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7 Reasons Your Small Business or Freelancing Career Isn't Making Enough Money

Cash flow problems? It's probably due to one of these reasons.

What if you have sales and are still not making enough money? Here's another comment I received:

I left corporate work in 2013 and created my solo consultancy. I have *not* reached my corporate salary (not even close) and while I’ve been incredibly successful in terms of business, clients, 80%+ client-referral, outcomes, A-lister clients, etc...the financial success is not there. I know every 'freelancer' and solo entrepreneur knows what I’m talking about. I’m now focusing and building strategy to grow my services business. I’m trying to remain open-minded to growth ideas that I rejected in the past.

Here are seven reasons your small business is not making enough money.

1. Current business area is lower-paying than previous corporate role.

This particular small-business owner is not making enough money when she compares her current consulting business to her previous corporate role -- “I have *not* reached my corporate salary (not even close)” despite strong sales and clients results. However, this may not be a fair comparison.

A previous job might serve Fortune 50 clients, while the current business serves mom-and-pop businesses. A previous job might deliver long-term, multi-departmental projects, while the current business is a solo consultancy with smaller, discrete pieces of work. Make sure the money potential is there in your current business before you expect it to replace your previous corporate salary. Depending on your financial obligations, you may not need to replace your salary. Compensation is not just monetary -- there are psychic and lifestyle benefits that make up for the lower pay. However, if you do want to make more, then look at your revenue potential. If you charge by the hour, can you charge a high enough rate and book enough hours that you can replace or exceed your corporate salary?

2. Pricing is too low.

That said, if your current business is in a similar market as your previous corporate job and you are still not making enough money, this is a legitimate concern. You should expect to match, if not exceed, your former salary (after all, you are now taking on the risk of developing the business).

So, if you are doing similar work but not earning as much money, look at your pricing. You may be charging too little -- a small price for a small shop, rather than a big price for a big company. 

You might have strong sales, but are you pricing high enough with each sale, or at least your average sale?

3. Costs are too high.

A consulting or services business typically doesn’t have as complicated (or high) a cost structure as a products business that has materials, manufacturing, storage and distribution costs. However, all businesses have costs, so when you are not making enough money, you have to review yours.

For example, my services business has costs, including office rent, accounting and legal fees, technology and equipment and travel and entertainment. If you have strong sales but don’t feel you’re making enough money, then your cost structure may be too high for the prices you are charging.

Do you need ongoing office space? Do you need that professional membership? Do you need that subscription? In the 10+ years I’ve been in business, I have pruned a number of support services that turned out not to return enough for the cost. Many of these services aren't too expensive on an individual basis, but in aggregate, they can impact your profits.

4. Volume or turnover is too slow.

Let’s say your costs are minimal and your pricing is in line with your market. Your profit seems high each time you make a sale, but you are still not making enough when you draw each week, month or quarter. Your individual sale might be just fine, but you are not making enough of them.

This particular reader is getting results and referrals, so not having enough volume isn’t a reflection of not doing a good job. It could be simply be caused by a long selling cycle or a conscious decision to not take on as much work. If it’s a conscious choice to limit your number of clients, then you have to charge a premium to each client. If your selling cycle is so long that you inadvertently limit the number of clients, then you have to focus on speeding up the process from the time a client hears of you until they decide to buy.

5. Pricing doesn’t include enough margin.

The unbillable time that you spend selling is a real cost that could mean the difference between a fat profit margin and not making enough money. Additional unbillable time that is necessary for your business includes time you spend on operations: keeping your books in order, invoicing and collecting payments, maintaining your website and maintaining your brand.

You need to account for all of these activities when you set your pricing to ensure that it has enough margin to cover not just executing the work, but all of your operations. Many small businesses' pricing does not include enough margin, either because the small-business owner only considers the hours they are actually executing the work or because they underestimate how much time is spent on these unbillable, but business-critical, activities. 

