you invest in advertising to get your name out there.

Think about it: you’re establishing your reputation as the person who does the highest quality work for the lowest prices. While this might bring in customers initially, it can lead to a situation where you feel like you're running on a treadmill—working harder and harder without getting anywhere. This can lead to overwhelming feelings of doom and gloom.

For those who are informed before they start their business, planning ahead and ensuring proper capitalization will make the journey to success more manageable, though still challenging. After speaking to thousands of refinishers over the years, we've identified this lack of capitalization as the greatest contributor to declining market prices. Rather than just pointing out this problem, we've created a fundamental tool to give you a solid understanding of where you are and where you need to be—especially if you're a great refinisher who wants to improve your pricing structure.

Objective:

To create a practical tool and a set of actionable steps for businesses that are currently undercapitalized, enabling them to build a reserve of 90 days of both personal and business expenses. This will help them avoid the pitfalls of underbidding and taking on low-paying jobs out of necessity.

Key Points:

Importance of Capitalization:

• Minimum Reserves: Ensure at least 3 months of personal household expenses and 3 months of business expenses are saved before or during business operations.
• Operating from Strength: Having these reserves prevents decisions made under financial duress, which often lead to the "circle of death" where businesses take on low-paying jobs just to cover immediate costs.

Advice for Undercapitalized Businesses:

• Set Aside Small Amounts: Start by saving a small portion from each job, even if it’s just 1-5%. This creates a habit and gradually builds towards the 90-day reserve.
• Treat It Like a New Investment: Encourage owners to mentally step back and view this as if they were investing in a new startup. By distancing themselves personally, they can make more rational, business-focused decisions.
• Relaunch Mentality: Frame this process as a relaunch of their business. This mindset shift helps in removing personal attachment and focusing purely on business needs.

Tool Development:

• Expense Tracking:
  • Business Expenses: Provide a comprehensive list of business expenses to help users track and predict their costs.
  • Personal Expenses: Include a list of common personal expenses (e.g., rent/mortgage, utilities, groceries, insurance, transportation, etc.) to ensure they account for all necessary savings.
• Monthly Savings Plan:
  • Initial Calculation: Users will total their last 90 days of business and personal expenses to set a savings goal.
  • Monthly Targets: Based on their total, break down how much they need to save each month over 12 months.
  • Progress Tracker: Include a table where users can enter their monthly savings. The tool will adjust future savings goals if they are short or exceed their monthly target, ensuring they stay on track.

10 Specific Steps to Escape the "Circle of Death":

1. Create a Realistic Budget: List all personal and business expenses, and identify areas where costs can be reduced.
2. Set a Monthly Savings Goal: Based on the budget, set a realistic amount to save each month towards the 90-day reserve.
3. Prioritize High-Margin Jobs: Focus on jobs that offer the best return on investment rather than those that only cover immediate expenses.
4. Negotiate Payment Terms: Try to negotiate better payment terms with clients, such as upfront payments or progress payments.
5. Diversify Income Streams: Explore additional services or products that can be offered to increase revenue.
6. Cut Non-Essential Spending: Review both personal and business expenses and cut back on anything that isn’t essential to operations or well-being.
7. Automate Savings: Set up an automatic transfer to a savings account dedicated to the 90-day reserve.
8. Track Progress Regularly: Use the tool to monitor savings and adjust goals as needed based on actual income and expenses.
9. Seek Professional Advice: Consider consulting with a financial advisor or business mentor to ensure the savings strategy is sound.
10. Stay Disciplined: Commit to the savings plan even when it’s difficult. Remember, this is an investment in the stability and future success of the business.

Comprehensive List of Personal Expenses:

• Housing Costs: Rent or mortgage, property taxes, homeowner’s insurance.
• Utilities: Electricity, water, gas, trash service, internet, phone.
• Transportation: Car payments, insurance, gas, maintenance, public transport.
• Food: Groceries, dining out.
• Health: Insurance premiums, out-of-pocket medical expenses, prescriptions.
• Debt Repayment: Credit card payments, student loans, personal loans.
• Insurance: Life insurance, disability insurance, any additional policies.
• Childcare/Education: Tuition, daycare, school supplies, extracurricular activities.
• Miscellaneous: Entertainment, subscriptions, clothing, personal care.

Logic and Suggestions:

• Consistency: Ensure the tool is easy to use and consistent in tracking both business and personal expenses. This will help users stay committed to their savings goals.
• Flexibility: Allow users to adjust their savings plan based on fluctuations in income or unexpected expenses. The tool should adapt to these changes without causing undue stress.
• Educational Component: Consider adding educational resources within the tool, such as tips on budgeting, saving, and managing finances during tough times.

Running a business without sufficient capital is risky. Without a financial cushion, you may find yourself accepting underpaid work just to cover immediate expenses—a cycle that can lead to what we call the "circle of death." This not only affects your financial health but also your reputation, as you might be forced to deliver high-quality work at low rates.

The Bathtub Refinishers Business Stability Planner is designed to help you break free from this cycle by building a 90-day reserve of both personal and business expenses. By consistently saving and managing your expenses, you'll be in a stronger position to make strategic decisions without the pressure of immediate financial obligations. This tool helps you track your current expenses, set savings goals, and ultimately achieve financial stability.

Best of all, this tool is completely private—none of your information is collected. This is our way of giving back to the industry and helping you take the first steps towards business financial freedom.