It’s never been easier to start a business. We have endless access to resources, content, and expertise online. Yet, while it’s easy to start a business, creating a long-term, sustainable business that gets you to your end goal is much more challenging.
We may start a business to gain freedom from a 9 to 5, achieve financial independence, scale nationally, or work towards a life mission. However, we often find ourselves feeling overwhelmed or stuck doing things we don’t care for.
In the United States, 40% of the population has a side hustle (around 70 million people 😳). While you might assume that the main reason people start a side hustle is to earn extra money and make ends meet (the third top reason), the #1 reason is to create more personal freedom.
However, the reality often doesn’t match the dream. We fall into the “hustle culture” trap, working tirelessly in pursuit of freedom, only to end up trading our time for money and feeling more trapped.
It can be hard to recognize when you’re stuck in a “second job.” While identifying and breaking free from this cycle is challenging, it’s crucial.
Don’t get me wrong, I’m all about working hard, and I believe that you have to make certain sacrifices when you’re starting a business — what I like to view as an investment of time and resources. But if you’re not careful, “hustle mode” can feel like quicksand.
So, let’s go over how you can move toward your goal of gaining personal freedom (or whatever your main business goal is) and solutions to break free if you’ve fallen into one of these pitfalls.
1. You’re Not Saying No
Mistake
When we start a business, it’s normal to feel the need to say yes to any business that comes our way. We want to start making money right away, right? And that’s okay. Learning about who we want to work with, how to streamline our offerings, and what business processes we need takes time. The beginning phases are all about taking action and learning. However, this is not a stage you want to stay in. You want to get to know which customers you work well with and provide the most value to while also being profitable. Even though we may feel compelled to sometimes, we can’t serve everyone, and we can’t say yes to everything.
Solution:
Instead of saying yes to any and all business, start setting boundaries and narrowing in on who your ideal customer is. A good place to start is to look at your current customers. Who do you love to work with? Look at your business financials — which customer has been the most profitable? What type of business do they have? What are the key attributes of the owner (your client)? What is their annual revenue? Who do they serve?
These details can help you build an ideal persona for your business so you can start to not only target these types of clients in your messaging and promotion but also have a clear understanding of who you want to say yes or no to when they come your way. I want to emphasize that a big part of this process is working through the fear of not making enough money or not growing your business because of saying no to new business. Trust me, I know from personal experience.
By serving a specific audience, or a niche, you can stand out from your competition and make it easier for your ideal customers to say, “Yes, this is exactly what I need.” A niche is a profitable segment of any market or industry with a focused audience who is looking for a solution to their problem. Working with a niche results in attracting more of the right customers over time and a profitable business.
Not sure where to start to identify your ideal client? In our Surviving to Thriving Business Blueprint, you’ll receive worksheets, templates, and a guided overview of how to discover your niche, positioning statement, competitive advantage, and more.
You’re Chasing Clients to Get Paid
Mistake
I hear all too often from business owners about how much time and energy they waste having to chase down money owed to them (I was guilty of this too!). Those collection calls or email reminders can be so awkward! More importantly, it impacts your business’s cash flow. Challenges with getting paid on autopilot could be due to not having the right agreements in place that protect you, not managing and sending invoices often enough, or not having a simple, easy-to-use payment process for your clients.
A quick story of how I was guilty of this…
When I had my first 4-5 clients, each client had a different billing schedule based on their customized service agreement and I would forget to send invoices. My process was to check in on invoicing, typically when I saw that funds were getting low or contractors had to get paid. I would review previous invoices, see who needed to be billed again, and manually create a new invoice. Sometimes invoices would stay unpaid, so I had to send an email reminder which made me SO uncomfortable! Finally, I got tired of having to remember to send invoices and worrying about cash flow.
My first steps to streamline the process, which helped tremendously, were to 1) update all of my service agreements so all clients had the same billing schedule and all payments were due at the same time and 2) set up recurring invoices to be emailed automatically along with automated reminders at 3 days, 7 days, and 14 days after the due date.
Then, I realized that there was more to streamlining this process… I had to analyze my pricing structure. You see, I would take on a new client, discuss their needs, see how I could help them, and create custom pricing. And this went deeper… it was linked to my confidence in what I offered as well as my fear of not converting enough clients (remember mistake #1?). So, I made the decision to create a set pricing structure based on not just what hourly rate I needed to make, but also on the value and benefit behind what I offered. Eliminating pricing on a client-by-client basis was the key to a fully streamlined process (including reducing the time I was spending creating custom proposals and service agreements!).
Solution:
So, now that you know a little bit about my experience with this, here’s what I recommend. Instead of calling, emailing, following up, resending invoices, or worse – taking legal action to get your money, take time to implement a painless billing and payment process for you and your clients.
Here are just some of the ways you can streamline your payment collection process:
- Request a client’s credit card when they sign up and keep it on file for automatic billing
- Set up recurring invoices that are emailed on autopilot each month, and payments are processed automatically
- Set up automated payment reminders
- Use a mobile app or swiper to collect payments face-to-face
- Set up a contract with terms and conditions that require a deposit
- Consider hiring help for accounts receivable
And if you find that you’re in a similar situation that I was early on, consider the steps I took to analyze how you’re pricing and updating service agreements. You’ll also need accounting software. There are a variety of solutions available that are not as scary as robust platforms like QuickBooks. I recommend Freshbooks — it’s an easy-to-use accounting software for small business owners and freelancers that makes it easy to get paid faster and manage your business accounting (including invoicing!) without needing experience in accounting.
