If you ask most entrepreneurs why they decided to start their business, you’ll likely get a whole host of answers that range from wanting to make an impact on the world, needing more freedom and flexibility, and doing work they’re passionate about.
If you dig a little deeper, you’ll get to another answer… to make money.
And if you dig a bit more, you’ll find that many entrepreneurs aren’t making the money in their businesses that they anticipated. This is incredibly demoralizing, especially when you know you’re working hard, probably harder than you’ve ever worked in your life, and not seeing the results you really want or feel like you deserve.
What’s at the root of this? Here are 4 reasons your business might not be making money.
You Don’t Have A Specific Financial Goal
Going into business without a financial goal is like trying to get to a specific destination without really knowing where it is. Driving where the road takes you might make for a fun and free-spirited adventure, but that carefree spirit doesn’t work when it comes to generating revenue in your business.
Financial goals serve as your business’s roadmap. They provide perspective on where you are at any given time and allow you to make important decisions. You can think of it like your business’s very own version of Google Maps. Before you take action, you plug in your goals, you determine the best path to get you to your goal, and as you’re cruising along, alerts pop up to let you know when you need to make a detour in order to get to your destination.
If your goal is to break the six-figure threshold, a goal that nearly 90% of female entrepreneurs never meet, you can then break that into quarterly, monthly, and even weekly goals. That means, if your target revenue for the year is $100,000, you need to earn at least $8,333.33 per month. When you have that level of specificity, you can develop a solid plan to get you there and have a clear understanding of how much time, energy, and effort you’ll need.
Your Business Model Doesn’t Align With Your Financial Goals
Your business model is simply the way in which your business makes money. Too often, though, clients will have great financial goals but no realistic way to meet them.
Take Jane and her web-design business. She wanted to generate $80,000 in revenue. But when we broke down how much time was required to complete a standard project, what her other responsibilities were, and the pricing strategy she was using, there was no feasible way she could do that, even if she worked 24/7.
In order for your business to meet its revenue goals, you have to have a business model that works. In fact, most businesses don’t rely on a single dollars-for-hours income stream. They have multiples ways to generate income, many of which are passive and semi-passive.
As you develop your financial goals, take a hard look at the way in which you plan to get there. Will the service model you’ve created get you to the goal? Tweaking this one thing could be an absolute game-changer for your business.
Your Client Attraction System Isn’t Working
Businesses don’t grow without clients. This may seem like the most obvious statement, but if you don’t have a consistent and reliable way to attract new people to your business, it will die.
Getting clients, at its most basic, requires “meeting” as many people as you can that fit the description of your ideal client, telling them what you do, and making offers to help them. The more consistently you meet new prospective clients, engage them such that they want to keep learning more about what you do and how you can help them, and then nurturing that relationship, the easier it is to sell your product or service.
More often than not, though, business owners aren’t consistently visible, they don’t connect with prospective clients in a way that makes them believe they can solve the problem the client is facing, and they don’t make offers to help them. This is hands down the number one challenge entrepreneurs will say when asked about their biggest struggle. It’s also the part of the business where you can get mired down in all the hows, what ifs, and the tech.
Here’s what you need to hear: The how can take a lot of different forms, but it’s actually not the important part of this. It’s your willingness to show up, be visible, and to do so consistently.
You Don’t Believe in Yourself, Your Product, or Clients
The first three reasons speak to some of the more foundational aspects of building a successful business, but this reason speaks to something much deeper: belief.
In order to show up, to put yourself out there, you have to believe that you know what you’re talking about and how to help the client you’re talking to. You have to believe that your product or service will close the gap for the client. You have to believe that it is absolutely needed. And you have to believe that there are people who need what you have to offer… and that they want it from you.
Belief is rooted deep inside you. I think of it as a deep knowing, an unwavering confidence that what you’re trying to create in the world is of utmost importance. If, for example, you had the cure for cancer, you would be shouting it from the mountaintops. You would literally tell every person you came in contact with. You would show up, even when it was hard, and even if people thought you were crazy because you KNOW that your cure is needed. That it could save a person’s life.
Your product or service is the cure to someone’s cancer, and until you believe in yourself, your product, and that there are people out there that need it, your business will not make money. Period.
Business owners tend to give up when the money isn’t flowing – and it’s disheartening to be sure – but don’t walk away from your big dream.
Take a hard look at your financial goals. If you don’t have some, set some. And make sure they’re S.M.A.R.T. Specific. Measurable. Attainable. Relevant. Time based.
Evaluate your business model. Will it allow you to meet your financial goals? If not, change it.
Show up. Be visible. Stay consistent.
Believe that you’ve got exactly what someone needs. Because you do. They’re waiting for you show up with the cure to their cancer.
If you’re not making the kind of money you thought you would when you started your business, if you’re frustrated and tired and mired down in all the what ifs and hows, then join us inside The Smart Girl Collaborative. We’ll dive into your business, help you figure out which of these 4 reasons (or something else) is getting in your way, and help you build a plan to fix it.