By Rasheda Khatun Khan - Wealth & Wellness Expert & Spiritual Kinesiology Practitioner. Rasheda is the Founder of Design Your Life Ltd, a Debt Panelist at The National and the author of Millionaire Mindset - 6 Steps To A Wealthy Life. To find out more about Rasheda's work, get in touch at email@example.com and follow @rasheda_khatun on Instagram.
2 minute read
It’s a new day, it’s a new dawn, it’s a new life for me and I’m feeling gooooood! It is indeed Michael Buble and 2020 can be exactly that. A new year, a new decade. Time to set up your next 10 years.
If this is the year you have decided to take that leap to go out on your own and set up a new business then read on as you will find some important steps to take into consideration before you take the plunge!
Setting up a business is both super exciting and super daunting at the same time. Especially if you are pursuing something that you have a passion for. You get emotionally charged and have every faith that this could work as a business and, if pursued with strategy, there is every chance that it could.
So here is the first thing: once you have decided to set up a business, your number one priority should be to make a profit. If it is not, then don’t give up your day job - keep a secure income and pursue your passion as a hobby. It's best to keep passion and securing your income as two separate things. Better still, if you are currently employed, prepare, plan and set up your business before you quit your job. Start creating a flow of income and once you feel secure in your business model, then make your move. Whatever your situation, it’s important to prepare and from the outset and know your numbers. Set up your business so it is designed to make the income you want and need it to.
Here are some steps when doing your business prep.
Step 1. Start with a quick reality check using some reverse engineering.
Q1. How much income do you want to earn, as in how much salary do you want to pay yourself ideally? Assume your business is doing what you want it to. Because, think about it, if this is going to be your new job, why would you not want to get the salary you deserve. Don’t settle for paying yourself less than what the role is worth just because you are your own employer.
Q2. What is the minimum amount of salary you would want to earn to still make this job worth while?
Q3. Add up the total running costs for the business. (We will exclude for now the set up costs.)
Business cards and other collateral
Product manufacturing costs
Renewal of license (break down monthly for next year)
Visa renewals (break down monthly over when it’s next due)
TOTAL = WHAT YOUR BUSINESS NEEDS TO MAKE TO MAKE THIS VENTURE WORK FOR YOU. Do this calculation again with your lower salary figure to give you the first target to reach.
Q4. Calculate how much income each product can give you. (This is working out your pricing).
Q5. Work out your ideal product combo. How many products do you need to sell to make the total income that your business needs to work? Remember to do this calculation twice for your two income figures. Play around with this as you may have different product combos. Also, review your pricing to ensure that it works too. Remember it has to fit in with the number of hours in the day too.
Q6. Do you believe you can create this business?
If your answer is no, then back to the drawing board. Perhaps you need more products or services? Can you charge more if you add more value? Explore and do what you need to make the numbers add up.
If your answer is yes, then your entire business plan should be geared to producing these numbers. So how many prospects do you need to sell that much? That’s your sales ratio. How many people do you need to speak to, to convert that number of prospects? You can create your targets from these desired results. Don’t just set up a business and see how it goes. Take control and make it go exactly where you want it to so you can ultimately pocket the amount of income you want to make.
Step 2. Have enough cash flow to get you started.
Work out the total initial set up costs. If you have the intention to leave your current job then add to it 6 months of the income you would need to maintain yourself whilst you get your business up and running. You should have this total amount in available cash before you start - that's another reason why you should consider keeping your current job whilst you get your business up and running.
Step 3. You go, girl! With everything that you’ve got! You've got this!
By Rasheda Khatun Khan ( FPC / CII / Cmap / MDRT )
Wealth & Wellness Expert
Spiritual Kinesiology Practitioner
Rasheda is the Founder of Design Your Life Ltd, a Debt Panelist at The National and the Author of Millionaire Mindset - 6 Steps To A Wealthy Life. To find out more about Rasheda's work, get in touch at firstname.lastname@example.org and follow @rasheda_khatun on Instagram.