NEW YEAR'S REVOLUTIONWritten by C.J.Hayden
No, that's not a typo in title. Resolutions are easy; most of us make them at least once a year. A revolution, on other hand, is something you may not have made since you started your business. Starting a business is actually quite revolutionary. When you began yours, there were probably many details of your life that changed. Some of those changes were intentional, others accidental; some you liked, some you didn't. Other changes you always meant to make just never happened. Is your business everything you meant it to be? Is it giving you all that you wanted? Are you satisfied, even delighted with way your life as a business owner is turning out? If not, perhaps it's time to make a revolution. Here are some revolutionary ideas you might consider: 1. Serve only those clients you care about and enjoy being with. When you work with people you don't enjoy, everything becomes a struggle. Your clients are a key part of your business. You wouldn't hire someone you didn't enjoy working with, so why let them hire you? Begin today to let go of clients you find difficult to work with, and start seeking out those you really had in mind when you started this business. Have courage to refuse new clients that don't fit your picture of who you most want your business to serve. 2. Make a plan to reach your income goals. Unless you are independently wealthy, your business not only needs to support you, it needs to provide for your future. Setting goals for your desired income level is a good first step, but to reach those goals, you need a plan. Create a financial model for your business. How many clients, appointments, billable hours, or contracts will it take to generate income you want? How much of your time will be required to do that amount of work and do marketing required to get it? How much money will it cost you in overhead, marketing costs, and admin help? Does model work? 3. Take enough time for yourself and those you love. The number one reason entrepreneurs name for going into business is time -- more to spend with their families, more flexibility in work hours, or simply more control over how their time is spent. But how many of us actually get this?
| | LACK OF BUSINESS ISN'T ALWAYS THE PROBLEM Written by C.J.Hayden
When you're just starting out in business, it's a safe bet that you need more clients. But what if you have been up and running for a while, and you're still not making as much money as you would like? You may be in habit of thinking that attracting new clients is answer, but this isn't always case. There are many reasons why a professional services business might not be earning enough, but they typically fall into four categories: not enough revenue, not enough profit, not enough customers, or not enough time. Start by looking at your gross revenue -- total amount your customers pay you over course of a year. How does it compare to others in same line of business? Ask some trusted colleagues or check with your professional association for any statistics they may have. What percentage of your gross revenue remains after you cover cost of sales? This is your gross profit. As a service business, you may have no cost of sales. If, however, you are selling books, tapes or software, or accepting credit cards, your inventory cost and credit card fees need to be deducted from your earnings before making other calculations. Now deduct your business expenses from your gross profit. What percentage of gross profit remains? Is this a typical percentage for your industry? If you can't gather comparable data from colleagues, your professional association, or a published source like Dun & Bradstreet's "Industry Norms & Key Business Ratios," compare your profit margin (net income divided by gross profit) to a desired goal of 70%. LOW REVENUE - If your gross revenue seems low for your industry, your profit margin is at least 70%, and you have about as many customers as you can comfortably serve, concentrate on increasing your revenue, rather than trying to improve your profit margin or bring in new customers. Consider raising your rates, which may mean finding a market that is willing to pay more. Look for customers who will give you higher dollar volume contracts or place larger orders. Think about hiring more administrative help, which would free up more of your time to charge out at professional rates. You should also work to increase your passive income by selling products created by you or others, reselling some of your existing work, or licensing a process you have developed.
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