By Marley Majcher, CEO of The Party Goddess! and author of “But Are You Making Any Money?”
It often starts like this: “You’re so amazing at [fill in the blank], Julia, you really should go into business.” And I cringe every time a newly minted entrepreneur tells me their story. Why? Because, it takes so much more than a great idea or amazing pastry skills to make a profit. And that is the difference between a hobby and a business: Profit. Yes, it takes talent, passion and a lot of other things. But one of the most important is the commitment to a plan.
Following is my quick and dirty system for going from Betty, the neighbor down the street who can help you with your daughter’s birthday party, to Betty, the go to girl if you want to knock it out of the park for your super spawn.
1. Make a plan and write it down. You MUST address the key components of a business plan before you go from hobbyist to the real deal. What makes you better, stronger or faster than everyone else in the marketplace and why are your future customers desperate to have you solve their problems or mix their martinis? You cannot merely be great at baking cakes. No matter what the neighbors say, they’re not enough to sustain you when it’s time to whip out the credit card.
2. Show me the money. What is your pricing strategy, your upfront costs and your overhead? Have you really drilled down on ALL of your Cost of Goods Sold, even the ones that seem inconsequential like that 10 cent label on the bottom of your magic lotion? It’s not enough to hope your sales will exceed your forecasts and you’ll get to somehow take a salary.
3. Create a time tracking system. From. Day. 1. Get used to it. You can always make more money, you can never get back lost time. How you spend your time will directly correlate to the success of your venture.
4. Get the ROI for your time, just like your money. You wouldn’t give your stock broker $10,000 without some sort of expected ROI, yet we don’t approach our time with nearly the same ferocity. Then we wonder why we can’t get everything done. Say adios to long lunches with friends of friends of cousins who just want to “pick your brain” — your core activities must all contribute to the bottom line.
5. Assemble a support system. My old business professor calls it a “Kitchen Cabinet” since a Board of Directors sounds a little formal for your spare bedroom scrapbooking company. But rest assured, entrepreneurship can be lonely. Save yourself a lot of sleepless nights and assemble a group of the smartest people you can think of, especially in key areas where you’re weak.
6. Tweak your model. Know going in that things aren’t going to go exactly as planned, but that doesn’t mean the planning was faulty or fruitless. Expect to react to the market and be nimble, lean and decisive.
Marley Majcher, CEO of The Party Goddess!, has planned events for A-list celebs such as Pierce Brosnan and Sofia Vergara, and now, with her book, “But Are You Making Any Money?” she has become a sought-after expert on issues and trends facing entrepreneurs and small business owners. Her business savvy has been cited in The Wall Street Journal, BusinessWeek, Entrepreneur magazine and more. For more information, please visit www.marleymajcher.com, or follow @ThePartyGoddess on Twitter and Instagram.