You’re Not Being Money Mindful
Mistake:
How do you know you’re making a profit? Do you have separate bank accounts and credit cards for personal and business expenses? What is it costing you to provide your service or product? When was the last time you categorized your business expenses? Every business owner should have clear and timely answers to these questions. Unfortunately, many don’t know the answers because they don’t have a process to manage their business finances, don’t review their financial reports often enough, or have someone else do it entirely for them without consistent review.
Solution:
Your numbers are everything. My sister (a financial strategist) always said, “Numbers tell a story”. So, as business owners, we need to get to know the story our business numbers are telling us. I call it being money mindful and this will help you expand cash flow, increase profit, and foresee any financial problems. While it’s essential to work with a bookkeeper and a CPA (typically, after your first year in business, you want to have both), you must have a foundational understanding of your business finances.
First, it’s important to separate your personal finances from your business finances. Secondly, take time to track your business expenses and income closely. Thirdly, be sure to run or request reports regularly to monitor and analyze your financial data. Doing this consistently can help you identify things like the need to raise prices, expand your services or products, eliminate a service or product that’s not profitable, and much more. By understanding your business finances first, you will know what to look for and how to oversee an outsourced bookkeeper.
As I mentioned before, there are many accounting solutions available. One I like and recommend is FreshBooks. It’s easy to use, you don’t need accounting experience and many features are available including bookkeeping, reporting, invoicing and estimates, and much more.
You’re Getting Stuck as the Business Operator
Mistake:
As a small business owner, we wear many hats (not including the hats we wear in our personal lives!). This is because a small business has SO many moving parts. With all these moving parts to keep track of, a common pitfall small business owners fall into is getting stuck working IN their business as the business operator.
As a business operator working IN the business, instead of ON your business, it becomes challenging to identify areas of the business that are not operating at full potential because they go unnoticed or unaddressed. We only have so much time to spend in each area, making business growth limited. With limited time, we don’t focus on assessing and planning for improvements to fill gaps, delegate, or integrate crucial back-office systems and processes.
Solution:
First, take a moment to analyze where you are and where you want to be. Second, if you don’t already have dedicated time for your business, create a schedule where you block out time for specific activities.
A quick detour…
Early on in my business, I started taking on clients, and my week was full of client work and meetings. I was tracking all my time, but I didn’t even have time to review how many hours were being spent on each client. My website was under construction for an embarrassing length of time because I had no time to work on my own business. I was being the business operator, not the owner, with no time to look at financials, work on marketing to get more clients, analyze hours and projects for profitability, and more. It wasn’t until I created a strict, color-coded schedule using AI, Google Calendar, and Asana that I began dedicating time to my business and delegating more work. I set boundaries on when I was available for meetings and client work. It made a world of difference in my business!
If you don’t already have dedicated time set aside, be sure to create a schedule that works for you, your life, and your work. Set aside time for different areas of your business like the following:
- What processes do you have in place, and how can they be improved?
- Have you taken the time to interview your customers, vendors, employees, or contractors?
- What data can you gather and review to understand your business performance?
- What tasks can you delegate or outsource? (If you’re looking to delegate administrative work, ChatterBoss virtual assistants are amazing!)
- What’s working in your marketing strategies, and what isn’t?
- How regularly do you monitor cash flow and profitability?
- How well do you understand your industry trends and your competition?
- What feedback have you gathered, and what patterns are emerging in customer interactions?
Having the right tools and technology can support this process and ensure it’s a smooth process to gather and review data and performance in different areas. The right tools should help you work smarter, not harder, fit the specific needs of your business, and have the features you need to fill gaps. All-in-one marketing tools like Keap that automate business, sales, and marketing processes or a business management platform like Dubsado can help you create workflows and streamline your business with less of your time and save you money.
You Didn’t Build Your Business With a Strong Foundation
Mistake:
Many entrepreneurs start with a focus on making money right away, which is important for survival. They often figure things out as they go, which can be necessary in the beginning. However, this approach lacks strategic planning and long-term sustainability. The goal of just making money won’t sustain you long-term; eventually, you’ll need a deeper purpose and vision to stay excited about your business every day.
At some point in your career, there will come a morning when you’ll awake and ask yourself, “What am I really doing?” It’s at this point that earning money by making/selling whatever will no longer be motivation enough.”
Without vision, clarity, purpose, and accountability, you will likely spend time and money on unnecessary or wrong things, becoming reactive rather than proactive in your business (what I refer to as firefighter mode). This can significantly impact your business’s growth.
This is why establishing a strong foundation is SO important for your business.
Solution:
First, take some time to consider why you are in business. What’s your WHY? Second, take the time to establish the core foundation of your business by reflecting and answering the following questions:
- What is the core purpose and values of your business?
- What’s the vision that will guide you and your team?
- What are your short and long-term goals?
- Who are your competitors, and what are they doing well or not so well?
- What are your strengths, weaknesses, threats, and opportunities (SWOT)? Leverage this to identify gaps in your market—a chance to offer something that customers want but that businesses aren’t currently providing.
- Who is your ideal buyer? Your target audience? What are their struggles? What do they want, and how can you give them what they need?
- What is your unique brand positioning? Your niche?
Understanding the answers to these questions allows you to set realistic expectations, determine where you are, and outline how to get to where you want to be. This sets you up for long-term business success.
To help you build a strong foundation, consider using the Surviving to Thriving Business Blueprint. This is a comprehensive guide to move beyond survival mode and strategically plan for a thriving business. It will help you define your purpose, clarify your vision, and establish a roadmap for sustainable growth.
Are you tired of falling into common business pitfalls and feeling stuck in the hustle?
Break free with our Surviving to Thriving Business Blueprint. Discover how to strategically plan for long-term success.
