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That is definitely the question. Have you been 'playing' with your business? Is it viable and alive or are you still struggling after months or even years? Do you desire to finally, once-and-for-all, to see your business grow? Then this article is for you. As you read on you will discover what is holding you back, and hopefully how to move forward.
The foremost thing to do is to change your mind set. Right now, this very moment, decide to succeed! Until you do so you will be stuck in the quagmire of neglect and self-doubt.
Having a positive direction and commitment can be life changing. When you 'try' to do something you are already setting yourself up for failure. So, make a promise, not just to you; put it on paper and hang it up in a prominent place, somewhere you will see it often throughout the day. Tell your spouse, sister, brother, business partner, or anyone else who will hold you accountable. Buddy systems are great for helping to keep you on track.
Now that you have the decision made and are firmly committed to your business's success let's look at some fundamentals of entrepreneurship.
The key to any successful business is to run it like a business. Set your hours and stick to them. You'll get a lot more done and come quitting time your family and friends will be there to refresh and revive you for the next work day.
Some of us have such a strong work ethic that we forget to stop and refresh and renew for the journey ahead. While a strict work ethic is imperative you'll be no good to anyone if you allow yourself to become overly exhausted.
Another concept that must be completely ingrained into your being is that it is perfectly permissible to satisfy your clients and customers and make money at the same time! By learning how to be a better, more responsible business owner you can accomplish this and more.
While pursuing the daily tasks we often get immersed in providing our services and talents to our clients and customers. We have trouble making the shift from employee, provider, to business manager. If you never ask for fair compensation you will never get it. Your customer expects to pay, but will naturally accept over service. Don't make this critical mistake or you will find yourself discontent and overworked and your clients will come to expect what you regard as extras service as the norm.
This brings us to another valuable lesson. When the time is right don't be afraid to increase your rates. Given time and experience, knowledge and training, your skills should be increasing. So too should your rates. Go ahead. Take a deep breath and moving forward; ask for what your services are worth. I can assure you that if your customers value your service they will be happy to grow with you. Yes, you may lose one or two along the way but inevitably they probably would have moved on anyway.
In every growing business venture there comes a time to hire help. When you do so there are some tried and true ways to successfully make this change. The first rule is to keep your total payroll at or below 50% of your revenues. For example, a business with net income of $150,000 should not allow their payroll to exceed $75,000. Anything over that you should consider as coming right out of your own pocket; because it is!
Therefore, another rule in this regard is to not automatically hire new employees when you generate more business. This mistake is one that even major corporations fall victim to. When you are sure that your income is stably increased, and not just enjoying a temporary influx, then it is time to do the hiring, and not a moment sooner.
One last thought in this direction is to know your choices. Will you form a partnership; hire an employee; or a sub-contractor. Each has its merits. While a partner will be willing to share expenses as well as profits you may decide that an employee is a better choice for you and your company.
Here in the US, when you hire an employee you are required to provide wage, tax forms and accounting. This can be expensive and requires a bank account set up just to hold the 'withholding' until your quarterly payment comes due to Uncle Sam. If you aren't up to keeping sufficient records I highly suggest you hire an accountant before you hire your first employee.
The other option is to hire sub-contractors. Through the years and many businesses this has been my method of choice. While the negative is that they may come and go as they like, they also know that to make money they need to work when and where the work exists. Therefore, this has always been a non-issue for my businesses. Even when I employed doctors and nurses in my multimillion dollar surgical clinic it was never an issue. When it was time to do surgery, everybody showed up and stayed until the work was done.
The other key benefit of hiring sub-contractors is that they and not you are responsible for all taxes and record keeping. Not to speak of benefits you don't have to pay. This has been a real advantage to business owners for many years. And did I mention your relief from medical insurance and retirement plan sharing requirements for their employee counterpart.
So the takeaway here is, keep your pretax profits under control regardless of the size of your business. Follow the 50-25-25 rule. 50% of gross net to payroll, 25% overhead, and 25% profit. If you hold to these benchmark parameters, you will be assured that you are providing adequate and appropriate levels of service to your clients, keeping your payroll within a sustainable range, and pocketing a good and fair return.
PS Cartoon artwork by Ginger Marks
© Copyright 2012 Ginger Marks
Ginger Marks is the founder of the DocUmeant Family of Companies, We Make YOU Look GOOD! For more information, visit http://www.documeantdesigns.com/. Her 2012 annual edition of Holiday Marketing Guide, Your business-marketing calendar of ideas is now available at http://www.HolidayMarketingGuide.com.
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