“When are you going to get a real job?” “What are you up to now?” “Oh is it one of those pyramid things?”
Many home based entrepreneurs will tell you that they have heard at least one or more of the above phrases from so-called family and friends. Part of the reason home businesses have a reputation that they aren’t real businesses is because some home business owners treat their venture more like a hobby than like a business.
Longevity rates of home businesses are low because so many of them don’t make a profit. Eventually the owners will come to the realization, or a spouse will be painfully aware, that they are spending more than they are earning. Many home business owners are more concerned with being home than they are with actually running a business.
How do you keep your home business profitable?
The best way to keep your business profitable is to RYBLAB – Run Your Business Like a Business. Whether you’re home based or you go into an office, success is contingent upon you viewing your business as a business – a real business. If you treat it lightly and don’t take profits seriously, then is it realistic to expect to be profitable?
If you don’t have any business education or experience, then take a course or pick up a book on basic accounting. Many home business owners start out wearing all the hats – marketing, operations, and accounting. You’ll need some basic bookkeeping skills.
You must keep accurate records of how much you are spending and how much you are bringing in. Don’t guess, and don’t periodically take a look at your numbers. Review your I/E report (income and expense) report regularly – at least weekly. Keeping accurate records is time consuming. You need to save receipts and you need to keep a spreadsheet or other tracking software.
When you see all you are spending on paper and in some cases, how little you are earning, you will think twice before you invest in expenditures that you think you need. You may find that what you perceived as a necessity is actually a want or a nice to have. Phil Crosby, who was a businessman and author who contributed to management theory and quality management practices said, “Eliminating what is not wanted or needed is profitable in itself.”
There are many steps involved in managing a profitable business. Before you can implement strategies and countermeasures you need to know your current situation. Once you have a clearly defined financial road map then you can make educated decisions keep you in the black.
If you can’t measure it, you can’t manage it.
About the Author: Laurie Ayers is a WAHM from Michigan and a Superstar Director with Scentsy Flameless Candles. She enjoys helping others start and maintain a candle business in the US, Canada, Puerto Rico, Deutschland and the UK. You can find Laurie at https://www.ThrivingCandleBusiness.com.