[powerpress]
Ouch. That line. Hobby or business. Perhaps a friend or spouse has brought up this distinction and you get furious! Businesses take time to grow. Many businesses take two years to be profitable. I know, I know.
I don’t think your profit margin is what makes your business a business and not a hobby. What makes the difference is the respect that you give your business.
Let’s talk about hobbies for a minute. My hobby is ice hockey. It’s Friday night, and Charlie watches the kids. My world does not revolve around hockey though. If I can’t play and need to take 3 years off because it’s too much, I don’t play. It’s a boat load of money and the best part is the socializing with my team and doing something that’s for myself. Even this hobby takes 4 hours out of my week when you include travel time and the time I’m wide awake from the adrenaline at 2am.
There are a few key areas you will want to look at when it comes to running your business as a business.
1. Time scheduled to work
2. Performance management
3. Profit and loss
I understand these are not sexy parts of the business. I hate them too! These are the things though that keep your business from looking like a hobby.
1. Your schedule
Are you doing your business in the nooks and crannies of your day? Are you choosing nap time? And when your spouse is home, obviously that’s the time to spend with him! If this is true for you, your business might be a hobby.
I’d like to encourage you to have a set schedule for when you work. And call it work. Also, don’t be in denial. Based on my work with my 1-on-1 clients, trying to work during nap time just doesn’t work. Nap-times go to hell just as often as they work really well. And then what? For my kids, they always seem to wake up and want to be held for the duration of their nap. And I’m finished on my productivity and cranky at everyone because of it. However, shame on me. I should know better after the second time that happens.
One of my clients was attempting this approach until she hit a crossroads. She worked with her husband for Monday night, Thursday nights, and Saturday mornings. Although she was home with her kids during the day, she needed to give them attention. So we just called it what it was. She had more appointments that week than she did the prior four weeks just by establishing a consistent schedule for her family. Her husband knew it was his time to shine, and the kids knew to wait until 8pm.
I challenge you to sit down for a few minutes and make a schedule. Keep it the same each week. If you don’t have an appointment and you wanted to, use that time for calls. My client that I just mentioned works from 5-8 on the evenings she works. She tries to schedule a 6pm appointment. When she doesn’t, she doesn’t call it quits and feel sorry for herself. She reaches out to people from 6-8 that night and puts in that full 3 hours worth of work. And that’s simply how she made it happen. She also lined up three babysitters in the neighborhood to have on stand-by when her husband travels for work. She was tired of seeing dips in her business during those times, working her tail off after to recover, only to meet a dip again when he left.
2. Performance management
Are you doing well? How do you know? Are you progressing towards your overall goal? How do you know?
Many of the people I chat with talk about their goals as their next rank in their company. That’s cool and an admirable goal. Often it doesn’t happen in a month. This means you have to work towards it over six months. I don’t want you to think that if you don’t hit a new rank each month you aren’t progressing. Every business has key performance indicators that determine the health of the business. Just like when you go to the doctor and no matter what they take your temperature, weight, and blood pressure, your business has vitals as well.
For network marketing, here are very simple metrics to track on a monthly basis.
1. Personal sales
2. Repeating revenue
3. # of people I have had an appointment with
4. # of people choosing to run their own business
5. Profit- we will get to that one next
You don’t need to obsess about these every day. In fact, I recommend you don’t. Perhaps get a snapshot each week to see how it’s tracking and then really look at them at the end of the month. Set a goal, work towards it, and then learn from what went well and what didn’t go well. This will ensure that your business will grow.
3. Profit and loss
Are you getting a return on your investment? I know you know you need to invest in your business. I invest in mine. Keep in mind that there are a lot of cool things out there. Also businesses are supposed to make money after six months to a year. You have to track this.
The best gift you can give your business, other than hiring a knowledgable coach, is to do a profit and loss each month. The first key here is to make sure you set up a bank account just for your business. I use Quickbooks self-employed and it’s so easy I could have even done this with pregnant brain. It imports your info from your bank account and once a week you can go in and pick the category. Done. Five minutes per week. If that.
Why is this so important? This drives your behavior. There a a few areas that I mentioned earlier that can be the performance metrics you measure. Each of those lead to different streams of income in your business. Also don’t forget some of the cash items you can sell really easily. Don’t think of how much things cost you, think about how much it’s worth to your customers. One of your customers need a quick fix and won’t have time for the order to come in? Instead of giving them a sample, sell them the same thing for a few bucks. These things add up, especially when you are new and your customers are glad to pay for it. As a customer, it causes me less guilt. Yesterday I needed some essential oils that I had run out of, and didn’t have time to wait for the shipment. I knew my friend would give it to me for free, but I don’t need that kind of guilt! Take my $5 please!
Quickbooks Self-Employed is $9.99 per month. I do have a referral code for 50% off your first 6 months if you want to use that, here it is. I think they give me a gift card or something out of full-disclosure. But you get the discount so who cares, right?
Ok so those are the three areas to focus on if you think your business is crossing the line into hobby. Make a schedule, track performance indicators monthly, and keep a monthly profit and loss. Leaders, insist that the people you mentor do the same. For their good, not yours. If you were to pick just one thing from this episode to implement, it would definitely be the profit and loss. Looking at that every month will drive the other two areas I discussed today.
Thanks for checking out this week’s episode. I hope you are having a great week and I look forward to chatting again next week.
Tasha