Do you know how much time you are spending on what activities? Does your pricing account for all of your time?

6. Client targets are too low.

When you do come up with a price that accounts for all of your time, you might see that the breakeven price is much higher than you have been charging to date. You might fear that your clients will balk at paying this increase. This fear may be unfounded, because if clients have been happy thus far, they may not want to lose you.

You can increase prices gradually or offer payment plans -- there are ways to negotiate a price increase so it’s more palatable. However, you might find that some of your clients are unable or unwilling to pay the higher prices. You need to build your business around clients who can pay the prices you need to hit your earnings target.

7. Offering is too small.

If your clients are right and your pricing is right, another area to review is your offering. I coached one design consultant who offered a range of services, from strategy to execution of a branding plan, and sold each step individually, as well as in a bundle.

However, the selling cycle for individual pieces was just as long as for the larger projects. This meant the margins were much smaller, and that she was better off focusing on the larger offerings. She could still take on smaller projects opportunistically, or refer these out and take a fee. You don’t have to say "yes" to every sale, because not every sale is of equal value.

If your small business is not making enough money, there are many levers to pull to improve its profitability. You need to know your numbers, from the unbillable time you are spending to the price of each individual offering. The small businesses I see struggle the most are ones that don’t have a concrete sense of their numbers.

Keep a time log. Review your historical sales for pricing, scope of project, client size, client mix and sales channel. Look for the areas that you can improve in your business based on the profit you want, as well as the psychic and lifestyle benefits you wish to retain.

(By Caroline Ceniza-Levine. Ceniza-Levine is a career change expert with SixFigureStart.)

Understanding Cash Flow is King

A healthy cash flow is the lifeblood of any small business, and knowing how to manage the businesses cash can be the difference between success and failure.

The often quoted phrase, ‘Revenue is vanity, profit is sanity but cash is reality” certainly says it all in 10 words. Having ample cash on hand will ensure that suppliers, employees and others can be paid on time. Understanding your numbers will allow you to make informed decisions quickly when an opportunity comes up that can translate to increased revenue and profit.

Cash management can be as simple as a cash flow spread sheet that monitors the movement of cash into or out of a business, matching outlays of cash with money owed to your business.  As a small business owner, you must keep a record of all payments, bank statements, bills from all customer sales, vendor and supplier purchases, items received and checks disbursed-including payroll.

Bookkeeping may seem mundane but it is essential to keep track of the cash that is going in and out of your business.  If keeping the books up to date is not your strength, find a professional who will ensure you stay up to date with all GST and payroll submissions, as well as, all regular tax filings.

As an added bonus, a professional bookkeeper can have all the information ready for a seamless transfer to your accountant for year-end filings; your accountant will be able to offer advice on anything you should be doing to keep your business fiscally healthy. Best of all, a professional can take care of the books and you can do what you do best whether it’s sales, marketing or management.

Making more than your business is spending? That is good. Is your cash flow regularly edging into the red? Not so good! It’s time to get some help. All it takes are a few smart moves to bring your business into the black. 

Jolynn Green is Executive Director of Community Futures Central Island. You can count on us for sound practical advice, personalized business coaching and tailored financing that supports your business goals. Jolynn can be reached at or 250-591-7499



CF Alberni-Clayoquot Awarded $493,000!

Community Futures Development Corporation of Alberni-Clayoquot is being awarded $493,000 to develop and launch the Great BC Businesses Sale, which will showcase opportunities in rural B.C. and offer education to communities and business owners.

PORT ALBERNI – Under the BC Rural Dividend Program, the Government of British Columbia is providing $1,753,481 million for 10 projects on west Vancouver Island.

“These projects will help local communities advance many important initiatives, such as expanding the use of clean hydro power, improving food security, training local workers and building business opportunities,” said Scott Fraser, MLA for Mid Island-Pacific Rim. Almost $19 million in 153 single-applicant and partnership project grants are being awarded to eligible local governments, First Nations and not-for-profit organizations through the Rural Dividend Program.

