We are not talking about profit here, but there is probably a problem in your business model if you are laying out much more than you have identified as income.
Maybe it’s time to look at your business closely:
- What are you paying for?
- Is it set-up costs?
Even when the scale of difference between income and expenditure is not as high as ten-fold, it is possible that your finances are not as efficient as they could be.
A good business plan will help you sort this out. We can’t stress how vital a business plan is to the backbone of any enterprise. Setting up as a business without a business plan is a lot like going ice skating without ice skates!
Your outgoings in this phase of your business might be legitimate costs. However, they could also be compensating for market research which would have identified something you are now paying for. Something which could have been avoided if it had been done better planning before promoting your services and products.
At the point where you recognise that there’s much more going out than you have commitment for (written contracts, agreements, deposits, etc.) it is a good idea to stop and take stock of what you actually have. Sometimes asking someone who know little about your business can help you be more objective. Are you running an expensive hobby instead of sustainable business?
Maybe your current business organisation isn’t best for your business? Perhaps it’s time to form a partnership with someone who is more expert or has better access to the areas you’re spending most on?
Spending money to gain business isn’t always fatal; haemorrhaging money is. If you are in this position continue with FREE LUNCH insights this week and follow @ideasgenius on Twitter.