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Count the Costs

I took an early lunch today and caught The View.  Today’s show was all about how to find a job.  They featured the story of several women, including one who had quit her retail management job – that’s right, I said quit, not got laid off from – to pursue her dream party planning business.  It seemed like a good idea at the time; she had clients, and her husband had the steady job with benefits.  Then her husband was laid off, the bookings dried up, and the medical bills for her child with special needs piled up.

Her story had a happy ending.  The producers of The View and their guest, Women for Hire founder Tori Johnson, helped the woman to brand herself and market her business with a new website and profiles in various places.  They also helped her to find a job in real estate until her business picks up, which it already has.  She’s booked several new clients, and she got to mention her website three times on The View.

I took three lessons from the show today:

1. If you hold on long enough, things will work out.
2. When you’re stuck, it’s important to seek out support.
3. Count the costs before you act.

Since I think the first lesson is obvious, let me highlight the last two.  Johnson was on the show to give examples of how a support group can encourage you and hold you accountable when you’re job hunting.  I think the same is true when you own a business.  You never know where a business lead might come from; that’s why networking is so important.  The woman featured on the show didn’t have a professional background similar to any of the other women, but surely all the women in the support group knew someone who has a birthday, and if that person didn’t want a huge party, surely they knew someone who did.  Even if Johnson hadn’t been there to help with the PR and marketing, the other women also might have known website or graphic designers or copywriters who might also be looking for work.  And if the women in the group couldn’t help with any leads at all, they most definitely could have encouraged the party planner, offered to help her family with babysitting while she sought out work, or offered to hold her accountable for the goals she sets each week.  Bottom line: it’s tough to do it alone.  That’s why small business development centers, community resource centers, organizations like SCORE, and professional networking organizations are around for business owners.

Despite all the help these groups can offer, there’s nothing quite like planning things out.  I took a business feasibility course that was basically a crash course in how to write a business plan.  The course explained that although a business plan isn’t necessary for every business, it does help you to see how feasible the business is.  A business plan will tell you how much you’ll actually need to sell to draw a profit, and it will help you estimate how long it will be before you actually do.  It will also help you to generate ideas about how you will market your business, stand out from competitors, retain clients, get a steady stream of customers, and tweak your idea where the plan shows you fall short.

No one on The View asked the woman if she generated a business plan before quitting her job, and even if she did, the drastic change in her husband’s economic situation probably would have changed the sales forecast.  However, planning for the unexpected should also be a part of your business plan, and it should go in your financial worksheets.  Are you planning to finance your business by borrowing against your house?  Will a spouse’s income support you or the business?  If so, how much do you need to sell to keep from losing your home or becoming a burden to your spouse?  How much will you need to sell if you lose the house or the spouse’s income?  Doing multiple financial worksheets taking into account multiple scenarios will help you to count the cost of pursuing your passion and to be a successful business owner.

To see an example of a market research report for a business plan, click here.