A year ago, two entrepreneurs, Peyton and Alicia, started their online businesses.
They both started with nothing and used the same resources to get their businesses started.
Within 6 months, both Peyton and Alicia had made $25k in their business to date.
But after that 6 month mark, only Peyton continued to exponentially increase her business earnings. Alicia continued earning $5k or less each month in her business.
Alicia also suffers from not always having enough money in her business to pay her recurring business bills. There are months when she has more than enough money and other months when she doesn't have enough money.
Now I'm sure you have all kinds of ideas going through your head about what Peyton and Alicia did in their businesses to keep them growing or not growing like they did, and to avoid the feast or famine situations that Alicia goes through.
There are any number of things that they could have done in their businesses to grow or keep them on the same path and to avoid the feast or famine.
Before we dive into what Alicia and Peyton did in their businesses, let's first talk about the feast or famine mode that so many entrepreneurs go through.
What is Feast or Famine Mode in Business?
I'm sure you've heard about feast or famine as it relates to food. Feast you have more food than you need, famine there isn't enough food.
In business, replace the word food with money. When your business is in feast mode, you have more than enough money coming into your business to cover all of the incoming bills. You have money left over each month to go into the next month.
In famine mode, you never have enough money in your business. You are scrambling at the last minute to make enough money to pay your bills and usually not even meeting them.
Raise your hand if this is something you have experienced in your business.
How Does Feast or Famine Mode Affect Your Business?
One of three things usually happens to businesses that are in feast mode.
They are making more than enough money to support the business.
One: They pay their bills and save money in the bank for an emergency fund and business savings.
They make sure they always have money to pay several months worth of expenses available should their business hit a famine for a month or two and in case an emergency or big expense happens to pop up.
Two: They reinvest their money back into the business and continue to spend the money they have available.
Reinvesting in the business to help continue to grow it is a good thing, most of the time. But when you are reinvesting into more things than you can even use, it’s more like wasted money at that point.
Three: They pay themselves huge salaries.
Again, this isn’t necessarily a bad thing. It’s okay to pay yourself a huge salary and use the money as you see fit. Just make sure that there is enough money in the business to keep the business running as well.
In famine mode, there already isn’t enough money to pay the bills, but there are still some things that happen to make famine mode even worse.
They continue to buy all the things and reinvest in the business.
This is where reinvesting in the business isn’t always good. You can’t pay your business bills, but yet you are buying more things that really aren’t helping you in your business.
They pay themselves before making sure the business can run.
I get that you should pay yourself first. But how can you continue to pay yourself if you business isn’t producing an income to be able to run smoothly?
Do you have feast or famine mode in your business?
I’m sure at some point you do go through both phases. You obviously want to be more on the famine side.
But if you take the time to look at your business right now, what does it look like? Do you have more famine months or more feast months?
What are you going to do to change those famine months?
Back to Peyton and Alicia
At the beginning of this post, we started with a story about Alicia and Peyton making money in their businesses.
Peyton continues to have famine months in her business and continue to grow it, whereas Alicia is almost always in famine mode and can’t seem to make more than $5k in a month.
So what did they do differently?
Well, Peyton followed a cash flow plan that helps her plan what to sell each month in her business. And she didn’t continue to reinvest in things she knew she didn’t need. She saved her money in her business and had extra funds when she needed them.
Alicia just kept trucking along at her own pace, following the shiny objects when they pop up. She rarely finished the courses she bought. She rarely finished creating the courses she plans to sell.
If you want your business to succeed and make more money, then get out there and finish the things you buy. Finish creating the things you start creating. Have an inventory of products and courses and services that you can sell in your business.
Do the things that work to bring money into your business. And make a cash flow/profit plan for your business.
Are you going to avoid famine mode in your business?
Are you really ready to avoid famine mode in your business? Do you want to start making money more regularly and also regularly be in feast mode?
Stop staying in your safe lane. Get out of your comfort zone. Tell people what you do in your business. Sell your stuff to the people you know it will help.