110: Creating A Profitable Side Hustle Whether You Are Starting A Business Or Side Hustle
110: Creating A Profitable Side Hustle Whether You Are Starting A Business Or Side Hustle, A Solopreneur, Entrepreneur, Mompreneur, Freelancer, Bookkeeper, Virtual Assistant, Business Owner, Or Self-Employed
When you start your business or side hustle, your goal is more than likely to become successful. But what makes your business a success? Do you think that bringing in considerable amounts of sales or revenues determines your business’s success? Is it the number of clients or customers you have? It’s easy to listen to other business owners talk about how successful their business is, but how often do they talk about their profit? The bottom line when you are talking about the success of your business is whether or not you are able to make a profit. Whatever your reason for going into business or starting a side hustle, you’ll need to make sure that you make a profit, and you’ll need to sustain that profit to continue to run your business. When you have a side hustle, you want to make sure that you are creating a profitable side hustle so that you know the additional time you are putting into your business is worth it. There are only a few ways that you can truly increase the profits in your business, and I’m covering them in today’s podcast episode so that you can increase the profits in your business. Most are pretty simple, but if overlooked or not on your radar, you could see issues in your cash flow over time. Whether you are starting a business or side hustle, you’re a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA, listen in and make sure that you are taking advantage of everything you can in your business so that you can not only create a profitable business but also keep more of the money you are making in your own pocket and ultimately have the financial lifestyle you want. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
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Show Notes:
When you start your business or side hustle, your goal is more than likely to become successful. But what makes your business a success? Do you think that bringing in considerable amounts of sales or revenues determines your business’s success? Is it the number of clients or customers you have? It’s easy to listen to other business owners talk about how successful their business is, but how often do they talk about their profit? The bottom line when you are talking about the success of your business is whether or not you are able to make a profit. Whatever your reason for going into business or starting a side hustle, you’ll need to make sure that you make a profit, and you’ll need to sustain that profit to continue to run your business. When you have a side hustle, you want to make sure that you are creating a profitable side hustle so that you know the additional time you are putting into your business is worth it. There are only a few ways that you can truly increase the profits in your business, and I’m covering them in today’s podcast episode so that you can increase the profits in your business. Most are pretty simple, but if overlooked or not on your radar, you could see issues in your cash flow over time. Whether you are starting a business or side hustle, you’re a self-employed individual, a solopreneur, entrepreneur, mompreneur, freelancer, small business owner, a remote, virtual, online, or in-house bookkeeper, or a virtual assistant or VA, listen in and make sure that you are taking advantage of everything you can in your business so that you can not only create a profitable business but also keep more of the money you are making in your own pocket and ultimately have the financial lifestyle you want. These tips are essential whether you are using a computerized software system like QuickBooks, Xero, Wave, or FreshBooks for your business finances; or doing your bookkeeping manually with an Excel spreadsheet or even a Google Document…
Welcome Back…Continuing in this side hustle series, today I am covering what you can do to create a profitable side hustle or business. The first thing I want to talk about is the financial information you have about your business. To be able to see how profitable your business or side hustle is, the first step you need to do is to make sure that you have your books up to date so that you can rely on your financial information. You need to know where your business sits financially. I see many business owners run their businesses throughout the year with no idea of what their profits or losses are for their business until the end of the year. Without this information throughout the year, it is pretty hard to make good decisions. Imagine if you were taking a road trip, and you didn’t have a map or were unable to use Google maps to get you to where you wanted to go. Chances are you might get there eventually, but if you were able to rely on a map, you would surely get there quicker. The same holds true for your bookkeeping and financial statements. You need to make sure you have your bookkeeping up to date so that you can review your financial statements and make changes as you go. Understanding your financial statements is the second step to helping you make sure you are running your business and generating the highest profits possible. When you really start diving into what your financial statements are telling you about your business, you can easily make changes whenever necessary. If you don’t know how much money you are currently making or spending, you won’t know if any changes you make are increasing or decreasing your profits.
Today, we are going to focus on the profit and loss report for your business or side hustle. This is where you will see if your business or side hustle is profitable. Simply put, your profit and loss report or your income statement shows you your total revenues or the money you receive for sales or services, less your expenses like supplies, office expenses, marketing, utilities, or rent. A positive number represents your profit or net income, and a negative number would be the loss you are incurring. When you look at your profit and loss report, if your sales would stay the same and you lowered your expenses, this amount would go straight to your bottom line and increase your profit. The same is true for your costs or expenses. If they stay the same and you increase your sales or revenues, you will also see this impact on your bottom line or your net income or profit. It can take years for some businesses to show a profit, but often smaller businesses or side hustles can show a profit earlier, especially if they make smart decisions to increase that bottom line or profit. Higher profits allow you to have more cash flow in your business as well as funds to pay yourself as the business owner.
Once you have your financial information compiled into your profit and loss report or income statement, take some time to really look at each and every line and get familiar with what is causing these numbers. Know exactly what is making up your revenues or sales. Having a considerable amount of revenue can be great, but how successful are you if you are not keeping that money in your business? You’ve probably heard of people making six or seven figures. This typically refers to their sales or revenues. What you are not hearing is how profitable they are. There are businesses out there that have high revenues, but their expenses are just as big or even bigger and cause low profits or even losses. When they are unable to turn these revenues into a profit, they may not be able to stay in business for long. This is what I help my clients with in the Mastering Your Small Business Finances PROFIT LAB. Each business owner is able to generate their financial statements and dive deep into understanding what their financial statements mean about their business so that they can ensure they are as profitable as possible. Understanding the difference between sales or revenues and profit is something that can be confusing for business owners at first, but I promise that the more you examine how your business is doing by reviewing your financial statements, the easier it will get.
