| The majority of people start their business without prior knowledge of running a business. They were trained in their own profession but school did not prep them on what it takes to operate a business. This is why I’m not surprised that every time I get started with a new client, I discover these very common mistakes: Business owners don’t pay themselves a “normal” salary It’s tough starting a business and continues to be tough until you get some steady revenue. So it’s not a surprise to me that business owners don’t pay themselves in the beginning. They become the line of credit for the business and they are the last one to get paid, if at all. While this is to be expected for most small business owners in the beginning, they get too used to this and forget that it’s not normal. So my tip here is to first recognize that the business is supposed to pay you and not the other way around. The deep realization of this will give you motivation to set goals to get your business to a place where it can afford to pay you a salary. If you are currently paying yourself, then check if it’s a “normal” salary. By this I mean, is the salary a normal rate for someone in your role? If not, then the goal should be to get yourself to normal salary as soon as possible. Business owners don’t measure their expenses against their revenue Many business owners don’t have the training to look at financials. But regardless of training, many of them don’t even want to look at it. At the very minimum, every owner should be analyzing their expenses against their sales to make sure the business is actually making money and you don’t need an accounting degree for this. I suspect it’s a bit of a denial state or a fear of reality, but no matter how long you choose to not look at the data, the numbers won’t change. In fact, if your business numbers are not doing well, not looking at it actually makes it worst. Your business can very quickly spiral down to a negative loss if you don’t pay attention to it. The sooner you deal with the situation, the sooner you can recover the business loss. Business owners don’t know that they are not profitable. This issue goes back to the fact that school only trains you to work for someone. It doesn’t teach you how to run your own business. So imagine you are put into a situation where you have to be a doctor and save lives but you had no previous schooling for that. As a business owner, you are expected to save the life of your business, yet you had no prior training so how are you to do that? If this was a life or death situation, then you fumbling around, learning and failing until you figure it out is not good enough. Yet, some owners are in that situation and it really is a life or death scenario for their business! If you do not know how to get your business from a negative loss to positive profits, then you need an expert to show you how. This could be a consultant, an advisor, or a business coach; someone who’s done it before successfully for themselves. Not only are you getting expert help, but you are shortcutting your learning time. These are very common and very critical issues and I’m bringing this to light so you don’t have to keep on failing and learning on your own. This trial and error approach takes time and the mistakes can be costly. If you find yourself in this situation, then reach out to me for a complimentary consultation. I can give you the clarity that you need to get your business out from the situation its in. |
