Bad financial planner!
I was asked to write about this 8 months ago! But I didn’t really think I was qualified since my own small business was in its infancy. And to be honest, it doesn’t pay a whole lot. I’m still working in theatre and while I will be exiting the industry come January, I don’t expect AFP to pick up that much slack in my income. It’s hard to be a financial planner in these times. People recognize they need the help but have the hardest time parting with the money to get on track. Trust me, I know every time I pay my therapist $90 for 50 minutes of her time, even though I walk out feeling refreshed and like I have a plan for a problem I definitely could not tackle on my own.
Funny, I also see my therapist about as often as my regular clients see me- 4 times a year.
Anywho, my friend Julie asked for a post about starting a small business on a budget back in January. And I’m finally ready to give you my advice and insight as I have grown this little nugget. I have it boiled down to 3 main rules that I follow myself and have found that when my business doesn’t seem to be profiting, if I get back to these rules, then it suddenly turns around.
Rule #1: Project, project, project.
If you are going to go into business for yourself, you need to project your income. Create a cash flow statement so you can figure out when you need money and how much. For example, if your day job is paying you just fine, but then in December you know you’ll have a negative cash flow (meaning you spend more money that you have and you’ll have to borrow money), then you know you need to kick up your marketing and outreach for that time to make up the difference.
I won’t lie: Cash flows are hard to build and even harder to maintain. I find myself going 4 weeks without updating mine and then I’m shocked when I have to take out a credit card. But if I had just maintained the cash flow, I would know in advance to work to find another client or additional income.
Rule #2: Make your business pay for itself.
This was the best advice I got from my initial business coach, Mari. She told me not to put anything for marketing into my business until it had made money. I recognize that there are some people who have to manufacture a widget before they can sell it, but for service oriented businesses, don’t pay for any marketing until you have made some money. How do you do that? See Step #3.
Rule #3: Be accessible.
If no one can find your inventory or know what your service is about then there is no way you can make money. Ever. Create a Facebook page, establish a website or blog (there is so much free website building software out there) and then tell all your friends. Once you’ve made some money, use that to buy whatever additional marketing materials you think you need. I didn’t get business cards until almost 6 months after AFP opened. And the only reason I did was because I was invited to a networking event that ended up getting cancelled. I have yet to hand out a business card.
Make your pricing accessible so people know what they’re getting for their money and make communicating with you easy. If you do that then you should have no problem building a business with little to no money up front.
Have you built a business from nothing? I’d love to hear about your process and how you managed to make it successful.
Also, (shameless plug alert!) I have a Small Business Package that has helped clients successfully start a business. They got enough business by the second meeting to pay for the whole package.