What to do When your Business isn't Making Money

 Welcome back to the world of financial empowerment, where we dive into the depths of business numbers with a touch of femininity and a dash of fun.

In case you don't already know me, I'm Lucy Starbuck, your guide through the world of small business finance. I'm all about empowering female entrepreneurs (like you) to thrive in the world of business.

In this article, we're going to talk about what to do if you feel like your business is not making money. This is a topic that comes up for me time and time again, particularly with small business owners and entrepreneurs. I often hear phrases like, "I would do that, but my business just isn't making any money" or "things are a bit tight at the moment", so I want to provide some mindset shifts as well as practical tips to use for those of you who resonate with this.

Mindset

The most important thing to address first is the mindset piece. When you say your business isn't making money, what do you actually mean? It can be quite a flippant thing to say, but it's important we really understand what's happening. Here's what could actually be happening:

• You think you're not making any money but actually you just aren't doing basic bookkeeping. So maybe you've checked the bank account and there isn't what you'd like there to be, but you don't actually know what your income and expenses are.
• The business is performing and making a profit, but you'd like the profit to be higher than what it is.
• You're in the beginner stage of business where it's not generating any revenue yet.

Whether you are unsure, loss-making, or profit-making but not as high profits as you expected, I want to remind you that you have a functional business that has generated revenue. If you've been in business for a while, it can be easy to forget the magic that is creating a product and achieving a sale from people who wanted to buy something from you. 

This is a totally different vibe to being an employee who earns the same salary each month.

This is my reminder to you to celebrate the income that you are still generating. When we sit in the energy of gratitude we can vibrate at a higher vibration which allows us to attract more of what we desire towards us.

If you're sitting there feeling "oh I only made $5000 this month" money isn't going to come and play with you. You need to change that mindset from "I only made $5000 this month" to "I am so grateful for the money I've earned and can't wait to make more".

So please remember every time you are bringing any money into your business, it is worth celebrating because it just means somebody somewhere wants to give you money for the thing that you have created.

When You're at a Loss

However, I am also a realist, right? There may be some of you who have done the tracking and the bookkeeping and know now that your business is loss-making. The first thing to know is that making a loss can be okay, especially if you're new to business. At the start, it's normal to expect that we'll be spending more in the business than we're earning. The key here is to have a plan for when you're going to start turning a profit.

The issue is when we are consistently making surprise losses because we will eventually run out of cash and won't be able to fund our business. So, what do we do if this is the case? The good news is that there are strategies and tactics to implement so that you can increase your profit margin and start generating more cash into your business

1. Treat your business, like a business.

The first step is to work out what you actually want. So often we have a "business" but we're actually treating it like a hobby or a side hustle, expecting it to perform like a business. A hobby is something we do in our spare time that we enjoy creatively, but it's not really expected to drive a profit margin. If that's what you're after, great! But I'm guessing if you're here that you want to make good money from your business. If that's correct, I'm going to get real with you…

2. Split your personal and business accounts

A big sign that you have either a business or a side hustle that you're treating like a hobby is that you mix your personal and business expenses together. An absolute non-negotiable is having a separate business bank account so that your personal and business expenses do not mix together. If I see anyone mixing their personal and business expenses together, this screams hobby vibes and hobbies are not designed to make delicious profit margins.

3. Track your business expenses

I know, no one really wants to see how much money they are spending on the business because it doesn't feel nice. But it is so important to see how much you've spent on your business so that you can determine when you're actually starting to make a profit. Tracking your expenses from day one is one of the biggest flexes because it helps you see exactly when the business turns from loss-making to profit-making.

I track all of my expenses and my income, and I did so even when I wasn't bringing any income in, because that is a normal stage of business. I just want everyone to be okay with that. If you're at the stage in business where you are consistently spending with little profit, then I think having an Excel spreadsheet is perfectly fine.

As part of my digital course, The Finance Fix, I have a perfectly awesome bookkeeping template that actually converts all of your numbers into your first ever profit and loss as well. You can download this here.

4. Know your profit number

What profit do you need your business to make? Is it a hobby profit, which is minimal? Is it side hustle profit, which has to be intentionally determined because you don't want to burn out? Or is it business level profit where you need to pay yourself?

If your business is your sole income, then you need to be intentional about owning that and taking radical responsibility for the fact you need to earn a certain amount of money per month to live (and thrive!). Start by working backwards, how many sales do you need to make, and how many expenses are you allowed to spend to be able to draw that much money from the business?

Make sure you're covering your personal costs first and then make a plan to grow your profit to actually feel really abundant and spacious, rather than scarce and lack-minded.

Bonus Activity

Take some time today to journal about exactly what you are feeling if you're feeling slightly constricted when it comes to money in your business. Take some time to write down maybe five or ten things to do with money that you are grateful for in your business.

Final Thoughts

• Remove "not making money" from your business vocabulary. You're either in your loss-making era with plans to move out of it, in a startup phase of your business with plans to generate revenue, or you now are eyes wide open and actually track your business income and expenses, while learning to read your profit and loss to make smart decisions.
• The ability to celebrate the revenue that you are bringing in is critical. We need to be feeling that element of gratitude for the money that we are bringing in and even the money that we are spending in our business.
• Seek support from someone that can help you create a plan to help you understand what your numbers are telling you.
• You are the business owner, you are ultimately responsible for making sure this business does turn a profit and makes you the profit that you need it to make.
• If you're looking for a simple and easy way to track your income and expenses don't forget to check out my digital course, The Finance Fix.