How to Set the Right Goals For Your Business (Plus Set Up Your Business Entity and Pay Yourself Wisely)

Ali Katz:
And now that you're in business for yourself, you are the creator of your reality. Literally, you have 100% control.

Ali Katz:
We are going to explore setting realistic goals and how to shoot for the stars and at least make it to the moon. Which levers to pull, where to focus your energy and attention, how to overcome fear and master client engagement and set up your business entity, and then align your calendar with your financial goals. Do note that in this episode, I mention…

Ali Katz:
We are going to explore setting realistic goals and how to shoot for the stars and at least make it to the moon. Which levers to pull, where to focus your energy and attention, how to overcome fear and master client engagement and set up your business entity, and then align your calendar with your financial goals. Do note that in this episode, I mention family wealth planning sessions or life and legacy planning sessions quite a few times and the planning session is something that I teach as part of our system for engaging clients and it's a key part of that system where you actually take people through the process of deciding whether or not to work with you.

Ali Katz:
So that's a little context for that session. We do, of course, teach that in our Personal Family Lawyer trainings, and you can find out more about them at newlaw.co/show when you're ready for that. But for now, let's get into the episode.

Ali Katz:
That is what this call is all about, how to really start to make that shift in your business to that you have a business, not just a practice. You have a business. And so that's what this call is going to focus on. And I'm gonna read a little quote that Steph gave us today. Steph is hosting this call with me. This is a quote from Michelangelo. It's pretty cool. She said, the greater danger for most of us lies in not setting our aim too high and falling short, but in setting our aim too low and achieving our mark.

Ali Katz:
Setting our aim too low. Now, why would we set our aim too low? Why would we set our aim too low? Fear. Yeah, fear. But it's like a specific kind of fear, right? That you're not shooting high enough because you're afraid of disappointment you don't want to disappoint yourself. You don't want to disappoint other people. You don't want to disappoint your parents. You don't want to disappoint the outside world. You don't want to disappoint the people that watch you on social media.

Ali Katz:
But really, mostly, you don't want to disappoint yourself. And so you just shoot too low, because probably throughout your life, you have disappointed yourself. You've been disappointed, and so you're protecting yourself. But here's the thing. You all went to law school. You all passed the bar. So as new business owners or those who have been in business for a while but have made this the year that you're going to say, I'm going to take this business seriously, I'm going to aim for the stars, let's start there. Let's look at where do you want to be this time next year? Where do you want to be a year from now when we're together on this call a year from now, where are you? What's different? And I see Ashley writing.

Ali Katz:
All of you could be doing that. All of you could be doing that. That is the perfect thing to be doing, is if you have a pen and a paper and you can write. I have stacks of journals from when I was building my practice 20 years ago, and because I just wrote it all down. I wrote it all down. I wrote it all down, and I wrote it all down so many times that it ended up happening. It, like, anchored it in to my brain. So I want you to write it down.

Ali Katz:
You could type, you could put it on your phone, but there is really something special about this connection. You know, we don't write enough anymore, and so writing it down really does something.

Ali Katz:
So the things I want you to know about where you're going to be a year from now really come down to the number of clients you're going to be serving and your average fee, and then you can back into everything else. And I want you to make the decision to identify the number of clients and the average fee based on how much do you want to be taking home and how many hours do you want to be working. Because you get to dial these levers and dial these metrics. You get to dial the levers in the metrics. And now that you're in business for yourself, you are the creator of your reality. Literally, you have 100% control. And that's one of our values here in our company. Your choices create reality.

Ali Katz:
Our choices create reality, and they really do. And so any place that you feel not empowered personally to create your reality, we get to look at through the lens of your business, through the lens of your choices, through the lens of where are you putting your attention. And the key that I have found is allowing your numbers to drive where you're putting your attention, because that just laser focuses everything. That just laser focuses everything when you put your attention on the right numbers. Now Ashley asked, I've worked for the government my whole career, and I just started my firm in the last six months. What do I not know about being a business owner? Well, there's a million things you don't know about being a business owner, and many of them you will only discover as you come up against them. We're going to shortcut your process significantly. The very first thing that I can tell you that you don't know about being a business owner is how critically important it is to treat your business like a business.

Ali Katz:
And what that means is that you incorporate your business. You get the right agreements in place, you get the right insurance in place, you set up your financial systems and your tracking in the right way. And come October or November, you start planning to pay as little as possible on your taxes. But every month, because of the way you're looking at your profit and loss, you're paying as little as possible on your taxes. You're preparing for that time. So it's not like you're just waiting till the end of the year. You're actually preparing every month by how you work with your bookkeeper. Now we teach you all of what I just said in LIFT for lawyers, my LIFT program, which if you are a LIFTed business advisor, you can use with your clients and take your clients through this whole process on a one to one basis.

