Over the weekend my husband and I went to see Lifehouse in concert. They were playing with Daughtry and it was a great concert. Lifehouse is on their “Smoke and Mirrors” tour, as that’s the name of their latest album. And, as often happens with me, as I was looking at the banner they had hanging above the stage with the words “Smoke and Mirrors” I got to thinking about how this idea relates to many service professionals who are in business for themselves. I know it may sound crazy but that’s how my mind works! It’s always making connections like that.
The phrase “Smoke and Mirrors” is a metaphor for deception.
I know it may sound harsh, but I believe many solo-professionals are deceiving themselves about their business. I regularly talk to people who have been in business for months, even years sometimes, and who aren’t making any money; they don’t have any clients, yet they say they own a business. However, if we look at the definition of a business, it is a legally recognized organization designed to provide goods or services to consumers, typically formed to earn a profit.
Just because you are getting up and doing work every day does not mean you are in a business.
You must be providing goods or services in exchange for money and making a profit.
Some business-owners are in reality, hobbyists.
According to the IRS, generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit. However,in order to determine if an activity is a business or a hobby, taxpayers should consider the following factors:
- Does the time and effort put into the activity indicate an intention to make a profit?
- Does the taxpayer depend on income from the activity?
- If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
- Has the taxpayer changed methods of operation to improve profitability?
- Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
- Has the taxpayer made a profit in similar activities in the past?
- Does the activity make a profit in some years?
- Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?
(Please note, you should not rely solely on this information to determine your specific situation. You will want to check with your accountant or attorney.)
For me, one of the saddest situations is to see someone who is following their calling and has an amazing gift to share that will indeed improve other people’s lives, and yet who can’t seem to package that talent or gift into a profitable business.
In my experience, most people who embark on their own business are very good at what they do. Unfortunately, if you don’t match that talent or gift with a solid plan for designing and marketing a business around it, what you end up with is a very frustrated “business owner” who in reality is just a hobbyist (according to the IRS’s definition).
And this is truly a waste. Especially when there are people out there who could be benefiting from this person’s expertise.
So what does this have to do with “Smoke and Mirrors?”
Smoke and Mirrors is about perceptions. There are people out there who APPEAR to be very successful – the Internet has done a lot to level the playing field, however it has also made it pretty easy to appear successful, when that may or may not be the case.
But what good is it to APPEAR successful if you’re not really successful? YOU know the truth. You LIVE it every day. You’re frustrated by it every day. However, if you’re kidding yourself and telling yourself your business is working, when it’s really not, the only person you’re hurting is yourself.
And until you look into the “Reality Mirror” and assess all the ways your business is NOT meeting your needs or serving you, you’ll never be in a position to do anything about it. Because as they say, awareness is the first step. (This is exactly what I did in December that enabled me to turn my business around quickly and get back into a profitable business model).
The cool thing is, once you’re aware of where your business is short-changing you, you’re in the perfect position to start making changes. You can “clean out your business closet” and get rid of everything that isn’t working, so you can replace it with new programs, services, and marketing strategies, that WILL work. Because once you’ve done an assessment, you have a much better idea of what will work for YOU.
Business is definitely not a one-size-fits-all proposition.
The most successful business owners are those who have built their business around who they are. They haven’t gotten caught up in modeling others. Rather, they’ve sought out knowledge and then run it through their own filter, and kept what fits, and discarded the rest. The result of that process is a business and marketing that fit you to a “T”. In other words, a business that’s profitable and that you enjoy. And there’s nothing better than that!
To quote the Lifehouse song, Smoke and Mirrors … “gotta break out of this place we’re in … we were living smoke and mirrors anyway.”
Don’t settle for smoke and mirrors. This is your one and only life. Look into the reality mirror today, and choose to break out of that stuck place you’re in, so you can create the business you deserve.