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!