❓Three questions for business life (any stage)💼
Entry #63 on things I wish I'd known when starting out in business
I got my tax bill in the mail on Wednesday. It’s bittersweet to pay so much tax - it means business has been good, but it means saying goodbye to eye-watering sums over the next year. It baffles me how provisional tax (projected for 2022-23) is due before terminal tax (accurate for 2021-22), but hey, it all washes up in the end.
I thought it might be fitting to answer an old AMA from a reader this week. She asked,
“New small business. Where to start? Three key ideas.”
I feel equipped to answer. Women approach me on occasion to sound out the realities of business life, contracting or pursuing a non-salaried idea further. I’ve been self-employed for nearly seven years now and I just became a Waikato Business Mentor. I must know some stuff.
I haven’t got three key ideas, but I will share three key questions to ask yourself.
If faced with courage and truth, these questions might just help you out.
Photo by Pixabay.
Do I know my numbers?
By this I mean, do you know the basic numbers that govern your lifestyle and existence? Your income minus your expenses. That kind of stuff. Do you know what it costs to live your current life? Do you know where your money goes each month?
If not, start the process to understand your own money movements in much more detail. There are easy free-to-use budget templates in Excel and Google sheets. If they are confusing and you’re not sure how to start, there are budgeting advisory services both online and in-person. Or try a book from the library.
If you can’t give a detailed answer to this question, do not proceed until you can. Understanding money and the earnings goal you need to hit in business is kind of crucial to the rest of the endeavour. We had a landscaping business before we had children and, honestly, we had (and created) problems. Our financial knowledge was like a tender new shoot about to be eaten by a possum. And so we got gobbled up.
With kids and a mortgage in tow, we would never repeat that particular journey again. Know your numbers.
Why do I want to do this?
I only realised AFTER I had started a business of my own that there needs to be a horizon or a goal. Someone smarter helped me see this. A business or a venture needs to have purpose, you need to know the point.
Are you trying to build a generational legacy business for your family? Will your children be invited to participate and take it on?
Are you building a successful business that you can sell to a new owner, so your exit leaves you on a high and with profit in the bank?
Are you trying to create space and flexibility in your life? Do you want autonomy? Time up your sleeve? The right to say yes, or no?
Are you keen to shoot for the big bucks? Scale something into the stratosphere and sit in the Director’s chair with your financial future secure and planned out?
Are you wanting to work alone, or with a team? Why?
If you don’t know any of these answers, sit with yourself. My current single person business model is modelled off the wise words of Linda Hutchings who once said to me, ‘the aim of the game is dollars up, days down’. As we age, we want to work less and yet our value has deepened and grown to a stage where our fee reflects this maturity. My business will not be viable for sale, I am my business. When I stop, it stops. This is good to know.
Will it sell?
I have 3,400 ideas a week. I enjoy ideation, I enjoy coming up with products (I dream of a good-based business one day) and improvements on existing services. I will likely never action any of my ideas, but if I did - I would have to answer this question. What I do now, sells. I benefit from consistent work and a reputable name in my sandpit. To be honest, I play it pretty safe.
‘Build it and they will come’ is talk from the locker room of the boys’ club. I don’t play that way, I got bills to pay and risks to manage carefully.
Test things, research, gauge the market, profile your customer, ask around, do due diligence, get help.
Leap when confident you have wings. Don’t wait forever, but be careful.
If you find out your idea is just a passion, not a viable product or service - don’t stress, this is normal discovery. Give yourself a high five, you’ve saved yourself from pain. If you still can’t stop thinking about your idea, re-examine everything in a few months’ time. Look at it from a few angles.
Let me know if these questions are helpful. As always, I look forward to hearing what you heard, saw and felt when reading this.
THIS! Ive been meaning to write for a while - sometimes your messages arrive in my inbox at precisely the right time with a wonderful message that I just needed to hear on that Friday - thank you - loving your musings and the thoughts you are sharing with us x
Thanks Michelle. Such insightful words 💗