Being in business can be tough. You may be doing work that excites you and fulfills your passion, but income fluctuates, markets change, and your customers’ and clients’ needs may evolve as well. One of the most unmotivating circumstances for an entrepreneur owner to be in is when they feel like their business isn’t generating enough income.
If you feel like you’re not making enough money or if you’ve been stuck at a particular income level for a few years, there could be several reasons
1. You Don’t Have a Specific Income Goal
Going into business without a goal is like going to college for 5 years without a major. Not much is going to get accomplished. It’s best to take your business idea and create structure and a strategy before carrying it out.
You want to set goals for your services, products, growth, and also for your income. Setting income goals is fun because it challenges you to get results and make your business profitable.
It’s also a great way to stay accountable especially when you tell people what your goal is. For example, if you’re a business owner who wants to break the six-figure threshold, you can break down your goal into quarters or months.
If you want to break 6 figures this year, that means you need to earn at least $8,333.33 per month on average. From there, you can figure out how to earn that money and what type of dedication and work ethic you’ll need.
2. You’re Not Tracking Income and Expenses Properly
It’s common to think about serving your audience and making money but a responsible business owner does admin and organizational tasks as well.
It’s so important to track your income and expenses regularly so you can have a record of your progress and highlight any areas you may need to change.
For example, if income is fluctuating quite a bit and you’re experiencing a slow season, you’ll want to determine when that is each year and what you can do to increase your income around that time.
3. Your Expenses Are Too High
Tracking your income and expenses should also expose whether your expenses are too high. As entrepreneurs, we often welcome the idea of investing in our business.
I know people who are eager and willing to through money on courses, tools and programs, software, coaches and consultants, assistants etc.
There’s nothing wrong with investing in your business. But you have to watch your return. If your investment isn’t providing you with a solid return, you want to ditch it ASAP.
Every course, assistant, tool, you invest in, should be providing you with a value that matches or exceeds your investment. If you let expenses take over your business budget, you won’t have much profit left for yourself at the end of the day.
4. You’re Not Pricing For Profit
This is probably the most common reason why your business may not be making enough money. I’ve talked about pricing for profit before, and it’s one of the best things you can do to ensure you don’t become a broke business owner.
Sometimes when you’re self-employed you forget the fact that there’s no one available to give you a raise. In turn, you must create your own raises and charge what you’re worth.
If your business isn’t making enough money, start by assessing your prices to determine if you’re charging enough. Also, find a way to add more value to your products and services to justify the price increase.
Business owners tend to give up as a result of dwindling profits due to some of the reasons mentioned above. You don’t want to settle for low earnings if you’re an entrepreneur.
Start getting organized, tracking your expenses and income, and pricing for profit.