What NOT to Do When Your Business Isn't Making Money
There are few things more stressful then when your business income tanks (or when you just started your business and aren’t making money).
While we may feel inclined to slap the panic button and take erratic courses of action, it’s best to take a deep breath and be strategic.
In this post, we’re going to explore what NOT to do when your business isn’t making money. (Curious of what you should do instead? Click here.)
Go back to school
I see many business owners conclude that the the reason they aren’t making money is because they don’t have enough credentials.
Yes, certain fields require certifications, but if you’re starting out with the base of what you need, then that’s all that you need!
I’m all for continuous improvement, but going back to school or pursuing further certifications not only costs money, it dilutes your focus and even your offer.
Once your business is rolling and you’re earning a steady income, pursuing continued education directly related to your field is fine, if you honestly believe the education gained will benefit your clients.
But if you’re pursuing education to put together an additional offer not directly related to what you do, you’re splitting your focus and potentially overwhelming your clients with too many offers.
When deciding to pursue continuing education, ask:
Will this certificate contribute to what I already offer, or will I need to come up with an entirely new offer? If your answer is the latter, think twice before signing up for the program.
Do you have enough money in your business account to pay your business bills and cover your owner’s draws for the next few months, along with the cost of the course you want to take? If the answer is no, put taking the course on hold.
Start a new business or expand your offers
Continuing on the above, if one offer doesn’t work it’s common for business owners to think they need another.
While it’s certainly a strategy (I have multiple online courses), diversifying your offers can backfire.
Think of a restaurant menu that spans multiple pages. Isn’t it more overwhelming to make a decision with a big menu than it is with a little one? This is called option paralysis, and it’s important to keep in mind when creating new offers.
When thinking of adding new offers, ask:
Will clients I’ve never worked with feel paralyzed by multiple options, or will having specific options help them determine what’s right for them (see “niching”)?
Will current clients benefit from this additional offer? (For example, if you added an intermediate option that a client who’s already been through beginner would find helpful.)
Is this new product a compliment to my other products? Can my customers use it with other products, or would buying this product inspire them to buy other products on my website?
Change your niche/target audience
Similar to the above, changing your niche confuses your clients and makes it difficult for you to establish a connection with potential clients. If you’re frequently changing your niche, you’ll be changing how you promote your offer and the language you use, making it difficult for your marketing to gain traction.
Don’t have a niche? Click here.
Take on work outside of your zone of genius (or with people you know will be difficult)
This is a tough one. If your business isn’t making money, shouldn’t you accept as much paying work as possible?
No.
You’ll resent the work and will begin resenting your business.
Whenever a new client or opportunity comes up, ask:
• If I my business were earning a steady income, would I want to work with this person or create this new offer? If the answer is no, don’t do it! (Honestly, I think it’s better to maintain your full-time job or take on a a part-time job then work outside of your zone of genius/take on less than ideal clients.)
Ok, but my business reeeally isn’t making money and I don’t have enough in my business account to float expenses. What should I do?
If you have a job, sit tight while you build up business income. Transfer some personal money into your business account to cover expenses. If you don’t have a job, consider applying for one- even just part-time.
Before quitting, make sure you have 6 months of business expenses saved in your business account (preferably from business income), along with 6 months of personal expenses saved in a personal account (from your job income). It’s also a good idea to determine what your owner’s draws will be when you leap into self-employment, and have 3-6 months of those saved in your business account.
Slow spells in business are normal, but they’re definitely scary. While we covered what not to do when business is slow, there are definitely actions you can and should take when business is slow.
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Just getting started in business and looking for a roadmap? Check out my free Begin Your Business online course. We’ll cover everything from pricing to forming an LLC, assembling your team to getting your first clients, and everything in between.
Been around the business block and looking to grow? My Self-Employed School online course provides a deep dive on topics including website SEO and design, e-newsletters, social media, public relations, and more. It all culminates in creating an easy and effective marketing strategy for your business.