Ali Katz:
But you have access to as any level of member through LIFT for lawyers. And LIFT for lawyers takes you through the legal, insurance, financial and tax pieces of the bigger LIFT training, but specific to your law practice, specific to your law practice, what type of entity structure. Obviously, you're all going to form your entity in the state that you are serving clients. Not all businesses have to do that. Sometimes, you know, I have the entities in Wyoming, Nevada and Delaware. You're going to have an entity in your state, and it's going to probably be a professional LLC or a professional corporation based on the specifics of your state. Like in California, it makes more sense to have a professional corporation because you pay an additional franchise tax on a professional LLC. So you're going to learn that in your state, and then you're going to name that based on where do you want to go? Are you building a business that's going to have your name, or do you want it to be something bigger than you? Are you allowed to have a trade name in your state? Is it time maybe to change your name? I can tell you this, some of you already know this story from the teachings.

Ali Katz:
My very first firm name was Alexis Martin Neely, attorney and counselor at law. And then I realized I'm going to have other attorneys work with me. They're not going to want to give out a business card that says, Alexis Martin Neely, attorney and counselor at law. I need to make this a bigger thing. So then I used my maiden name and my married name, Martin Neely and associates. So that's a bigger thing. Had I continued to practice in my own practice, I would have ended up with a name that didn't have my name in it. I would have ended up with something, well, kind of like I did family wealth planning institute.

Ali Katz:
That wasn't a law firm, but I began to then take it out beyond me, beyond me personally. And so you base that decision on where you want to go. If you only ever want to be a true solo, seeing four to six new clients a month, maybe it can have your name. It makes it less saleable down the road. It makes it less saleable down the road. If you know that you want to bring on other attorneys, you want to make it bigger. If you know that you want to sell it. If you know that you want to be a million dollar empire builder, give it a name that isn't your name.

Ali Katz:
Give it a name that isn't your name at all. Give it a name that when you're bringing other attorneys in to see the clients, they're going to be happy to give that card out because it's not you. It's a we. It's an us. It's bigger than you.

Ali Katz:
Would you love direct support to help you grow your law practice into a business you love? Go to newlaw.co/show and sign up for a call with one of our trusted law business advisors. Each of our advisors has been trained directly by me over the past five years plus to help you chart your path from wherever you are now to where you want to go as efficiently and effectively as possible. You're ready to grow, we are here to help.

Ali Katz:
So this is January. This is just perfect time to be starting off. All of this thinking, because you've got the entire year to hit your goals. Now, the reality is you always have an entire year to hit your goals, because every month it's a new month. But it's also okay, you still have a year. You have as long as you want to hit your goals. The important thing is that you have the goals.

Ali Katz:
And if at all possible, it's nice to set your goals on a quarterly basis. I didn't know that. I didn't know about quarterly. Oh, quarterly. That, that buys me a little more time. Doesn't have to be monthly, right? So we're in the first quarter, and the first quarter is really great to focus on the future, the vision, new, your new business entity. If you have a new business entity, when you set up your business entity, keep your business and personal financials separate.

Ali Katz:
Set up your business bank account. Have all of your clients pay you into your business bank account, have everyone you hire, you paid out of your business bank account, and you pay yourself out of your business bank account. You paying yourself out of your business bank account is a big milestone. Now, when many of us start out in business, what we don't know is that we shouldn't just take money out of the bank account or use the business funds for our personal matters or use the business credit card for personal things. You can do that. You certainly can. It just makes things messy. So you want business credit cards.

Ali Katz:
Now, the other reason that you want business credit cards is that you need funding. That's the other thing you don't know about business, is that using credit to grow your business is smart. Very smart. That's something that we don't get taught. We don't get taught how to do it smart. And so a lot of you that are starting to use credit, well, use your personal credit. Just put things on your personal credit card. That's all you have.

Ali Katz:
And then what happens is if you use more than 30% of any one of your personal credit cards, or a total of over 30% across all of your available credit, your credit score starts to go down. Once your credit score starts to go down, not because you haven't paid your bills, but because you've used too much of your available credit, makes it hard to get business credit. So before you do that, what I want you to do, and all of you should do right after this call, is go to credit karma and check your credit score. I recommend you check your credit score every month. Sometimes I check mine every week. And I'm doing that because I want to be in right relationship with my credit score. And sometimes my credit cards get over 30% and I don't notice. Now, I have my financial team track that, but in the past I didn't.

Ali Katz:
And so you want to check your credit score. When your credit score is above 720, that's when you apply for business credit. That's when you apply for business credit. And business credit is the credit that is in the name of your business entity. They will still use your personal credit score. You are still making a personal guarantee. So if your business doesn't pay, you're still saying that you're going to pay, but it doesn't report on your credit score unless it's a capital one card, in which case it does. I have a capital one card.

