When would you expect to start making a profit?

FatVonD

We've been in business now since the beginning of April (though it seems longer as we spent a couple of months setting up.)

We need two bookings per month to pay the rent on the studio and we currently have one booking per month for June, July and August (and December!) so I am still subsidising the rent by 50%. We started out with enough money in the bank to pay the first year's rent but, since all our work will be at weekends, I've paid off a credit card that had got to the end of its 0% period and have been doing some freelance work (in my *old* profession) to top up the pot. (All bookings are and will always be for weekends and midweek calls are being redirected to my husband's mobile.)

I'm disappointed and disheartened that we don't have more bookings yet but then I step back and think that actually it's only been 11 weeks since anybody has known we even exist and I should be pleased we have the work we have. Am I being too impatient expecting to be making a profit at this point?

paulwf

It all sounds positive to me. You have shown there is demand and you are in the right ballpark, you just need time to grow the business a little more. I expect a lot of business will be repeat business and word of mouth which all takes time. From a cashflow point of view you have money to cover rent for the forseeable future and you have a second job to pay the bills.

Now might be a good time to sit down and go through all your profit and loss records to see where you can cut costs and squeeze a little more revenue. Also take a step back and analyse good and bad things you've done and tweak the business model where you can. Just be careful not to drastically alter what you are doing as it sounds like you are on the right track, evolution not revolution as they say.

FatVonD

paulwf wrote: »

It all sounds positive to me. You have shown there is demand and you are in the right ballpark, you just need time to grow the business a little more. I expect a lot of business will be repeat business and word of mouth which all takes time. From a cashflow point of view you have money to cover rent for the forseeable future and you have a second job to pay the bills.

Now might be a good time to sit down and go through all your profit and loss records to see where you can cut costs and squeeze a little more revenue. Also take a step back and analyse good and bad things you've done and tweak the business model where you can. Just be careful not to drastically alter what you are doing as it sounds like you are on the right track, evolution not revolution as they say.

Thanks, we are hoping that word of mouth will be good for us but you're right, there are things we could probably tweak. So far we've put equal emphasis on the audio as the visual side but we could offer the same product in a form that would make it open to more people which is actually what our competitors do. By trying to do it better we may have narrowed down our market a little.

Thanks again.

Savvy_Sue

If it's the kind of thing where repeat business could be 'encouraged' faster, then consider offering a discount to your previous bookers if they re-book within 3 months (or whatever's appropriate).

Also think about giving them a discount if they introduce a friend, if it's the kind of business where everyone knows someone else who might want to use your services.

When you're tweaking, think about why people would use you rather than the established companies, and make sure that's well-known.

And think about all the free ways of promoting yourself you can: I'm not an online networker, but you probably need to Tweet, Facebook and LinkedIn yourself as widely as possible! Also face to face networking, which I realise may be tricky if you're working during the week, but look for posts by Horace because I think she speaks a lot of sense.

but if no-one knew about you 11 weeks ago, I think you're doing a very good job to have one booking a month for the next 3 months!

Premier_2

FatVonD wrote: »

When would you expect to start making a profit?

There is no simple answer to this as every business is different.

What you should be doing is monitoring your business against your business plan. That will tell you when you expected to make a profit ... and indicate the consequences of missing that target

FatVonD

Savvy_Sue wrote: »

If it's the kind of thing where repeat business could be 'encouraged' faster, then consider offering a discount to your previous bookers if they re-book within 3 months (or whatever's appropriate).

When we first advertised we offered a discount for any booking (whatever date) made before the end of April (hence the December booking!), we could do that again next month with a slightly smaller discount.

Savvy_Sue wrote: »

Also think about giving them a discount if they introduce a friend, if it's the kind of business where everyone knows someone else who might want to use your services. !

Thanks, Sue, the nature of the product means that a copy gets passed to half a dozen people and I'd always intended to put a discount card in each but I'd kind of lost my way a bit/my InDesign trial has ended and I've not got them printed but I could use the facilities where I'm freelancing to knock up a card and get some printed up before next weekend so thanks for the kick up the proverbial!

Horace

It takes ages to make a profit, I got zip from the wedding industry but since I rebranded, I have started to make some money but not huge amounts.

I network extensively and use Twitter, Facebook (although I tend to use this more for personal stuff) and LinkedIn - all of which are free. On LinkedIn you can join groups that are industry related and these are a good way of sharing ideas with people from around the world.

I look at networking meets with no membership fee (or low fee) - look at meets such as Business Biscotti because you turn up and pay for your coffee and chat with other business owners. You might be wondering why you would need to talk to other business owners but they know people who may use your service...it is all about extending your network.