Are You Making This Mistake With Your Small Business?
Okay, I am a little ashamed to admit this but I made one of the biggest mistakes that most small business owners make. The thing that bugs me even more about making this mistake is that in business school this is taught almost day one and I still did it. Well, lucky for me I decided to start working with a business coach to help me through some of the struggles I am facing with my business. More on that later, but have I got your curiosity to see if you are making that mistake in your small business? Alright, I won’t keep you waiting any longer. The biggest mistake most small business owners make is that when it comes to figuring out their Break Even Analysis they forget to include into the fixed costs section a line item that has the owner’s salary!
Yes, you heard me correct. Most small business owners when starting out figure that as long as they calcualte and cover all the fixed costs, which typically include things like rent, operations, marketing, employee payroll, etc. that the business can survive and they are making it. Well, after going back and seeing that for the past year all my calculations have been based entirely on just having enough members of my Working Mom Workouts site to cover all the fixed costs minus a salary for me has made me realize that my entire marketing and advertising strategy needs to change. Once I added in a monthly salary for me the number of clients I ned to have paying me a monthly subscription has gone up 2-3x of what I originally projected. So, let me ask you again, “Are you making this mistake in your small business?” If so, don’t beat yourself up over it, in a follow up post to this one I am going to show you how easy it is to calculate your Break Even Analysis with your salary in it, so that you have a true picture of what it takes to have a successful business!
To your success,