Building a Revenue Generating Business

Building a Revenue Generating Business

Creating a Revenue Generating Business

Let’s get one thing clear, there are lots of different kinds of businesses. There are huge corporations owned by many people and propelled by a board of directors, there are mid-sized businesses, franchises, service based, online, lifestyle, sole proprietors, partnerships just to list a few. And some businesses in all of these categories make money, some make a lot of money and others in all categories lose money. If you are ready to start or morph your business into a revenue generating business consider the following:

Elements of a Revenue Generating Business

1. They Make Money. Revenue generating businesses have the potential to make a great sum of money. My personal definition of a great sum is anything from $500,000- $1,000,000+ in gross annual sales. When you own a business with that level of revenue you have options. Options to hire a staff, options to have a nice office, work on product development and create an organization that has a life of its own.

2. Good Price Point. In my experience, a revenue generating business is created when you are able to sell a product or service for over $500 and you are able to sell it in large quantities. You’d need a thousand customers to get to your $500,000 but it’s doable. High purchase price and the correct volume of customers make it workable.

3. Recurring Revenue. Your business works best when you are able to establish recurring revenue, meaning your customer makes a purchase that is planned to be made again each month. An example of this is a subscription program. When signing a customer up the intention is to have them as a customer each month for typically a year, or more. This recurring revenue allows for the development of new customers while maintaining your current base of customers.

4. Scalable. The idea of scalability is that you as the business owner aren’t having to do all of the work to get a sale. When you have to “touch” each customer or sell them personally you aren’t able to scale because you only have so many hours in a day. This limits your ability to make higher sales in your business. It also chains you to your company. Ideally, you are setting up a business that has the ability to run in your absence for extended periods of time as you pursue other interests and passions. Google defines scalability as a characteristic of a system, model or function that describes its capability to cope and perform under an increased or expanding workload. A system that scales well will be able to maintain or even increase its level of performance or efficiency when tested by larger operational demands.

5. Sellable. Is the business you own or are starting sellable? If so you can begin with an exit strategy from the start. Keep in mind that businesses are saleable when there’s something to be bought. Ask yourself this question, if I leave my business can it continue without me? If the answer is no, then your business can’t be bought. If the answer is yes, you may be able to find a buyer. Another consideration is the foundation of the product you are selling. If you have a loyal customer base that isn’t attached to you as the owner, but instead is loyal to the product it doesn’t matter who owns the business and this makes it attractive to a buyer.

6. Keep Cost of Goods and Expenses Low. The key to any business isn’t how much money you get, but how much you keep. If your profit margin is 80 percent, it will be difficult to gain traction. After having owned several businesses my mantra is keep expenses as low as possible. Each year examine all expenses and see if you are able to get rid of them or lower them. Request new quotes each year on things such as insurance, telephone and internet service and any other recurring monthly expense. Next, make sure you are keeping your cost of goods as low as possible while still maintaining the integrity of the product. Make sure you are considering your profit margin when adding expenses. Just because something costs $100 doesn’t mean you need to bring in $100 to cover that expense. You need to bring in more to compensate for expenses. Use this as your guide post.

Be diligent and aware of your money. It is your job as the business owner to be aware of money in your business. You need to know how much you have coming in and how much you have going out. Checking your bank account to make sure there’s money in the account doesn’t qualify as doing your best to manage your money. It is your responsibility to the company and to the yourself to be aware of financial goals and work to achieve them.

If you own a business and you’d like it to produce more revenue consider these factors. It’s possible that your business can be transformed, or perhaps you might need to build something different in order to achieve your goals. Be real with yourself. Are you interested in building a business bigger than what you have, or are you happy with the size of your company? Not all business owners need to build an “organization.” Be real about who you are and follow the path to that alignment.

Starting a Lifestyle Business

Starting a Lifestyle Business

Google defines lifestyle business as: a business set up and run by its founders primarily with the aim of sustaining a particular level of income and no more; or to provide a foundation from which to enjoy a particular lifestyle.