Ali Katz:
I just always have to make sure I keep it below 30%, whereas my chase cards, they could get close to the limit and it won't hurt my personal credit score. Well, my chase business cards, my chase personal card reports on my credit score. So I always am juggling credit because that way I'm able to make investments in my business even before I have the revenue coming in. And that's what's necessary to grow. You got to make the investments as if you know the money's coming because making those investments is what builds your capacity to serve clients. And making those investments is what allows you to generate the clients. And you're always in this dance. Investments to generate clients.

Ali Katz:
Investments to increase your capacity, you'll hit plateaus. Four new clients a month consistently is your first plateau. When you hit four new clients a month consistently, and you can serve those clients and your average fee is $4,000, that's 16,000 a month. If your average fee is 4500, that's 18,000 a month. If your average fee is 5000, that's 20,000 a month. That's the minimum. That's your number one goal. Whether you want that goal to occur in three months or one year or two years, because who knows what you have going on in your life.

Ali Katz:
That is goal number one. Four clients a month consistently. Now, the way to get to four clients a month consistently is to put the right number of planning sessions on your calendar. And when I say the right number, what I mean is that if I pulled up your calendar right now, I would see only enough planning sessions held open that are necessary for you to fill so that you can hit your goal. And that is determined based on your conversion rate. If you have an 80% conversion rate and your goal is four new clients a month, how many family wealth planning session spots do you need available on your calendar? Five. I would go with six. Because you want to make a little room for a little no show or cancellation.

Ali Katz:
People cancel there, something comes up, reschedules. So what that means is if I called your office right now and I said, I want to book a planning session with Trisha, I want Trisha's team, whoever's doing Trisha's intake, or Trisha, to say, great, would you like to come in on February 2 at 03:00 p.m. Or February 4 at 05:00 p.m? Or whatever the next two are? Not some random dates, not when would you like to come in? But Trisha only has six appointments available in February, period, and they're pre blocked. And that, if you are new, should be your first goal, is you have those six sessions if you have an 80% conversion rate. Now, if you do not have an 80% conversion rate, let's say you have a 50%. Well, then you need to block 8, 10.

Ali Katz:
Yeah. Because you might have two cancellations. So right there, what we can see is how important it is for you to focus on your conversion rate. It's the single most important metric in your business. What percentage of my clients, what percentage of my prospects that I meet with do I engage? What percentage of the people that book a family wealth planning session or life and legacy planning session keep their appointment? Because these are the places that you could focus and make improvement. Right? So if you're on the screen, you're seeing me. You're seeing me, like, move my hands as if I'm turning a dial, because that's what I'm doing. I'm turning a dial.

Ali Katz:
That's what you're doing. When you put your attention in a specific place, if you track the number of inquiries you're getting and the number, what percentage of those inquiries turn into booked planning sessions, and then what percentage of those planning sessions turn into engaged clients, you will improve those metrics. And so you might not already know that about business, because nobody would have ever taught you that. And it is worth you investing in improving those metrics, because once you improve those metrics, your ability to earn money is fairly unlimited. It is only limited by your capacity to serve. So if you can get inquiries, and you could get those inquiries to turn into booked appointments, and you could get those booked appointments to turn into paying clients, you have a money making machine. Now, the really great part for all of you is that you don't have to design the pricing model or the service delivery model or the hiring plans. We've done all that for you when you're ready for it.

Ali Katz:
Most business owners have to figure all that out. How am I going to package my services? How am I going to price my services? How am I going to deliver my services? We've given you the baseline, but what we've given you is just a baseline. You don't have to stick with it forever. You do want to master it before you improve upon it. Some of you will want to improve upon it before you've mastered it. Pam Maas Garrett's average fee is now $8,000. $8,000. But she didn't start there.

Ali Katz:
She started with the foundational plans. Okay, so just giving you these examples to show you where you can go, but you got to start with the fundamentals. And the fundamentals are your business entity, your financial systems, setting your goals, tracking your numbers, and getting to four, which is really six or eight on your calendar and setting up your calendar. If you get your calendar set up, you're unstoppable. I can look at your calendar and tell you how long you're going to spin in circles and feel frustrated versus how fast you're going to make really streamlined progress, which means you can look at your calendar and tell that too. And so I want to invite you to go to your calendar right now, whether it's Google Calendar or Outlook calendar, and look at it. Is it set up for success? Do you have all of your proactive time blocks to match your goals with the reality you want to create? If not, do that.

If you loved that episode and you don't want to go it alone as you are just getting into business, or if you need to rebuild your business foundation, you're going to want to take the next step with us at newlaw.co/show and start the process of getting on the phone with a law business advisor who can guide you from wherever you are now to exactly where you want to go, where you can get the handholding support that you heard here on this episode. We look forward to supporting your journey to building your law practice into a business you love. I look forward to seeing you on the inside.