Today’s blog post is about a topic close to my heart. In the work I do with business owners and entrepreneurs, one of the first questions I will ask a client is “how does your business make money?” It never ceases to amaze me the mixed responses I get. Some clients will be clued in and can answer the question but the majority start talking to me about their marketing efforts and what they hope to achieve and basically everything but the answer to “how does your business make money?”
So after one of these conversations, it got me thinking….when did we start thinking that making money is bad? My passion and mission is to work with women business owners and entrepreneurs who want to make a difference. I specifically help them to bridge the gap between their passion and making their business work as a business and to do this, it needs to make money!
Yet, somehow… somewhere, some women have got the message that it is unfeminine to talk about money or that it is ‘yucky’ or worse ‘shallow’ – if I want to make money, that means I must want lots of nice shiny things (and hey, there’s nothing wrong with shiny things!)
Yet, when I meet women business owners, one of the main motivators for them being in business is not about more stuff but to enjoy a greater balance in life so they can spend time with their loved ones and do the things they love like travelling.
Does this sound like you?
But to do this, your business needs to be profitable – it needs to be generating revenue and if it’s not, then all you have is a hobby.
So, to distinguish whether you have a business or a hobby, I want you to answer the following questions:
- What is your revenue goal for 2013?
- How will you meet the revenue goal i.e. what revenue streams currently exist in your business to meet this overall aim?
- What incremental targets do you have in place to make sure you stay on track with the overall target (e.g. these could be weekly, monthly or quarterly targets)
- What percentage of your revenue will be profit? So how much will you make once all the costs of doing business have been taken out?
- When you have these basic figures down, is your business viable and is it sustainable?
We don’t start a business thinking “I’m only going to do this for the next 6 months” – no, we start businesses so we can create something of value, so we can be of service to others and we want to share our talents with the world. But let’s not forget the crucial question – how will it make money? And if that’s not something you ask on a regular basis, you have to ask yourself – is this really a business?