We hear this term, lifestyle business used frequently with people who own or wish to own businesses. The idea of having a lifestyle business feels so appealing. Own a business and with it will come, freedom, flexibility and income. Leaving the clutches of a 9-5 job has the allure of providing so much. However, making that dream a reality is much harder than is often presented.

Over the course of the past year and a half on the heels of selling a large company I was able to create a lifestyle business. This business met all the marks. It was flexible, allowed for freedom from a 9-5 and provided the time I wanted with my children. It also provide income. While bringing in less than half I’d been accustomed to making as an owner in my prior company, it still provided income and that filled the gap that we needed in our finances. Here’s how I created my lifestyle business:

I found a need.

Finding a need that partners well with a your skill sets is the most important element in creating a lifestyle business. If you aren’t able to identify a need you won’t be able to sell your product. Where some people get hung up is falsely believing they must be the first to market to succeed. I disagree with this assessment. You don’t need to be the only one offering your product or service or even be the best, you merely need to be doing a great job filling a need.

Partner with someone who has an established customer base.

When I started my lifestyle business, I wanted it to be just that, a lifestyle. I needed to find another business that was able to provide leads to me for the growth of my company. Finding this person cut out time and money spent on marketing as well as the need for infrastructure. I didn’t need to create a big business I just needed to find the people who wanted my service. I did pay handsomely for the leads I received, but because my greatest goal was gaining the largest return with minimal effort this was the way to go.

Low overhead was key.

I didn’t have an office and I used an old computer (that I’m still using) that works great. I didn’t spend a ton on equipment, business cards, a website, or anything for that matter. I kept my overhead to almost zero with the exception of the price I paid for the partnership that was providing the leads. This allowed me to keep most of the money I made.

I got out what I put in.

Some weeks I’d work really hard and get a lot of leads and sales calls made. Other weeks I would make no sales calls. When I worked hard, I got good results. When I wanted to spend more time with my family, take a trip or just wasn’t in the mood I’d skimp on my efforts and the result was lower sales. Understanding that you are the person in a lifestyle business that allows you to either succeed or fail is very important. When you are your business everything you do can have an impact on your bottom line.

After a year and a half, I’ve learned a lot about what it means to have a lifestyle business. Having the unique perspective of owning a brick and mortar business, an online business, MLM businesses and other companies as well as a lifestyle business has allowed me to see the good in all businesses and the struggles in all businesses. Every business type has it’s ups and it’s downs. However, after owning a lifestyle business I’ve decided that it’s not for me. I’m an all in kinda gal. I want more to sink my teeth into and that’s why in my next post I’m going to talk about growing a revenue generating business!

The Power of Change

The Power of Change

Change can be hard. Some people hate change. Others say they love change. Change comes in many different forms. A change of physical location, a change of the people surrounding you, a change of your major money strategies such as job or business, and then there’s the change of life- aging. Life is always changing. I’ve always said that I liked change and yet I’ve lived within the same 100 mile region my entire life. I’ve experienced job change, marriage change, the change of having children and I’ve experienced the change of starting and selling businesses.

In 2014 I made a big change, I sold a company that I’d started and owned for nearly ten years. The company was a trade show production company that I owned with my best friend and had dearly loved. So what changed? What brought me from the place of loving the company to choosing to sell the company and move on?

First, the company had grown into its own. When you start a business it’s generally all you. As the business owner YOU are the company. I was fortunate to have started the business with my best friend so it wasn’t just me, but the two of us. However, it was still the two of us. We did it all. We created the product, sold the product, marketed the product. We managed the money, took care of taxes, figured out insurance and our corporate status. We did it all. And then we hired employees and those employees left and we hired different employees and those left and we hired yet again until we reached a place where we had a good team and understood how to hire and keep employees, how to motivate and manage. When I sold the company I knew it had come unto its own. We had a sales manager and an event manager who had been with the company and are to this day. We had a good sales team and a marketing manager. We didn’t have to do it all anymore. I knew that if I left the company it would continue on.

I was tapped out. The creative juices that had once swelled for this company were dwindling. The fire that had burned, the passion and excitement were gone. It had become a job. I didn’t feel I was doing my best to be the leader I longed to be. I was tapped out. I had gone to my well for inspiration and excitement so many times that I felt it was now depleted. I didn’t feel that I had any great concepts or ideas that would have positive influence on the trajectory of the business.