These grants help fund projects that support economic development and diversification in rural communities throughout the province. Grants can be up to $100,000 for a single-applicant project or up to $500,000 for partnership projects. “This funding supports the diverse needs of small communities throughout the province and the people who live in them,” said Doug Donaldson, Minister of Forests, Lands, Natural Resource Operations and Rural Development. “Our government is getting results for people in every region, creating jobs and enhancing everyday services and amenities for families around the province.”

Read all about it here!

Strategic Planning

Are you looking for direction to keep your business moving forward? Strategic planning is often pushed aside as it takes time to work on your business rather than in your business. Whether you are a sole operator fitting work around a busy life, a staffed business or volunteer organization ready to go to the next level, a strategic plan provides you and your team the direction it needs to stay on track and propel forward in today’s marketplace.

A strategic plan is a valuable guide for your employees, your leadership and stakeholders to know where you're going and why you're going there. Strategic planning should involve key teammembers; it is important to have input and buy-in at all levels.  Reserve time and space; eliminating interruptions improves everyone’s focus during the brainstorming process. A strategic plan that is well communicated gives you access to greater productivity, culture, empowerment, and overall effectiveness. 

I am often asked, “Why should I bother with a strategic plan?” I think of a strategic plan as a compass.  You can have a ship, crew, fuel and cargo and a destination however if you don’t have a compass to guide you in the right direction you may become lost, take longer or just plain sink. These same principles can apply to a business. 

Strategic planning:

  • gets your team on the same page and aligned with your organizations vision, mission and goals
  • can maximize your organization's resources to avoid wasting time and money on projects or activities that are not important 
  • helps understand industry trends and scenarios that could impact your organization in the coming years
  • identifies and evaluates the best way to accomplish your goals
  • develops an implementation plan to keep you and your team on track and accountable for deliverables

Your annual operations plan should align and propel your strategic plan.  A great strategy is most often re-evaluated on an ongoing basis (quarterly or annually, for example), rather than being a static document just sitting on a shelf. Keep your plan flexible so you’ll be ready to adjust and pursue new opportunities, keeping in mind that they should align with your long-term goals and objectives.

We're nominated - vote for us!

Community Futures Central Island would like to thank those who nominated us for a Greater Nanaimo Chamber of Commerce 2019 Nanaimo Business Awards - Financial Services category!

We are humbled and thankful. We'd love it if you could vote for us, as well as the many other deserving local businesses in our community.  Voting is open until Feb 28th.​ 


5 Tips To Master A Successful Entrepreneur's Mindset

A new month; a new mindset awaits. Most of us have something that we want to achieve, do, start, or create. It may be to start a business, generate initial sales, break a million in revenue, or start a blog. Whatever your goal, the dream factor exists and once you recognize it, all you have to do is adjust your mindset and chase it with purpose and determination.

"Adopting an entrepreneur’s mindset has multiple benefits. You’re “the boss of you” and are in control of your life and your career." 

Read full article here

Qualicum Beach Chamber of Commerce Celebrates Excellence

We are proud to sponsor the "New Business of the Year" category of the Qualicum Beach Chamber of Commerce Celebrates Excellence. The winner will be chosen from nominees that have been in business for less than two years. The business must be a good corporate citizen and the owners / managers should be involved in the business community. The new business should be located in communities served by the QBCOC.

You can make a difference in your community by nominating someone you believe has gone above and beyond what is required in a local business or the community in general over the past year.

