Here’s what we’ll cover
Want more cash and more time? Working harder, longer hours? Doing more, selling more, dealing with more? You expected to have to work more as you grow your business, but it can get a bit ridiculous and sometimes we’re not sure whether the end is anywhere in sight?
And then there’s the money – where is the money!?
Today I’ll be talking about 4 things that could be going wrong in your business to cause a cashless but crazy state of busyness.
We’ll be covering;
1. Your pricing. 2 problems with offering services below your pay grade and I’ll give you a few tips on what to consider when you’re thinking about adjusting your pricing.
2. Your spending. Or more specifically, a lack of control or visibility into your cashflow.
3. You. We talk about 3 really good reasons why it might be time to systemise, delegate or outsource.
4. Your team members. We talk about what can go wrong, but I’ll give you a couple of tips to make sure you make the money you need out of your team.
Links and Resources
- Checkout the Simply Smarter Numbers website HERE
- Checkout the Podcast HERE
- Checkout the Instagram page HERE
- Checkout the Business Cash Flow Planner HERE
Keep Listening!
Here’s the shownotes
Working harder, longer hours? Doing more, selling more, dealing with more? You expected to have to work more as you grow your business, but it can get a bit ridiculous and sometimes we’re not sure whether the end is anywhere in sight?
And then there’s the money – where is the money!?
Today I’ll be talking about 4 things that could be going wrong in your business to cause a cashless but crazy state of busyness.
This 4 things are;
Your pricing
Your spending
You and / or
Your team
I’m going to go through each one of these in detail, let you know what could be going wrong, but also give you some tips to fix it.
1/ Pricing. Does it need adjusting?
If you find yourself attracting too many smaller, almost painful clients, chances are this work just isn’t as profitable as some others. This could be contributing to a cashflow pain and your busy state.
Or, if smaller clients are who you are targeting then perfect. My point really is that it’s up to you to know who you’re targeting and be prepared to say no to those that don’t fit the bill.
There’s two problems with offering services below your pay grade.
One problem is that you’ll attract ‘less than ideal’ clients who are after a quick fix. They’ll expect a lot, possibly complain more, they can also be difficult to upsell to. And at the risk of sounding super negative, that they are likely to be slow payers as well.
This is a trap we fall into at around the 1 to 2 years in business mark but we can’t remain there. Early on in business it’s easy to take anyone and everyone that will pay for our services but there comes a time you need to shake-off the ‘I’m a start-up’ or ‘I’m new in business’ mindset or label and free up these clients for the next start-up or newbie in your industry.
The second problem is that your ideal clients have money and they will judge you as being a cheap solution if you are a cheap solution. Hands up if you’ve ever been passed up for a more expensive competitor – it hurts! Especially when you know you were the better option in so many ways.
I know that I’ve passed up consultants in the past because they were too cheap. We couldn’t help but think, why so cheap, what are we missing out on by going with that person.
So, what can you do about it?
You guessed it – Review your pricing. Here’s some tips to help you in that process;
Tip number 1;
List out the amount of time and money you put into marketing, selling, delivering and servicing and bring that all to account in your price setting.
Tip Number 2;
That quick answer, quick response, quick design, quick contract, quick advice, quick template that you can provide – it’s only ‘quick’ because you’ve spent years learning by experience, studying or honing your natural skills and abilities.
So make sure you get paid for your brains, for your skills, for your natural ability.
Not for your time.
Tip Number 3;
If you feel uncomfortable with the price of your services – then you’re probably somewhere near it. And if you receive any pushback on that pricing – sure, be open to reducing it. But remove something of value when you reduce the price.
Tip Number 4;
Price your services based on the value you’re providing. Easier said than done, I know. The value you’re providing will be different for every client but here’s a couple of examples.
I provide business profit coaching for you not because you want to see a higher profit number on your end of year financials. But because that profit will mean you can buy a family home with a pool so that your kids who are edging towards their teens will want to spend time at home with you and they’ll hopefully bring their friends home so you’ll always know who they are with and that they are safe.
What is the value of what you offer?
2/ Lack of control or visibility into our spending.
Living beyond our means, expenses that aren’t kept in check, debt that we are paying down too quickly.
These are things that come up often. Mostly, this is all ok – if you want to spend more, let’s get you earning more!
The problem occurs when we don’t have the control or the visibility into what cash is coming in or going out. When you can see where you’re money is coming from and going to – as in visibility see it – right there in front of you, it does a couple of things.
It reduces cash related stress.
Cash related stress is a shocker. Other than our health or that of our loved ones, is there a worse kind of stress? You can reduce that stress or at least control it when you have visibility into your cashflow. And it can reduce the stress, not only for you but for your business partner or spouse, when they too, can see exactly what’s going on in the business.
Having visibility allows you to make better business decisions.
Growing or scaling your business can suck cash! Upgrades, new team members, rebrands, investments. You need to know if you can afford them and if you can’t afford them right now, when?
Having visibility also means you can quickly take advantage of opportunities when they arise. If the perfect premises comes up for lease and you need to jump on it quickly, knowing whether you can cashflow the lease reduces the risk and allows you to sign the dotted line quicker and more confidently.
3/ You’re the bottleneck.
Do you have a hand in everything? Can’t bring yourself to palm anything off? I’m calling you a bottleneck to be nice – but you’re really a control freak haha – I can callout control freaks because I’m one of you! It’s quicker to just do it myself. I want to learn how to do it first so no one can take advantage of the situation. No one can do it like I can.
Your answer is in systemising, delegating and outsourcing.
When it comes to systems, if it’s worth doing again – it’s worth making a system for it. Systems are really boring to talk about and really boring to implement. BUT they are sooo good at these three things;
i/ reducing your stress
ii/ giving you more time to do the work you love doing in your business and
iii/ they are really good at sitting you on the beach while someone else does the tasks that you have systemised!
You don’t need to systemise everything at once – maybe aim for one new system a week or even one a month – that’s still 12 new, fully functioning systems in your business by this time next year.
4/ Underperforming team members
There’s a lot of room to lose a lot of money in poor performing team members.
If you have team members, you’ll already have a good gut feel for those that are performing well and those that are not.
If you have client facing team members who deliver on your services, then clearly the time they take to complete a job will either add to your profit or it can suck the life out of your profit.
So, a brand strategist charges $10,000 for a job that should be done in 25 hours. They are expecting a return on time of $400 per hour.
However, the team member takes 35 hours to deliver the project. That’s 10 hours over budget. At $400 per hour this has cost you $4,000.
Why is the loss $4,000 and not just 10 hours at their hourly wages rate? Because you’ve now missed out on the chance to earn $400 per hour on another client’s work. Those extra 10 hours are gone, done and dusted. You can’t get them back.
And not only that, the next clients work is now late and banked up and you’ll probably have to step in and do some of the extra hours to make it up.
So a couple of tips to get this right –
Tip number one;
It isn’t always the team member that causes delays in getting work done. Find out where there is potential for delays and fix the problem. Is the technology inadequate? Are they following an old and potentially unnecessary process? Is the client holding up the process? Are you holding up the process?
Tip number two;
Consider having an ideal budget for time. Let your team members know about these and openly discuss them. Ask for their feedback on how to improve the time they are spending on jobs. BUT be mindful that too much pressure on time can backfire. Working on autopilot with time as a top priority can reduce the quality of the work, it can impact creativity and imagination.
That’s where I’ll end it today, be sure to checkout My Business Cashflow Planner at www.simplysmarternumbers.com/cashflowplanner
Wherever you are in the world, have a wonderful week.
