Mastering Small Business Financial Success with Winnie Sun
Meet Winnie Sun
Financial Whisperer, Startup Growth Guru, and Most Authentic Human
Winnie Sun is the solution to every business’s daily dilemma, “How do I effectively & financially plan for the future?” Her advice has earned her an envied spot on the CNBC Digital Financial Advisory council in addition to her role as Founding Partner of Sun Group Wealth Partners, a trusted financial consulting firm in California.
For many small businesses, financial planning is a mammoth challenge. In a CB Insights analysis, 101 startup founders were polled on the reasons why their businesses went under and it was found that 29% failed because they ran out of cash. Thought Bakery got the opportunity to chat with Winnie about when you should start your own venture and how small businesses and startups can avoid cash underflows by proactively taking financial planning head on from the start.
When you’ve got a side hustle that’s rapidly growing what are some of the key things to consider before quitting your main gig?
I would recommend keeping your day job until your side job can double what your regular job earnings provide. There's a big misconception that you have to choose between the two, you don't. It’s actually a smart financial decision not to choose because in today’s economic climate, it has become highly common to own both a day job and a passion project, with more people wanting to pave their own way forward.
What’s an effective way to keep your personal and entrepreneurial ventures separated, to ensure a healthy balance between the management of both?
As an entrepreneur your life is probably already a little hectic; that’s why it’s critical to ensure managing your budget is as simple as possible. You can’t get so detailed on every little penny of your spend because it prevents you from building your genius — your genius is the creative juice that leads to driving 2, 5, 10X of your current return. Ideally, you want to keep your expenditures to no more than 20% of your small business or startup’s income. Additionally, if you’re keeping your day job, you can take 20% of your income that you’re generating from your day job as a fixed deposit amount to help scale growth for your side business.
One of my biggest rules of thumb is that your side business needs to start producing revenue within 3 months. If you’re struggling to secure clients or bring in income within 3 months, you need to pivot and pivot quickly towards a direction that’ll provoke cash inflow. Review your business model, if the business idea was strong it should be able to generate sales within a short space of time from launch. Before jumping into full-time entrepreneurship, you definitely should have 1-2 clients committed to ensure cash flow is committed for the foreseeable future. This is what it means to be financially responsible from day one.
As an entrepreneur starting off, should you have a banked amount of savings in order to launch a new venture successfully?
Yes, I absolutely think you should! As a new entrepreneur, you'll often burn through cash pretty quickly if you're not refilling the pool. Additionally, it’s non-negotiable if you're going into business on your own, it’s critical that you pay yourself a salary upfront. Don’t just count yourself as the first employee of the business, but treat yourself like one as well.
What are some of the priorities from a financial wellness perspective that entrepreneurs should be mindful of when setting out or scaling growth?
The key thing when you're building a business is knowing where to spend money. The first thing you should do is invest in making your product or service hyper-relevant to your target markets. The resources that you spend on next should be able to provide a fair return on investment. When you set the primary priority of the venture as securing clients, organic growth will come naturally.
Consider how you can take $1, $10, or even $100 and translate it into new business. Personally, I looked at my prospecting efforts and where I could turn to for finding new clients to sell my goods or services. The great thing about social media is that it makes it very inexpensive to go-to-market today with setting your own budgets on platforms like Google, Facebook, and Instagram. However, you should still remain cautious as to not pay for advertising that’s not effective. Always remember, the user value of the product/service is the most authentic channel of customer acquisition and retention.
It's really important to analyze your budget in a very mindful way. Look at what competitors are doing in your space and see if you can craft your own version, using the resources you have available or absorbing their ideas as inspiration for creating something new. Get innovative! Borrow lighting equipment or cameras! Offer free products or services to event spaces to barter affordable rates! Do whatever you need to do to create visually engaging marketing content and keep your budget as low as possible. This is a great step forward in reducing your financial risk to a minimal level.
Once you book your first client you can allocate about 20% of what you bring in for marketing purposes to keep the client acquisition engine running. It’s easy to spend but it's also really difficult to scale growth in the first year, so you really have to manage your operations like you have nothing. Even now, I’m on my second business which is a multi-million-dollar firm, and I still budget like I have no money.
On your website, you have a section dedicated to nonprofits. What are some of the considerations non-profit founders should consider when trying to develop a financial plan?
When you run a nonprofit you’re obviously are a very special person. Too often, I’ll come across charities and nonprofits that are great at what they do in terms of their cause, but they don't run their charities like a business. You have to manage the operation like a viable business because it has to be sustainable in order for you to continue helping others. If you always rely on donations and gifts it's very hard to make it a successful venture in the long-term.
Charities that my team works with will invest in assets like real estate and income property, to help generate income and advance growth of the charity’s reach and credibility. They definitely diversify their assets which inadvertently adds to the stability of their cash flow and security for company’s future ahead.
Social media seems to be key in your go-to-market strategy. What are some of the things you believe have significantly contributed to your approach in taking an authentic, approach to this media space?
I'm no different on social media then I am in person. A lot of my clients are like my best friends, I'm constantly thinking of opportunities to give them more business or revenue. If they're unhappy and just need someone to listen, then I will try to fill that void for them.
What I give to people on social media is what I get in return, meaning: I’ll say something to you because I really think that at that moment that could be me and what I'm giving you is the advice I would love to receive at that moment.
I'm actually extremely introverted. When I first started doing media outreach I was not who I am today. I’ve learned so much about people and learned to be a better listener by being on social. In my Tweetchat, my goal is to always respond to every single tweet on the whole chat. I feel that if you're going to spend the time to come to my chat I will try my hardest to answer and respond. I’m very grateful for the following that I've built.
On another note, you speak a lot about the importance of having a work-life balance. How do you balance managing a company and nurturing your personal life?
In order to achieve balance, you have to get to a point where your business and your team can sustain efficient management and operation of the firm without you being there — maybe not forever, but for a significant amount of time. I should be able to go on vacation and not worry about the company.
One of the things which has worked well for my team is that we’ve been together for a very long time. You have to foster and nurture your team so that they feel invested and in it with you for the long haul. It’s not only good for you in terms of your business’s longevity, but it's great for your clients and fellow peers in building sustainable relationships which last. I'm really mindful of nurturing our team and how they work together. With every person in our squad, I spend a good amount of time focusing on our personal relationship and checking in on them as a human. Because of that, they reciprocate mutual trust by giving me the same level of respect and love.
Winnie Sun inspired me, Chae O’Brien, to share my voice and vision with the world. She’s one of the many people I credit with subliminally pushing me to create what is now Thought Bakery. Will I ever be able to make it up to her? Probably not, but here’s to hoping that by sharing her advice with you, I’ve passed on her inspiration so someone else can take their dreams forward. You can reach out to Winnie via her Twitter or Instagram.