Seven things you MUST do if you want your business to make money
Is your business struggling to make a profit? Do you resent working for free? Here are seven things you MUST do if you want your business to make money.
As a small business owner, finances usually loom large! For many of us, making sure we bring in enough money to pay the bills (and hopefully a bit more besides) is a necessary evil.
But the key word there is ‘necessary’. It’s really important to stay on top of your money matters. If not you could find your business cracking the whip, without financially rewarding you for your work.
Seven things you MUST do if you want your business to make money
So how can you run a business that isn’t just busy, but financially successful. Here are seven things business coach Amanda Cullen believes you must do if you want to make money.
1) Budget wisely
When did you last review what you spend money on in your business?
It’s easy to get into the habit of spending money on some things and not others. Perhaps you regularly buy business cards, have subscriptions to networking groups or other support networks, and pay someone to manage your website.
At the same time, perhaps you baulk at paying for admin support that would help your business run so much more smoothly, and free you up to find and/or service more clients.
Or maybe a small monthly payment for an accounting app such as Quickbooks, Xero, Wave or Kashflow would save you endless time managing a spread sheet and reconciling your income and expenses.
Take time to review what you are spending your money on, and make sure that every penny is spent wisely – on the best deals for basic essentials like business cards, and on the right kind of help to support your business. By cutting down on expenses in one area, you could free up money to invest in another area of your business, that will help you grow faster.
2) Do your accounts regularly
Dealing with our finances becomes much easier if we tackle it regularly. Keeping track of invoices issued (and paid) and money spent on materials, suppliers, subscriptions, etc is a much bigger headache if we put it off and only tackle it once or twice a year.
It pays to pause regularly to review how things are going and, if necessary, to update any manual records. Of course this is easier if you are using one of the cloud based software options such as those mentioned above.
Doing this also enables you to consider whether there is something you need to stop doing (because it’s unproductive financially) or do more of (because it is delivering financial benefits). So book a date with yourself once a month to update your finances.
3) Do what you’re good at
If you run your business as a limited company it’s a legal requirement to involve an accountant. But if, like many small businesses, you operate as a sole trader then using an accountant is completely optional.
However, if you don’t enjoy handling your finances, and find them a struggle, then having an accountant is almost certainly a worthwhile investment, leaving you free to focus on what you are good at which will help your business to be more successful.
Many, if not all, accountants who work with small business owners are happy to work with your software, such as the apps I mentioned earlier. These new cloud based types of software allow your accountant to have access, so they can offer ad hoc advice as and when needed, and do as much or as little as you want.
4) Be clear when to stop the freebie and start the clock
Many of us give something away in order to attract clients. Perhaps it’s a free ebook or checklist, designed to get people to sign up to our mailing list, or a free sample that we give out. Or maybe it’s a free conversation where we explore what the potential client is looking for and let them experience what we have to offer.
If you do offer a freebie – and there’s absolutely nothing wrong with that as a marketing tactic – then make sure you are very clear about when the freebie stops. It’s easy to get sucked into one more conversation, another free sample or another little piece of information or advice.
Take the time to get clear in your own mind what your policy is, and then stick to it. Ultimately, people who really want to work with you will respect you for it, and will value your work more.
5) Charge what you’re worth
Do you find the whole issue of knowing how much to charge a bit awkward? You’re not alone. It’s tempting to think that you are selling your time (if you offer a service) or that you are selling the materials and production cost (if you sell a product), but it’s so much more than that.
A great way to think of this is to ask yourself: “Would an 18 year old school leaver be able to do what I do?” If not, what is it that enables you to do it? Make a list of all your skills, training and experience that enable you to do what an 18 year old could not. Then ensure that your price adequately reflects all of these.
If, like many women, you struggle with charging your worth, you may find these articles helpful:
- The five secrets of charging what you’re worth
- Are you afraid to charge what you’re worth?
- How to raise your freelance rates – the complete guide
6) Help clients understand the value of your work
When we do tell potential clients our price, we sometimes get pushback. Planning in advance how to deal with typical objections can be really helpful.
For example, if a client says “that seems very expensive”, what will you say? Possible answers might include:
- “It takes into account not just my time (with you)/the cost of materials, but also the time and money involved in developing the necessary skills and expertise to offer this service/product.”
- “I’m not the cheapest but I believe in offering excellent quality and what makes me stand out from the cheaper options is…”
- “I’ve researched the market and this is the market rate for this quality of work/market price for this kind of product.”
There will always be some clients who are just looking for a cheap bargain. Don’t worry too much about not working with them – there are times when it’s better to actually put off clients if their budget is too small.
On a similar note, it’s also worth reading four reasons why clients think you’re too expensive.
7) Be clear on your discount policy
Don’t be caught on the hop if someone asks for a discount. Think through in advance what your policy on discounts is. A good rule of thumb is to always ask for something in return. For example:
- Yes, I can offer a x% discount if you pay in advance.
- I’m happy to offer a discount to clients who buy more than x items/book x sessions.
- I offer a loyalty scheme which means that after x sessions you get one free.
What changes you can you start making today?
As you read though these seven tips, which ones jumped out at you? Is there anything you can do today to put that tip into practice, and start building up your business’ bottom line?
Amanda Cullen helps small business owners to run their business better. She runs Business Made Simpler, which offers 1:1 coaching and runs monthly workshops in London.