2024 Financial Changes & Updates at ANM & Co

Navigating the financial landscape of consultancy requires balancing planning and intuition. In this blog post, I dive into the evolution of my consultancy's financial health over the past few years, detailing how choices in income and expenses have shaped my profitability. My goal is to force me to reflect on my consultancy's progress, and I will only share percentages where relevant because I believe they effectively highlight the changes.
Early in my consultancy journey, breaking into the market was challenging. As my experience grew, so did my opportunities for more extensive and longer-term subcontracting projects (I could not get as an individual service provider) with leadership consulting firms. Interestingly, as these opportunities expanded, the average payment per project decreased slightly, even as overall income increased. I believe this reflects the primary challenge of being a subcontractor: more experience leads to more opportunities but at a reduced rate per engagement, which then makes you feel like you have to do more engagements. Having access to these subcontracting projects is the primary way in which my revenue has been able to increase, but it has also meant that I have not always prioritized business development for my direct clients. As I move into 2025 I aim to focus on rebuilding my business development efforts while continuing to network with consulting firms that can provide unique subcontracting opportunities to me.
What I'm most Proud of: Net Profit Growth
Over the last year, I made key decisions that drastically reduced my operating expenses by focusing on where money was flowing and cutting back on external support. For example, I reduced the costs associated with content creation, including podcast management, thought leadership support, and virtual assistance, allowing for an impressive decrease in operating expenses between 2023 and 2024. By refining my processes in Notion and leveraging AI, I not only cut costs but also increased my ability to repurpose my existing content effectively.
Despite the varied income streams, my net profit has shown an encouraging upward trend, increasing by 17.37% from 2023 to 2024, even with a reduction in my overall income. This increase is a result of my focus on maintaining profitability through effective cost management and process optimization.
Biggest Challenge: Operating Expenses
Other types of businesses would argue that my remote-first business should not have many expenses. I hop on calls and have conversations, which is fair. But the reality is that not only can there be a lot of technology and software involved in what I do day to day, but there is also a cost of staying on top of trends and my skills. You will not be able to get some types of work without the proper credentials, training, or piece of software. And they all start to add up.
My operational focus (I'm naturally a process-driven person) has led to a significant reduction in professional fees, subscriptions, and dues. By critically assessing each expense for its return on investment, I managed to decrease professional fees considerably, from around 60% of my expenses in 2023 to about 38% in 2024. This recalibration has been crucial in maintaining a lean operational budget.
Being in the Learning and Development (L&D) field, part of my job is to expand my knowledge. However, it is equally important to ensure that this continuous learning does not lead to runaway costs. I've become more selective in my educational and community investments, choosing only those programs and tools that I know will have an effective return on investment in how I run my business or the services I provide. This strategic approach allows me to balance the inherent need for professional development with the practical necessity of cost management, ensuring that every dollar spent on education and training is an investment in truly valuable learning experiences that benefit my clients and my business.
Lessons in Financial Management
The most crucial lesson has been the importance of proactive financial planning. I'm not a freelancer. I have a business plan based on the results of my previous years of business. Investing in understanding my finances, down to the granular level of each transaction, has been transformative. Finally, adopting the 'Profit First' approach has also helped me keep my spending in check. Setting aside profit, taxes and my salary first has helped stabilize my business financially and supported my personal income stability.
In the early days, I found it daunting to even glance at my bank account. The fear of not having enough or seeing a dwindling balance was overwhelming. However, over time, I developed a routine that involved regularly checking my financial status, which helped demystify my finances and reduce anxiety. I now use various spreadsheets to track every income and expense, ensuring I am always aware of my financial standing. This habit of frequent reviews has normalized the financial management process for me, turning what was once a source of stress into a routine check-up that I handle with confidence.
Additional lessons that I think are important to highlight from the last six years are:
- Be Intentional with Investments: Reflect on and be intentional about where you spend money. Once you can manage these tasks through more efficient processes or tools, you might reduce costs by reducing certain types of external support. For example, I no longer have a VA to help me with content scheduling and outreach.
- Leverage Technology for Efficiency: Invest in technologies like AI and Notion to streamline operations, which helps reduce the need for external support and allows for more efficient content management and repurposing. Please Note: Neither of these tools is helpful in a vacuum. Repurposing with AI is not possible without an existing content library and perspective. Notion will not be helpful to you unless you already have systems in place you want to replace.
- Set Projections and Understand and Monitor Financial Metrics. Review and understand your financial metrics regularly to make informed decisions that align with your business goals and plan.
- Adopt and Adapt to 'Profit First' Accounting: Implementing the 'Profit First' approach to prioritize profitability will help you manage cash flow effectively and ensure financial stability. This year, I’ve added a bucket for Education and Training to ensure that I don’t overspend in this category.
- Routine Financial Reviews: Establish a routine for regularly checking your financial status, which helps normalize financial management and reduces anxiety about finances.
- Invest in Education and Communities That Offer ROI: Be selective about educational and community investments, ensuring they provide a return on investment that benefits your business directly. I would also recommend that you invest in support where you can learn the ins and outs of accounting and how to read your balance sheet. My final suggestion in this section - do not invest 'y' with the expectation that you will get a 'x' return. A lot of programs are schemes, and you should not invest money you don't have.
As a solopreneur, I have to understand what is coming in and going out daily. These lessons are also important because many of the client relationships are held not by me but by my subcontracting partner. By writing down these insights, I hope to remind myself and others what is possible when you take a proactive, informed approach to your finances, even if you are technically a team of one.
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