Client Number One - Signed, Sealed, Delivered!

The "One Million Dollars In 184 Days" Project produced its first paid client Friday. On an initial investment of $100.00, we acquired five (5) client prospects; our first paid client, an Executive Director of one of Chicago's most well known non-profit agencies, hired us to write a proposal design a website, and handle some technology services for her agency. In addition to the retainer she paid us, we may, before the end of the year, receive additional fees that may total as much as five figures, depending on how well we perform our grantwriting services. I hoisted a silent toast to our breakthrough; there's a lot of work to do, but we've taken an important first step.

Here's something very important about what we've accomplished: our venture is now profitably "in the black". I've always believed that no business ever went under that made a profit, even if that profit is only 1% after all taxes and expenses have been paid.

Like many would-be entrepreneurs, I've started new businesses and invested thousands or tens of thousands of dollars into equipment purchases, space rental, advertising and promotion, even staff hires - before I ever even had ONE PAID CLIENT to support my new business. I believe that 80% of all new businesses fail to survive their first three years of operation for one reason - they don't attract enough revenue from paying clients to cover expenses and generate a consistent profit.

The most important document you'll ever create in managing your new business enterprise is something accountants call a "P & L" statement. It's a month-by-month account of your expenses and income. Each month you spend more than you earn, you're in "the red", as accountants describe a business operating at a deficit. Each month your business generates more income than you spend in expenses, you're in "the black", or operating at a profit.

We started in July 2006. So our current P & L would look something like:

July 2006: Startup capital: $100.00
Expenses: $94.00
Income for July: $0.00
Net after expenses: $6.00

August 2006: Cash position at start of month: $6.00
Income from 1st client: $500.00
Expenses: $0.00 so far (no rent, phone, or other overhead expenses)
Net after expenses: $500.00 + $6.00 = $506.00

Today is August 5, so we're 36 days into the "One Million Dollars In 184 Days" project. Our cash position is $506.00. Our business is operating "in the black". Our challenge now: to invest our cash in ways that will grow the business and keep us operating at a profit.

That's Phase 1, Plan B.