So, how can you increase your sales or revenues so that you can increase your profits? One way is to make sure that you are pricing your products or services to be profitable. Many business owners started their businesses with low prices to bring in business, get a sale or gain experience. They then have a more challenging time raising prices. If your pricing is not allowing you to have a profitable business, it is time to evaluate where your pricing should be so that you can be profitable and create a plan to increase your prices while maintaining the value for your customers. You want to be profitable and charge what you are worth, and you need to make sure you are pricing your products or services so that you can cover your expenses and be profitable. If you are undercharging and not covering your expenses, there will be no way you can be profitable with these prices. Be aware of your profitability when you are offering discounts as well so that you are not generating a loss. There is no way you will generate a profit if you consistently show a loss with your products or services, even with additional sales. This is extremely important to recognize so that you can make any necessary changes as early as possible in your business. It is also helpful for you to know which products or services you offer are the most profitable. If you find items that are not profitable or generate a low profit, you may want to reevaluate these as well. Once you know you have your pricing under control, you can set goals to increase the sales on your most profitable products or services. I am going to challenge you to create a strategy to increase your sales or revenues over the next few months. Are you able to increase the leads you are generating or possibly increase the conversion rate of those leads? Consider changing your pricing structure to improve sales or retention with current customers or clients with recurring sales or by utilizing subscriptions, deposits, loyalty incentives, or retainers. You could also add an upsell or bundle to increase the total customer transaction.
Acquiring a new customer costs money, which leads me into the second half of increasing your profits by analyzing each of your expenses, so you know where your hard-earned money is going. Can you reduce the money you are spending on acquiring customers or clients? Track your performance on your marketing efforts and evaluate what is bringing in new customers and what is not working as well so you know what needs to change to produce better results. Make sure you are asking for referrals from your customers, clients, or others in your network to keep your costs down. When you are looking at cutting costs to increase your profitability, look at everything you are spending your money on, and if you are not getting any value from it or you are not using it, it may be time to cut those costs. Take advantage of negotiating with your vendors to reduce your expenses, and don’t add expenses just because you can afford it or you have the money. Make sure that you know exactly how your expenses will help your overall goal of growing your business. It’s okay to spend money on expenses when you know they are going to help you generate sales and create a profit.
One more item I want to touch on is time since most side hustle businesses are solopreneurs. This can be a significant expense that doesn’t necessarily show up on your profit and loss or income statement if you aren’t paying yourself as an employee. Even though there is no dollar amount attached to your time, it is still valuable. Watch where and how you are spending all of the time you devote to your side hustle or business. What could you do to improve the amount of time you are spending on tasks that will ultimately add value to your business? Try to streamline your processes whenever necessary and consider outsourcing any non-essential functions to free up your time so that you can utilize it to grow your business and avoid having to hire employees.
Making or generating more sales may not be the answer if you are not profitable to begin with. You need a good understanding of your business finances so that every action you take in your business generates the results you want. When you are running your business in the dark and don’t know if you are profitable or how much profit you are generating, it is hard to make the right business decisions. I want to make sure that you have everything you need to create a profitable side hustle or business. When I work with my clients, they have their bookkeeping up to date, understand their financial statements, and are able to see exactly how profitable their business or side hustle is. We work together to see their best options for generating additional sales, as well as where they could cut back on expenses or utilize the best solutions for their business. They can see the possibilities they have to create a successful and profitable business. They ask questions that are holding them back and get answers when they need them. Whether you are looking to start a side hustle or are already making money with your side hustle, I’d love for you to have these results and experience the same benefits when you work with me. You can either sign up for a consultation session with me by going to www.FinancialAdventure.com and clicking on the work with me button to schedule a call or if you are ready to make sure that your side hustle is profitable for you, join us in the Mastering Your Small Business Finances PROFIT LAB. If you have a side hustle or are a solopreneur and you are struggling with getting your business started, growing your business, and generating revenues, you need to join us in the PROFIT LAB. In the PROFIT LAB, I help you ensure your side hustle is more profitable so that you can keep that additional money in your pocket. We help you make decisions, generate revenues, and create a life you can enjoy. I walk you through not only understanding the profitability of your side hustle but also how you can create offers and increase your sales. By taking control of your business finances, you can create the profitable side hustle you are striving for and meet the side hustle goals you’ve set to achieve. We prioritize and work on the essential tasks in your business, help you make decisions, and generate revenue while creating a work-life balance you can enjoy! Where you are right now in your side hustle journey is the perfect place for you to join us, and if you are ready to start, don’t let thoughts about the perfect offer, confusion about your pricing, or the fact that you are still working for an employer stop you. So, are you ready to join us? Of course you are. By taking action in your business, you’ll be sure to achieve your goals. Join us today by going to www.FinancialAdventure.com/profit. Generating revenue and increasing profits requires you to have the right mindset and accountability so that you get results. This is what we do inside the Mastering Your Small Business Finances PROFIT LAB, and it’s perfect for you if you are a solopreneur or have a side hustle, and you’re ready to be more profitable in your business. As a CPA, Business Strategist, and Coach, I help business owners just like you who know it’s time to do something different because what you’ve been doing in the past isn’t getting you the results you want. We’ll make sure you understand your business finances, your next steps and follow through with the vision you have for your business so that you can truly enjoy your business.
And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you need some accountability, join our PRIVATE Facebook community and post your action item, we’d love to support you.
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