When preparing your business plan it must include sections on how you’ll earn money as early as possible
Earn money early by developing a means to perform more work than you can do alone. People don’t open businesses to work eighteen (18) hours a day; give up the benefits they had when working; or to earn less money than they made on a job. However, if you don’t plan on how you’ll make money, it’s easy to get stuck in a situation where you may be working alone and almost killing yourself trying to make something happen.
Even if you’re an accountant, you shouldn’t look forward to coming back to your home or office to do your own accounting, financial statement analysis, market research, and other administrative chores which must be done by all businesses. A great first step is to understand you can’t earn a lot of money on yourself. Once you understand that philosophy, you must plan on what you’re willing to do and what things make the most sense to hire a professional to do for you.
These facts must become critical parts of your business plan. Because as early as possible, ideally before you open for business, you must have an idea of what your work day will look like. Make no mistake, no matter how well you plan, you’ll run into surprises. In many cases addressing those surprises may add additional tasks to your day you hadn’t planned for. And, this might cause you have to do more work than you’d planned just to earn a living.
No matter what type of profession you choose to build a company around, it will require more than just practicing your profession to make the business work
It goes without saying, you’ll need to practice the profession around which you started your business. But in addition, all companies have administrative work that must be performed like accounting, strategy development, website maintenance, tax planning and compliance. None of these things earns you a dime, but must be done for your business to operate efficiently, or at all. And, that’s just the beginning. You must market to get new clients and You must take actions to stay in constant contact with any existing clients. None of these actions pay you anything and in situations where small amounts of money may be earned on promotions, they never pay what you could have earned on hourly fees for performing the work you established the business for.
When you open any type of service business a good way to start may be to use subcontractors
Along with all the other advice we’ve tried to offer, the use of subcontractors may be the sign you’ve been looking for. However, their use will change the ideas you may have had about doing as much as you could to try to earn your small fortune alone. It may require you spend more time selling your service and less time buried under a stack of work you’ve been able to get. If you hold professional credentials, you may have convinced yourself you don’t need help. But, without it, you create a ceiling on your earnings capacity. Many people believe they can overcome this problem by dropping huge sums into getting started. I absolutely disagree with that approach.
You should be able to start your business for a few hundred dollars or no more than a few thousand. When you work alone, you may find yourself putting money into your business just to keep it open. This is one situation where you have to put your ego to the side. Your goal must be more than just making your company self sufficient. Your goal must be to earn enough to pay yourself attractive earnings, with a strategy for increasing profits often.
Subcontracting may offer you that possibility. Few people would question the reality that getting your first clients is tough. If you’re marketing properly, you’ll find some of the business you couldn’t accept was because it was outside your area. Some work may require more manpower than you could provide alone. In other cases you may have to turn down work simply because you simply couldn’t handle any more work alone. And, this is where subcontracting can make a difference for you.
Subcontracting will help get your business to do what you set it up for
Many business people believe the only way to grow or expand is to hire employees or open another location. Either of these options would require additional expenses. The last thing you need is to incur additional expense for a new business. Or, to dramatically increase expenses for an existing business, especially if it means having to pay yourself less. An even worse option would be to attempt to engage in either of these options before your company becomes profitable. In situations where you’re working alone, the business model requires the business owner do everything. Since you can’t be in two places simultaneously, either your administration, or your work that generates fees must suffer. This can lead to working long hours to get everything done. Or, the creation of an earnings ceiling, or even worse borrowing to get your business started and keep it moving.
Subcontracting will help get your business to do what you set it up for. To produce substantial earnings and to give you more free time than you’d have on a 40 hour a week job. And remember, if you’re working in the professions, you’ll seldom work just 40 hours. And if you’re working as a wage earner you likely have to work a part time job to make ends meet. So you never have much free time. To make the best use of subcontracting you must determine what strength you have that would make your business a success. Your strength could be the ability to focus on outstanding task, ensuring they get done. Some people are great at reviewing work and defining ways to make it better. Others may be able to sell successfully. Any of these skills and more can make you a great candidate to use subcontracting.
What your business plan must include to prepare for subcontracting
Having decided your strength(s), you must determine how you’ll use them. First you have to design or have designed subcontracting agreements. Many such agreements may be found online free or for very low cost. If you have a lot of money to work with, it is sometimes best to use an attorney to design your agreements. Accomplishing these tasks must be reduced to writing in your business plan. Next, you must identify several potential subcontractors you’d like to approach. No matter what your field, you’ll find most people just want to do the work. Marketing for most of them is a necessary and expensive evil. Thus, should you approach them with the possibility of bringing in additional work, most will be receptive.
Your agreements and the results of meetings with them should clearly indicate you plan to white paper their services. Meaning you’ll be representing this is the work of your company. Since they’ll receive business in excess of what they had to market for, and would not have to package the end product, they should be willing to offer you a discount on the work. This discount is what you’d earn on any work performed for you by subcontractors. You would now be getting paid just to bring in new work to them.
At the same time, you would pick out some of the higher paying work you generated and keep it for yourself. This would keep you in the loop if you plan to review the work of your subcontractors. If your strength is focusing on your outstanding tasks, you shouldn’t mind packaging your subcontractors work, in your packaging, and being able to discuss it with clients who believe this work was done by your company. If your strength is sales, I don’t think I need to tell you how well you could do. The use of subcontractors gives your company a look of depth. Though you may be initially working on your kitchen table, this can put you on a faster track to working on the board table of your successful company.