Thursday April 24, 2014
Home » Articles » Are you running a business or an expensive hobby?
Are you running a business or an expensive hobby?

Are you running a business or an expensive hobby?

If you don’t have a set of financial targets for your business (revenue and profit) then frankly, you have an expensive hobby. That may be tough to hear but it’s time to embrace what you have created and step up!

From research we conducted earlier this year of 300 women business owners, 68% of them are earning less now than when they had a job. I think this is such a shame. We deserve to have thriving businesses and to enjoy the benefits that brings, both financial and the feeling of doing work we love and find rewarding.

Chances are you fall into the 68%. And from the research, the majority of the women were unhappy with their earnings. Is this you? As we move towards the end of the year, we have a fantastic opportunity to take stock and to plan a brighter year for our business. I am recommending to all of my clients that they start their annual reviews now, and then they have a strong foundation upon which to build their 2013 plans.

OH!!! Was that you yawning at the thought of doing a business review and plan? Believe me, it doesn’t have to be dull! It’s essential for the business and it can be done in a way that is energetic, developmental and inspiring. Because we all need a plan that inspires us!

10 easy steps from expensive hobby to a business

Along the way, you will learn what works for your business, and start to create your goals for 2013.

Step 1: Where am I?

Before we can set off on any adventure, we need to know where we are starting from.

Time to look at the numbers! What has your revenue been for 2012 so far? What do you think will come in for the rest of the year? The easy way to work this number out is to add all your invoices together, and then add any quotes or proposals for work you have.

And how much profit have you made or not? What have you spent against your business? The easy way to calculate profit is to subtract what you have spent on the business from your total amount you have invoiced.

So now, you will have two numbers:

1. Turnover for the year

2. Profit or Loss

Step 2: How does that feel?

Now you have the numbers – what do you think? Are you surprised, happy or a little disappointed?  Whatever the numbers are let them empower you. Because once you have the facts and a foundation of where you are right now, then you know what you are moving forward from. Always think with the numbers that information is power!

Write down how you really feel about these numbers.

Step 3: What’s worked this year?

Before we start creating new plans and new ideas for the business activity, let’s review what has worked really well in the last year. Write down 10 things you have done which you know have helped generate new business for you.

Some ideas to get you started….a new website, joined a new networking group, acquired three new retailers, exhibited at a trade show etc.

Step 4: What didn’t work?

Be honest. Chances are you tried some things this year that you wish you hadn’t. But you know, business is often about experimenting and change, so at least you tried! And take the positive from these misadventures that now you have more knowledge about what doesn’t work for your business so you won’t make the same mistake again.

Write down 10 things that you know used up your precious time, energy and money that didn’t help your business grow.

Step 5: What is your dream for your business?

If someone asked you,  ”if you could have anything for your business…” what would you answer? What is that big dream for your business? When you set it up with that initial passion and enthusiasm, what did you hope to achieve?

Step 6: What could you achieve in 2013?

Now bring your thinking to December 2013. What do you want your business to achieve by then? What do you need to have done to start to really make your dream a reality.

I have written below some categories to help you make this more tangible.

  • Number of clients
  • These types of products or services
  • Markets I operate in
  • What prospects and customers think of my brand
  • What else for your business?

Step 7: Numbers for 2013

Looking at Step 1 and Step 6 – what are realistic revenue and profit targets for your business in 2013? What would make you think that this business is ‘worth it’ and that you are making the money you deserve?

Step 8: Activity to get the goals

Having goals for your business is a fantastic start to shift it from an expensive hobby to a business. Having the goals is only one part of the planning. You now need to determine how you will get those goals.

Reviewing what you wrote in Step 3 and Step 4, think about what you need to do more of in the coming year to drive your business towards those goals.  You know from Step 4 what not to do!

Also think honestly about those activities which you know you need to do but maybe you lacked the courage to do them. Maybe you were a little scared of rejection or what someone may think. Write those down! This will be your year to do those activities. Because as you grow and stretch yourself to do those things, your business will grow to!

I love writing each idea for activity on a post-it note. (You’ll see why in Step 9!)

Step 9: Line your activities up by date

Time to get into planning! Take all of your fantastic ideas from above (remember one idea on one post it note) and arrange them by the dates you will do them. The beauty of post-it note planning is that you can arrange, change and re-arrange if things don’t look right.

Step 10: Chunk it down!

Once you have done this, time to get into more detail. Do you need to break down all of the activities above into smaller, bite-size chunks? It is much easier to do an activity when we break it into the smallest piece possible.  Use more post it notes do to this…then rearrange them so they are all in order!

Ta dah!!!!!  You know have a business plan for your business! No longer is it an expensive hobby. You have financial targets and a detailed activity plan to get them!

Make the time to do the tasks, and the plan will magically come to life!

First things first though, after all that effort, reward yourself!  Take yourself out, have a cool glass of wine, treat yourself and get your nails done. Whatever it is. You have truly taken the first step to running your business…like a business! And that deserves a celebration!

 

 

Share this article if you found it useful! And leave a comment in the box below. We hope to connect with you soon.