Nominate someone today, HERE. Nomination accepted until Monday Jan 28, 2019

Better Business Bureau Torch Award Finalist - Exceptional Employee
Congratulations to Jolynn Green who was a  finalist for the Better Business Bureau's new Exceptional  Employee Torch award, handed out at their Gala evening Nov 2, 2018.  
A conversation between Gloria Hatfield, President of the Gabriola Chamber of Commerce (GICC) and Community Futures Central Island (CFCI) Executive Director Jolynn Green, after the 2016 disbandment of  Nanaimo Economic Development Corporation (NEDC) and Tourism Nanaimo, focused on how “we” should work together to address the challenges Gabriola faces for business growth and the resources CFCI brings to the table; a conversation which led to the formation of a group trusted with the task to navigate the challenges around tourism and business development of Gabriola, Decourcy and Mudge Islands.When NEDC collapsed, everything that they had about Gabriola vanished and GICC have to start from square one recreating the website and collecting photos and information.
Gabriola Island  faces unique challenges for business growth and housing for staff due to limitations and bylaws enforced by the Islands Trust (IT). IT is a federation of local governments serving islands in the Salish Sea which are responsible for preserving and protecting the islands' distinctive amenities and environment. CFCI worked closely with GICC which is a member organization within the CFCI region. Green and Hatfield collaborated to create a strategic plan for economic development - the Strategy for Economic Prosperity on Gabriola (SEPG) - resulting in a three - year delivery agreement with the Regional District of Nanaimo (RDN).
It was very satisfying to see the results of many conversations transformed into SEPG.  The creation of SEPG connected deeply with the CFCI mission to assist and encourage the enhancement of economic and community development of the Central Island residents/business owners.  CFCI encouraged GICC to apply for monies from the Island Coastal Economic Trust (ICET), with Green leading the process that included collaborations with Gabriola Island businesses to share intellectual and in-kind resources among many organizations and stakeholders.
With SEPG ready to be implemented, ICET’s “Quick Start” stream of the Economic Development Readiness Program provided $5,000 to enable the GICC to move forward with the development of the organizational structure and human resources required to action the plan. Further collaborations resulted in the BC Rural Dividend Program (BCRDP) providing $100,000 to the GICC who will use the monies to develop a homegrown strategy for economic prosperity on Gabriola Island. Newly-hired Community Economic Development Officer (CEDO) Julie Sperber be responsible for balancing economic development with positive social impact and sustainable practices.
“This is unprecedented support that we are receiving from the Province and the RDN, CFCI and ICET,” mentions Hatfield. Green has been there through the entire process and continue to support stakeholders with bylaw, policy and procedure rewrites, and governance training, acting as a mentor for the newly appointed CEDO on a fourth application for ICET. According to Cheryl McLay, (Ministry of Forests, Lands and Natural Resources, Regional Economic Operations Branch), the CFCI/GICC application for RDN funding presented the model proposal; hence, other communities are approaching CFCI to assist with economic development proposals.
In summary Green facilitated, conversed, cajoled, wrote proposals and grant application,  and more … providing untold  hours of hard work which resulted in:
  • $6,000  from RDN - start the process
  • $29,925 from RDN  for 2017 - keep the train moving
  • $5,000 from ICET
  • $5,000  from RDN and then another $65,000 from RDN based on SEPG for 2018 and 2019 - to develop an economic development strategic plan
  • $5,000 from ICET -  organizational structure and HR required to action the plan
  • $100,000 from  BCRDP - to develop a strategy for economic prosperity
I, Ed Poli, as Chair of the Community Futures Central Island Board of Directors know that, "Jolynn is a powerful asset for CFCI and is truly an exceptional employee in every sense of the word. Her work on this Gabriola Economic Development initiative is just one example of how she regularly uses her energy, creativity, and impressive interpersonal skill set to serve CFCI and our community. "  I do believe she deserves to win the Exceptional Employee award as Green has gone above and beyond for this  client, and others. 


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Communities Served

Ladysmith, Nanaimo, Gabriola Island, Lantzville, Nanoose, Parksville, Qualicum Beach, Bowser, French Creek, Lasqueti Island
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Community Futures Central Island
#14 - 327 Prideaux Street
Nanaimo, BC
V9R 2N4

T: 250.591.7499
T: 888.303.2232
T: 877.585.5385