I’ve been an entrepreneur for eight years. After three years with a start-up corporation (a real office, employees and everything!) I transitioned into a lifestyle business (are these yoga pants clean?) as a copywriter.
I have not only built businesses from the ground up twice, I have spent the last five of those years in the trenches with other business owners, tweaking their sales & marketing processes via my copywriting.
It’s always a big question mark when you get started with a new business. Everyone wants to sell you something and tell you what you need to do to be successful. This is where my advice to clients gets really real. You should only listen to the folks that have achieved exactly what you want out of your life.
I’m going to give you a practical little question & answer blog, followed by a badass checklist. If you cannot answer these questions, you need to go back to the drawing board and dig a little deeper with the kind of business you truly desire.
Now, let’s go:
How much money do you need to earn per month?
A lot of coaches tell you that you’re not dreaming big enough. But you have to know where the stars are in the sky before you can reach for them. This process is sometimes referred to as Money Mapping.
Open up an Excel file or Google Sheet and document what it costs you to live. This checklist includes:
- Rent / Mortgage
- Water / Sewer
- Electric / Gas
- Food / Restaurants
- Gas / Tolls
- Car Payment
- Car Insurance
- Health Insurance
- Internet / Cable
- Entertainment
- Clothes / Misc.
As you sum up these numbers, you might be tempted to cheat by pretending you don’t spend an extra $20 / week at Starbucks. You have two options to nip your cheating in the bud: Give yourself a set amount of cash each week to play with and/or carry a notebook in order to document your spending.
You can’t afford to cheat because those little extra expenses add up over the course of a year. A $50 salon visit that you put on your credit card x 10 visits / year = $500, right? And yes, you deserve pretty toes – so just do the right thing & put your little sanity-savers in the sheet, please.
What options do you have to make this transition?
Now that we know how much money we need to pay our bills, let’s think about ways that we can make this new business transition a reality. First, how high is your number?
If you are earning a high salary in your current job, and your living expenses reflect this, you’ll probably need to keep your job and save your money for several months before you can transition to a new business venture. Despite the sensational headlines all over Facebook, six figures in six weeks is not a typical earning goal of a new business.
The decision tree looks like this:
- How many months worth of income do I have saved?
- Based on expenses, how much do I need to save?
- Do I need to continue working until I can lower costs?
- Can I take a part-time job to supplement my income?
- How many clients do I need to meet these bills? (To follow)
The reason most small businesses fail is because they under-estimate their expenses. When your bills are higher than the amount of money that you bring into the business, you’ll dig yourself deeper & deeper into debt, until your options are so limited you’re forced to say sayonara to your dreams. Nobody wants that.
Who will you sell your services to and how?
As you begin to plan your strategy to achieve your income goals, you’ll also want to consider what you’ll sell. If you are a yoga instructor, there is only so much you can charge per class based on what everyone else in your area is charging. This concept is known as Market Value.
While there is typically a scale of prices for most services, to be at the top of your game, you need to be aware of what the competition is doing and how you’ll do it differently. You can be the best, the cheapest, or the first.
You’ll need to consider (yup, another checklist!):
- An add-on or special service so that you can increase your fees
- The number of hours you need to work based on your pricing
- What’s unique about your concept versus the competition
- Creative concepts you can build in to provide more value
Next, it’s time for you to take a closer look at the HOW associated with your new business. Since this is the essence of your marketing plan, don’t expect to know this right away. As many of my new business clients quickly learn, you can create the best online products in the world, but if you don’t have an audience to sell them to, you won’t earn a dime.
Switch to a clean sheet in Excel and begin to map out the marketing methods (the how) you’ll use to promote your business. Remember to make sure they are methods you enjoy. If you hate the way you look on camera, don’t attempt video marketing just yet. Stick to 3-5 things you can do consistently.
- Social Media
- Email Marketing
- Blogging
- Networking
- Conferences
- Speaking Gigs
Each of your ideas will break down into more specific plans, but this is the gist of your new business overview. Think about one more thing: Is there a community you are currently plugged into that you can easily sell your services to?
Maybe you’ve been training in kung-fu for 10 years. This group of people would represent potential buyers if you are able to offer them the right service. Developing an offer they want to buy makes your how a lot easier.
What do you want the next 5 years to look like for you?
Obviously, based on the above, you will need to earn enough money to pay your bills. Once you’re standing on solid financial ground, though, you are allowed to expand into the other things you’d like your income to do for you. What other goals do you have for yourself over the next five years?
Think about a few realistic accomplishments that are important to you. You’ll want to base these on numeric goals, which means using numbers to support what you write on this list. Don’t be afraid of those numbers. Until you have a complete picture of how money ties into your happiness, you can’t understand how hard you have to work.
Once you see your dreams on a spreadsheet, you just might realize that you’d prefer to take a different direction so that you can work less hours, etc. You should choose a 5 year plan that will help you be fulfilled and feel 100% accomplished if you are able to achieve them:
- Paying off the mortgage in 3 years
- Buying a new car in 4 years (or 5)
- Saving $5,500 / year for retirement
- Investing in a rental property ($30K downpayment)
- Traveling to Central Europe in 2018 ($3,300 x 2ppl)
How Does Your New Business Feel?
What we accomplished here was very simple: we laid out the reality of your business. When you know what your income goals are, you can begin to build your ideal business from the inside out. If everything added up for you (and you know you’re ready to get started) here are a few final action steps:
- Open a bank account for your business. To simplify your life, place all the money you earn in this account and pay all your business expenses out of this account. Keeping your business finances separate from your personal finances makes accounting easier.
- Develop an online presence. You don’t have to pay for a website right away (though I recommend buying the domain name and at least putting up a placeholder 3-page website). Create a Facebook page and several other online accounts to give a real feel to your new company.
- Attend a few networking events. Start to talk about what you do to others. Assess how this feels to you. Do enough events that it feels natural for you to discuss your company, “I’m a sales copywriter and coach. I help people learn to profit from their passions.” Repeat 100x.
And just so you know…I’m really proud of you. We were all new to this business stuff once. Taking the first step is the hardest. I’m so happy you got there!