How To Establish If You Have A Business Or An Expensive Hobby
Mar. 10 2017, Published 2:30 a.m. ET
Everyone has a hustle these days. From bloggers, event planners to business consultants and writers, everyone has some kind of “brand” that they’re touting as their business. But is your hustle a legit business or just an expensive hobby?
1. You have no idea what your real purpose is.
What motivates you to run your business? Why did you get into this business in the first place? What are the ideals that inspire you to uphold as you go about your daily functions? Through all the challenges and set-backs, there is something that keeps you motivated.
When you know the why you want to do what you do, only then will your purpose be able to shine through in your business and the impact of that will follow.
2. You haven’t incorporated or even registered as a sole proprietor.
One of the first steps in setting up your biz as legit, is registering it as an actual business. Whether you decide to go it alone as a sole proprietor or set it up as a partnership or even a corporation, structuring your business properly from the start sets the right tone for not only yourself as a business owner — but for for your clients as well.
Think about it: how can you expect your clients to take you seriously, if you don’t even take yourself seriously.
3. You don’t track your business time.
Time is not always on our side, especially as a freelancer or small business owner. That’s because we are often wearing many hats simultaneously, trying to balance keeping current clients happy while also thinking about how to grow and attract more work. But in business, if you don’t know where you are spending your time then you have no idea what you are actually getting paid.
A marketing consultant might get paid $100 for an hour session but really she spent five hours of her time on social media to get only one client for one hour. So really she got paid $100 for five hours work.
If you track your time correctly you can start to see the time-suck activities and can eliminate them by outsourcing.
4. You don’t charge people for your services or even know how to value your time.
If it’s one sticky topic for us as women, it’s that we always get queezy on the topic of money. We get even queezier when it comes to actually charging people money for our time. But if you are not making money with your business — it is just an expensive hobby.
People value what they pay for. If a person really values what you are doing for them then you should charge them otherwise they’ll value you less.
Whether you run your business as a side hustle or a full-time gig; whether it’s your passion project or how you pay the mortgage — we are all in business to make money. There, I said it. If you want to run a business, you need to charge people for your time, expertise, services or products and aim to make a profit each quarter.
5. You have no bookkeeping or accounting system.
The foundation of a solid business is record keeping and learning how to track your expenses effectively. It’s a crucial step that allows you to monitor the growth of your business, build financial statements, keep track of deductible expenses, prepare tax returns, and support what you report on your tax return.
We use FreshBooks for accounting and time tracking, and I love it so much, I can’t imagine running my small business without it.
If you have no booking or accounting system in place, then you won’t be able to assess the financial health of your business — which means you’re treating it like an expensive hobby. You’ll be screwed come tax time, and you won’t be able to spot how much is coming in and how much is going out.
6. You haven’t launched your website because you can’t figure out what font to use.
If you are still fussing about making petty decisions in your business like logos, fonts, colour schemes and which image really speaks to you — then you are missing the whole point of being in business.
I’m a marketer, so yes I know all about the importance of creative branding elements.
Branding is important in any business — but it isn’t the WHOLE thing. Instead, focus on money-making activities like providing value to your audience.
7. You don’t do any marketing activities on a regular and consistent basis.
Marketing your business is a must. In fact, you should commit to doing one single marketing activity on a regular and consistent basis.
Simple marketing activities can include publishing a blog post, sending an e-newsletter to update your clients or updating your social media accounts with news of your company.
If you are unsure of how to market your business or what marketing activities are, hire a marketing professional. Take action in your business instead of waiting for people to find you.
8. When people ask what you do, you talk about your day job.
I have been guilty about this in the past, so I know how hard it can be to get loud and proud about your business — especially if you’re doing it alongside a full-time job.
But when someone asks what you do this is your chance to start telling them about your amazing new venture! Tell them what you’re doing and let them feel your positive energy.
This piece originally appeared on The See Girl Work blog.