Do you Have a Hobby or a Real Business: 6 Key Indicators to Know the Difference
Description:
As every business owner knows, almost every business is born from a passion for “some thing” that we think we can do better on our own. The need for freedom, independence and unlimited earning potential gets the better of us and the next thing you know, you are in business for yourself.
Content:
As every business owner knows, almost every business is born from a passion for “some thing” that we think we can do better on our own. The need for freedom, independence and unlimited earning potential gets the better of us and the next thing you know, you are in business for yourself.
Most of us start our business with a very idealistic vision of what’s possible, pour hundreds of hours with very little financial return for the first few years only to realize we’ve taken a very hard road to success.
Take my client Michele PW for example. She started as a “freelancer.” She would work tirelessly, 10, 12, 14 hours a day, writing copy until she had enough money to pay her bills. Then, exhausted and burned out, she wouldn’t work again until she needed more money. Frustrated that she couldn’t break the $50k mark, she realized one day that her freelancer mindset was getting in the way of creating the level of success she really desired.
It’s at this point in the game that an opportunity surfaces. The entrepreneur must make a decision. Most of us up to this point have been playing with a hobby, thinking more like a free-lancer than someone who expects to be quite successful in business. The excitement of our craft is more interesting than all that stuff that it takes to run a business (like bookkeeping, marketing, sales, etc.) The future is unknown so we just focus on today. Profit is a mystery…so we don’t really even look at planning and revenue.
But the problem is there are certain things you MUST DO to truly create a business. The IRS considers you a hobby, and taxes you appropriately, if certain success indicators are not in place. If you don’t have these indicators in place in YOUR BUSINESS, you really don’t have a business at all…you just have a hobby.
Now it’s OK to have a hobby that you love. But if you have a hobby you must be realistic about your income potential and goals. If you have a hobby, you just won’t have the time, resources or financial capital to get past a certain point of success.
Here are a Six Successful Business Owner Indicators:
1. You operate in a business-like manner. You have an LLC or Corporation status, not a self-employed status with your bank accounts intermingled. You also have a business identify with a recognizable brand, marketing collateral and a presence in your industry.
2. Cocktail napkin drawings and random post-it notes don’t count. You take the time to create and follow a written business plan.
3. You are making a profit (or are working towards it.) This is crucial. Viability is a major distinction between a hobby and a business. Hobbies don’t have to make money. Businesses do.
4. You continue to focus on improving your business operations. A hobby is there for the sheer passion factor. A business requires you to continually assess what’s working and what’s not – and fix it.
5. You have a team. You can’t have a successful business without help. It’s impossible. If you are doing it alone, you are missing a key ingredient for profitability and long-term success.
6. You and your team continue to educate yourself on how to run a successful business. Do you have a budget set aside for education and training? Do you consciously plan not just for marketing training but real for leadership, management and fundamental business mentoring?
These are just a few of the indicators to consider if you desire a business that is positioned for consistent six and seven figure revenue. If you are someone who wants to have meaning in your life, make a difference in your community and have passion for your work, creating a business with the proper systems and infrastructure is an important investment.
Remember Michele PW? Michele joined our Platinum Mastermind group when she realized she wasn’t’ running her business properly. She realized with the right training and support, she could develop a “business owner” mindset. She’s been consistently generating high six figures ever since.
Do you see yourself ready to make this leap? Make a list of one or two Success Indicators that you commit to putting in place this year. If you need help, you know where to find it! Right here! Check out our Resources Section for proven tools and resources.
Author: Melanie Benson Strick
About Author:
About the Coach:
Melanie Benson Strick, The Entrepreneur’s Success Coach, teaches entrepreneurs how to stop feeling overwhelmed so they can create more money, more freedom and more prestige.
If you’re ready to stop working in your business and start working on your business, go to www.virtualteambuildingsecrets.com to learn the secret to growing your company to a six and seven-figure success without employees or a 90-hour work week!
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