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I remember when I started my business in 2004. I was so excited and my only hope was that I would be able to recoup my expenses. I had set the bar pretty low and I only hoped to break even. I remember thinking that this was the expectation of all new businesses. Somewhere I had heard the belief that a small business will lose money for the first couple years, so it’s OK to break even. While it may be the norm for new businesses to first lose money, setting the GOAL at “break-even” is not a healthy goal. Nor is a goal that even makes sense.
Breaking Even Should NOT be your Profitability Goal
This is like being a baker and saying that, “Well, as long as I don’t burn the cake, then I’m OK.” That cake might taste like yuck, but this baker doesn’t care… thank god he at least did not burn it.
Begin your business with profitability in mind. You need to make money in this business. If you have “breaking even” as the goal for the first couple of years, your business model will be built on a business that cannot sustain itself. It is very difficult to change this model 2, 3, 4 years into business.
Getting Beyond Break Even
You need to create a sales plan. You need to identify pricing that matches your market, your experience, your knowledge, your trade and the value you add to the customer. You need to take into account your costs of sales and your expenses. And, you need to determine how many weddings or events you have to do in order to make a decent income. THIS number and ONLY this number should be your sales goal. If you don’t make it, well that’s OK. Reexamine your sales plan, readjust your promotional plan and try again.
Start with PROFITABILITY in mind… you business should do more that survive… your business must THRIVE.
by Michelle Loretta
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