I realized selling the company was an option. When starting a company there is always the hope that selling your business will be possible, but many are unable to sell their companies. I realized that what we’d built was sellable. I realized I had options. To that point I felt that I was forever chained to the company and truthfully had been happy with that bond. However, when I realized I could, I did.

I was ready for a change. Businesses go through cycles as do people and the business had gone through a cycle and I was ready for a change. I was ready to spend my days thinking of new things. I was ready for a different obsession.

The people in my life changed; my mother passed away. And in that moment everything changed for me. Life will of course be forever different on earth, but my passion and zeal for life and the business was gone. I needed a break from the consuming tasks of business ownership. I needed space to reflect on life and needed a new path. I had to break the path I’d been on in order to start a fresh. I needed a fresh new look at life. The company needed me to sell. It needed me to move on to new opportunities. I had given it my all and there was no more to give.

This past weekend, I visited a trade show that was held by the company I sold. I was a bit concerned that I would have feelings of regret, or that I would see the trade shows weren’t being run as well as they should be run. However, what I found was just the opposite. The trade show looked fabulous. It was well put together, organized, beautiful and even better than when I sold the company. And as a founder isn’t that what you want to see? Don’t you want to see that what you started is continuing on? I was so happy. And regret? There was no regret. I didn’t have a longing to be back in control or in charge. I was simply happy that it was all doing so well!

Navigating the Challenges of Social Media

Why are you on Facebook? Why do you post on Instagram? Did you watch the Iowa Caucus on Twitter? Why? These are questions I’m faced with this week. I have to admit I love social media. I run into people from time to time who say, “Oh, I hate Facebook. I don’t do social media.” And I do respect their perspective, but I am not one of those people. A friend recently posted that she’d taken a hiatus from Facebook and loved it. I had to ask myself, why she had returned. Did she really love it, then why had she returned. I’ve many, many times seen people post their last farewell on Facebook. It’s, been good, it’s been real, but it hasn’t be real good so I’m gone. And yet, they return.

I have to confess I’m a hot mess when it comes to social media. I’ve tried and I’ve tried to figure out a “strategy.” To post only weekly as so many advice and then just check back quickly to respond, but really, are these people being truthful when they say they just do quick check ins? How exactly? My quick check ins are usually the 2 hour type. I’m a social media time filler. Not sure what to do next, or have a spare moment, or don’t want to think about what’s really happening, and boom I’m on Facebook. When I’ve looked through all Facebook has to offer I just to Instagram and when Instagram is just a carbon copy of the posts on Facebook (why is this not spoken of????) then I just to Twitter. As soon as I land on Twitter I instantly become overwhelmed, realize there’s no one I’m going to capture this beast and move on to Pinterest. After 10 minutes on Pinterest and after I realize the picture is way cuter than any of the post to actually execute any of the projects and head back to Facebook and the vicious circle continues.

As you might have guessed, this “strategy” isn’t really working for me. Go figure! So I’ve come up with a new plan and I want to share it now.

The first thing I had to ask myself is why am I on social media. Here’s what I came up with.

Connection-I want to meet people and engage with them. I’ve met some really wonderful people online. My life wouldn’t be the same or have nearly as many opportunities if I weren’t online a lot. I love that.

My friends and family are on these social sites and I love being able to connect with them even if I can’t see them on a regular bases.

Resources- I find some of the most amazing recommendations for business on social media. If I have a question, or need a hand, or advice. You name it, I can find it by turning to my (sorry for the very overused word) Tribe. They got my back.

Poised as an Expert– You are most likely reading this blog post because you found me through a social platform. I love business and I have a lot to offer the world. It’s my job to share that knowledge and expertise. It’s important for me to post things that people care

Next, I’ve set goals for my social media behavior. No more randomly jumping on because I’m bored or tired or don’t have a plan. I’m going to spend 1 hour a day or focused time doing what I want to do online- connecting, finding resources and helping others.

