There are many individuals who have survived economic upheavals in their countries. For example Zimbabwe, my home country went through a massive economic meltdown in 2007/2008 financial years. A lot of companies and individuals were totally ruined economically such that many corporate organizations shut down and some individuals never recovered.
Companies are still scaling down or shutting down today and individuals are losing their livelihoods through job losses. In harsh economic environments like these, is it possible for individuals to restore or improve their liquidity sustainably?
With some outside the box thinking and action, individuals have the capacity to create their own micro-economies through home businesses. The viability of these home businesses obviously depends on whether or not they are profitable.
Whatever field you set up a home business in or whatever model you follow in running the business, the most important factor to consider is whether your bottom line is net positive. If your business is not making net profits then eventually it is going to collapse. It is just a matter of time.
The tips that I am sharing with you on this post must be integrated into your home business. they will not only help your business to survive but to become profitable as well.
1. Know Why You Are In Business
Write down your reason why you are in business. What are your expectations from the business? There are two levels at which the reason why must be defined. Define your personal why and the why of the business itself. Go on to establish the degree to which the two expectations are mutually compatible.
Your plans and all the activities that take place in your business operations must feed into fulfilling your two WHYs. Review you plans regularly to check if you are still on track to accomplishing your reasons for being in business. Making Profits must be a major component of that plan for you the business owner and for the business entity.
2. Pride or Feeding the Family
In the initial stages of any business, there will not be visible profitability. However the difference between a business that will fold and a business that will survive to flourish beyond those initial years is based on the profit plan. Many business plans focus on a marketing plan that is centered on increasing sales and hoping that that will automatically lead to profit.
Reality check. High turnover does not necessarily translate to making profits until a detailed income expenditure analysis is done to determine whether the costing of a product or service is resulting in net profit. Increased sales feed your pride. It is only increased profits that feed your family.
3. Making Profits Creates Re-investment Capacity
A combination of positive cash flow and making profits will expand your business’s ability to grow through re-investment. A lack of profit results in weak cash flow. A weak cash flow translates to low working capital. If a business is to survive and expand, its capital base must be strong and that strength can only be obtained in two ways: profit or external investors/loans. In these stringent economic times, there is very little chance of accessing external funds. It is imperative to build your own life blood by having a solid profit plan.
4. Making Profits Give Options
The more options your business has, the more robust it become. Options or choices are freedom. A lack of profits in your business makes you dependent on others. A business that is generating profits allows for visionary planning and the development of a strong future direction.
A comprehensive profit plan must constitute part of your marketing plan if your business is to be viable and sustainable. Remember that surviving one economic melt-down is no guarantee that you will survive the next one. Create a Plan B as an individual. Starting a profitable home business is one sure way of doing that.
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Nomusa is a devoted mother of four sons. A professional water resources consultant with a Masters degree in Water Resources Engineering and Management, she has mastered the art of mindset shifting and integrating her conventional professional training with becoming a successful network marketing business owner.
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P.S. – If you already have a home business and you are looking to take it to the next level OR if you are looking for a new home business opportunity CLICK ON THIS LINK and get a free consultation call from me to propel you into success.