About Wendy Kerr

Wendy is a coach, mentor and speaker. She is also a ‘Corporate Crossover’ herself – someone who left corporate life to set up her own business. Wendy has had over 18 years’ experience in senior corporate roles around the world, and for the last ten years has been working with clients to help them achieve their goals and thrive. She has worked with hundreds of business owners and a range of corporate clients globally including Expedia, ACCA, Betfair, Lexis Nexus, Pearson, The Financial Times and The Economist. She has established a name for herself as an authority on women entrepreneurs and the support they need, having a deep understanding and experience of why women leave the workplace and the highs and lows of running your own business. Wendy especially loves working with women entrepreneurs to enable them to get more focus, more control, and more income. Corporate Crossovers® offers coaching, workshops and resources for women thinking about leaving their jobs to set up their own business, or those that have already left. Visit the Corporate Crossovers website for your free e-book on “How to Make the Money You’re Worth” if you have your own business. If you are still thinking of leaving, there is a great self-assessment tool, to check how ready you are to leave your job and start up your business. Wendy also offers a free consultation for her coaching.

14 comments

  1. Great article packed with good information and advice

  2. Sue,
    This is such a good article! I am recommending this as a great read to all of my clients who are new entrepreneaurs. I completley agree that we should be making what we left within reason. I think we all have that moment where one day we wake up and realize, yeah, I am good at what I do and I do deserve to make more. When we start our own businesses we often fall into the trap of charging lower before we can prove ourselves and to entice people to hire us – but that also sends a message that we are not experts or that you can be taken advantagge of.

    • Hi Rebecca

      Thanks for your comments – it is so important that we value what we do and charge a price for our services that represents that. Though I know, from my own experience, and that of clients, that sometimes it can take a while for that confidence to grow.

      As well as suggesting the advice above, I also encourage clients to hire someone who does what they do and charges more. This then allows them to experience paying for that service and helps them understand the real value and benefit. This is turns helps their marketing and their confidence.

      Warmly,
      Wendy

  3. Dear Wendy,
    Great article and very good advice. I have found that so many people start a business without a legal plan in place and when they sell their business often money is left of the table. Advice is affordable and provided by A-V rated Attorney. I am on my way to making 2013 my best year ever which will allow me to pay it forward.
    So please keep up the great information coming, I appreciate it.
    Sincerely,
    Mary Roe

    • Hi Mary
      Thanks for your comments. You make a great pint about the legal side…something I don’t really cover. It is important though as it is all about reducing risk. And protecting ourselves from unforeseen difficulties…..that we often don’t even consider when we are in that first blush of start up enthusiasm!

      Warmly,
      Wendy

  4. I love this article! It’s brilliant. Business or expensive hobby… According to Wiki..

    HOBBY – Is a regular activity or interest that is undertaken for pleasure, done during one’s leisure time
    BUSINESS – engaged in the trade of goods, services, or both to consumers, administered to earn profit to increase the wealth of their owners

    I must admit, I would like a bit of both. I want to carry out my business because I want to and I do take great pleasure in doing it. I hope in the future it will increase my wealth hahaha

    I will definitely be carrying out the steps highlighted in the article.

    • Hi Tanya

      I love the definitions!!! Thanks!

      You are right about wanting a blend – and it is so important that we have that burning passion for our business. This is what will feed us and give us the energy for being persistent and thinking big!

      Do let me know how you get on with the steps – I’d love to know!

      Warmly,
      Wendy

  5. Great piece, Wendy.

    For me, this also brings up the old chestnut of ‘passion versus profits’. In my experience, women in particular seem to be drawn to starting a business based on something they are passionate about, rather than necessarily what’s going to make money.

    Some people do succeed in achieving both simultaneously, of course, but they seem to be few and far between from what I see. And of course, the highest profile and most successful businesspeople tend to be those whose passion is itself simply running businesses (the Dragons in the Den being cases in point).

    Everyone needs to find their own balance, I guess, and the key thing is to try and bear in mind both elements when you’re setting up a new endeavour.

    Here’s to passion AND profits, wherever possible! :-)

    • Thanks Louisa,

      Passion and profits is a great concept. I talk about doing what you love and getting paid the money you are worth.

      I believe we can do both equally and to do it well, our passion for the core business has to grow into a passion for ‘having’ a business and being profitable. What I mean is that, I am passionate about coaching and enabling women to thrive and I am also passionate about running a successful, profitable enterprise.

      I think there is an opportunity to link these together more…..and that’s my passion ;-)

      Warmly,
      Wendy

  6. Wendy … I really enjoyed reading this article. I have been developing the concept of SmartCows over the past two years and commenced marketing in July – the thought of writing a business plan filled me with dread until just now… Thank you for giving me the tools to create a really simple plan that I can work with as being a creative person the use of the post it notes is visual and fun and is something I will enjoy creating.

    • Hi Dee

      I think the best business plans are those we love to create and that we touch frequently. I have a wall of post it notes, as anyone who’s been on my Elevate course or skyped me recently will know. I love them because they bring my plans to life and make it so tangible…and it’s a gentle reminder to ‘do the work’.

      I wish you all the best for creating a business plan that brings out the best in you – combines your passion and profit and enable you to make the money you are wroth.

      I also have a free e-book on my website you can download which I think you’ll love….more tools, including one that involves matches and burning something…….all designed to help you have business success! http://www.corporatecrossovers.com

      let me know how you get on!

      Warmly,
      Wendy

  7. Hi Wendy,

    I just love your way of thinking, because I can absolutely relate to what you are saying. Actually I always considered the things I do as expensive hobbies. I even said it when I studied Architecture and had to work a lot to pay for university. I should know better then consider my work as a hobby. How demoralizing to think that of myself! It is an old social view, downplaying what we women are doing and sadly there are so many of us who still (unconsciously) believe this. Now I know, I have been part of the statistics. Thank you so much for this revelation!
    I am going to adjust my thinking NOW.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Current month ye@r day *

Notify me of followup comments via e-mail. You can also subscribe without commenting.

Scroll To Top