Do you have a plan? Have you ever thought about your social media behavior? Share it with me. I’m very curious.

How to Start a Business

Starting businesses is half the fun of being an entrepreneur.

In my business life I’ve had the pleasure to start six and I’m working on a seventh. As I go through the process of start up I thought it would be beneficial for me to share my process.

Step One: The idea.

I talk to people all the time who say, “I want to start a business, but I don’t know what kind of company to start.” This can be a challenge and while I’ve provided formulaic approaches to this hurdle in the past.. I wanted to share with you how the process works for me. I’ve found that when immersed in an industry/community for long enough you will see the areas of need. For example my husband and I started our haircutting business because we’d wait on average an hour to get my son and husband’s haircut. We looked around and said, if you have to wait an hour to get your haircut at every place cutting hair there must be a demand for this service. And there was. We opened our haircutting business and it’s grow every year for 9 years. I started my trade show production company because I was working for an interior designer who wanted to reach potential customers by exhibiting at a Home and Garden Expo and there were no Expos in our area. My trade show production company went on to produce seven events annually. There was a need and we were able to fill that need. Typically, I’ve found that business ideas come from being really aware and listening to people who surround you. If you don’t feel like you are able to develop ideas try this exercise. Next time you’re anywhere, a store, a party, the park, online observe problems people have and think to yourself how could I solve that problem? If you ask yourself that question often enough you’ll come up with a great business idea.

Step Two: Be open to learning.

Don’t worry about whether or not you can execute this idea just yet. When you’ve got an idea, it’s not about execution it’s about feeling the idea out. My opinion is, you can always learn something new. When my husband and I started our haircutting business neither of us cut hair. We weren’t licensed cosmetologists (and still aren’t). We didn’t need to be, we hired employees to do the cutting. We learned the industry and now are well versed in it, but we didn’t know anything to start. If you are able to make the commitment to learn new things you will have much greater success as an entrepreneur.

Step Three: Consider its value.

Next, I think through the actual concept at a deeper level. How would I execute this? What would I need to do to start the business? Whose help would I need? How much money would I need to get started and how much income generation would be possible? What would the actual tasks be that I’d be doing? How would I market the business and get customers? Who else is doing this type of business? Is it a growing industry or a flat industry? How many hours will I need to work to get this business off the ground and once established how many hours will it require to keep going? How will I be better, or what will be different in my offering from my competitors? Then I sit back and say, does this really stack up? Can I really do this? Do I want to do this? Why do I want to do this? If doors open and opportunities continue to present themselves and the answers to these questions are positive then I move forward. If they aren’t positive I stop there and move on to my next idea.

Next, I think through the actual concept at a deeper level. How would I execute this? What would I need to do to start the business? Whose help would I need? How much money would I need to get started and how much income generation would be possible? What would the actual tasks be that I’d be doing? How would I market the business and get customers? Who else is doing this type of business? Is it a growing industry or a flat industry? How many hours will I need to work to get this business off the ground and once established how many hours will it require to keep going? How will I be better, or what will be different in my offering from my competitors? Then I sit back and say, does this really stack up? Can I really do this? Do I want to do this? Why do I want to do this? If doors open and opportunities continue to present themselves and the answers to these questions are positive then I move forward. If they aren’t positive I stop there and move on to my next idea.

Step Four: Write a business plan.

If you talk to ten entrepreneurs you’ll get ten different answers about whether or not you should write a business plan. I talk extensively about business plans and why I think you should create one here . For me a business plan is a time to reflect, research, and gain the knowledge and structure you must have to move forward.

Step Five: Analyze the financials.

Do you have a financial projection? Do you have the funds you need to start your business. In five out of six of our startups we’ve self-financed the project. The haircutting business, because it was brick and mortar store required an SBA Loan (Small Business Administration). This loan was critical to the opening of that business. If we had been able to secure a loan we wouldn’t have been able to open the business. When looking at finances you want to look at how much it will cost to start the business (and always figure it will be about 10% more than you think), how much it will cost to keep the business running and how much and when will the business start producing income for you. In this step you also have to look at your personal finances. If you don’t have the money you need personally to keep your household running without a consistent paycheck (or with no paycheck at all) how will you live.

