Successfully Projecting Costs and Sourcing Funds For Your Mom Biz – Part 1
In all the mompreneur bliss hype, the pundits leave out an important component .
They overlook the elephant in the living room that no one talks about. Some mompreneurs experience shame about the topic, like you should already know how to do this since everyone else does. Or it’s whispered under breath so no one stops their excited momentum to mom business ownership land.
So what’s the clandestine topic?
It’s the truth about funding a business.
Many pretend there are no costs involved, or that the entry point is so low everyone’s able to absorb them.
Any enduring business needs resources—time and money—to start and carry it through the early years. Some business owners will need funding again for future expansion.
ACCURATE RISK ASSESSMENT
You need to select or, for existing business owners, possibly reevaluate the different business options before you can start projecting costs and finding funds. Your comfort with risk combined with pickiness about the work you will do, leads you to the best fit. Once you have a concept in mind, you can play with the numbers.
Here are samples of businesses to consider or add to what you already offer:
- Direct Sales –Provides a lower level of financial entry, an established business model, and a track record for you to review before signing up. Sell a product you love and believe in and associate with a company with good compensation. Before signing, view the pay structure. Compare to at least two other direct selling companies before selecting the best one.
- Franchise Business – A franchise will have a much higher initial investment level. However, you will benefit from all the systems being in place. You should be able to study or even visit the structure and financial results of comparable franchise owners in other locales. This gives you a good picture of your business can look like and what exactly you would be doing in it.
- Creating Your Own Business – Designing your own business or ministry from the ground floor can offer the greatest personal fulfilment. You design your role. However, when you create your own business model there can be many flaws. The lessons can be expensive and painful. But with wisdom and perseverance, you could have your dream business.
New and existing mompreneurs must discern well.
You must do the numbers, calculate their estimated investment along with the payoff potential. Many mompreneurs underestimate their time involvement in their enterprises. They either devote less time than necessary and don’t reap the benefits of the high payoff activities they don’t have time to do. Or they get burned out devoting more time than they want to give, and find the “freedom” of being a mom business owner elusive.
A imperfect estimate of your money and time is better than no estimate at all.
The more you investigate prior to starting the business, the energy you spend educating yourself on how the marketplace works, and the investment you make in good mentors will give you the most realistic picture of how your business will work. But there still will be unexpected expenses.
MATCHING COSTS WITH FUNDING
Moving forward with some model or evaluating your own should allow you to calculate your monthly and annual business expenses and your projected revenue.
Construct a possible sales cycle to figure out when you likely will have your first sales. In an existing business you too must determine the length and steps needed in your sales cycle, so you ensure you have enough prospects in the pike to get you close or to exceed your estimated goals.
If the expenses are higher than the revenues, you must analyze why.
- If you have a new business, you may need time to set up products and services first and then follow your sales cycle process until you close new customers. Your job is to estimate how long that will take. That is the number you will need to have funded.
- If you are in a relatively new but existing business, determine your shortfall. Identify ways to cut expenses or increase revenues. Understand the reasons for the shortfalls. Perhaps, you are not spending enough time marketing. Or maybe you lack a key skill that you need to make your business successful. Or maybe you’ve missed a core business fundaments – customers that are not interested in your products, flawed service delivery system, customers who can’t afford your products— in which case you are wise to troubleshoot with a professional before moving forward.
The shortfall amount that can be attributed to normal start-up costs and processes or the gradual building up of a clientele in a viable business concept with good potential is the amount you will seek funding for.
Funding a business doesn’t need to cause night sweats. Your financial investment shows your commitment to your enterprise.
In my next blog, we’ll discuss the various funding options you can consider.
The Catholic Mompreneur’s Biz and Life Tips: The more time you spend looking honestly at your potential business idea or existing business, the easier it will be to make course corrections, get the funding you need to move forward, and be very happy with your mom biz choices. Spend 20 minutes evaluating your idea or existing business.