Step Six: Secure and/or develop the product.

If it’s a physical product you must actually acquire, create or design the product. However, if it is a service you can start selling right away. In either case, the quicker you start selling your product/service the better off you are. This sales process will help you with proof of concept. Are people actually interested in this product? Is the price point set correctly? Are your sales projections going to be correct? Having this knowledge as soon as possible is important for developing a strong foundation and thriving company.

Step Seven: Sell your product.

When the money starts to flow you know you’ve got a business! Maintaining and growing that business is your next order of business.

Steps to Start a Business:

  • Develop an Idea
  • Be open to learning
  • Consider its Value
  • Write a Business Plan
  • Analyze the Finances
  • Develop your product
  • Sell your Product

Expressing Creativity Through Business

I’ve always been a creative person. Since I was a child I was draw to the arts. I wanted to be a painter or a ballerina or an actress when I grew up. Singing in church performances was a highlight of my year and by the time I made it to high school the latest school theatre production consumed by life. And then reality hit as it always does. “Real” work, and marriage, children and house payments and my dreams of being an artist flew away. Creativity wasn’t welcomed and so I thought it had left, for I no longer classified myself as an artist.

Fast forward to today and my thoughts are consumed with my creativity or lack thereof. As I’ve had the pleasure to coach emerging entrepreneurs these words have often crossed my lips, “Creating a business is the ultimate expression of creativity.” And isn’t it? I’ve realized over the course of the last few months that my life has been devoid of any creativity for about 19 years, with the exception of business. I’d like to make the assertion that if you are a creative person (which we all are at some level), but if you are a person who lives for creativity your creativity is going to find an outlet. Your inner wheels are going to turn and yern and all that you touch will be laced with the spirit of creativeness. And that is what has happened to me. I haven’t acted on a stage in years, I haven’t been at a mic to sing since before I stopped acting and I only occasionally pick up a paint brush. This creative spirit that dwells in me has escaped through this new passion I’ve devoted my life to and that passion is business.

As I thought through what that meant, to be a creator though business I had to wonder, was this something others were talking about? Admittedly, Elizabeth Gilbert’s Big Magic has played a role in my thinking and if you have not read this book and feel in any way your creative spirit is being stifled please get a copy and learn to tune into the creative magic that resides within, but beside that point I was curious do people actually think of themselves as artists when they create a business? Do you think of business owners as artists?

It seems to me that business owners, shareholders and the like are always challenging the members of their organizations to be more creative. And yet true creativity is not what they honestly want. Rather they mean to say, can you think of a better, faster, cheaper way to make the company money? While I fully respect the desire and impetus to make a profit I would not put that in the category of artistic expression. Artistic or creative expression comes from a deeper place. I place where you are the keeper, the holder of the idea and the executer as well. You are the person who has the vision and that vision is so strong within you, you can’t keep that idea hidden, you must express the concept. I think frequently the reason businesses don’t succeed (among many, many other reasons) is that they simply do not have creative inspiration. Start ups don’t view themselves as creatives they view themselves as capitalists. From my perspective capitalism should be celebrated, but it is distinctly different from creative inspiration.

I’m ready to recapture my creativity. I’m ready to acknowledge that I have creativity that needs focus and that the very act of acknowledging my abandoned creativity will allow me to once again focus on the creative being I’ve always longed to be. I’m ready for a new title and that title is Business Artist. Everything excites me about business, but mostly I’m excited by the adventure of waking up at 3:00 AM with a business concepts that will blow all else away. A business concept that will help so many and most of all help me to express myself.

If you would like to access your creative spirit and become a Business Artist here are some things you can do:

  • Be honest with yourself and embrace your creative power.
  • Harness your creative power AKA do something about it. When you have an idea don’t just let it linger, take action!!!
  • Be okay if you win or lose realizing it’s about expression
  • Do something that pushes you out of your comfort zone
  • Dare to be yourself and express your own opinions and individuality
  • Learn something new
  • Go out of your way to meet new people and have new experiences
  • Every day, do something that you enjoy doing

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