As time has progressed in our company this statement has become never so more important than now. In a time where things are so unsure, we need to do exactly this. Working smart not hard.
We learnt early on that working 24/7 may bring in a little money to get you started but it does not build a stable future in your business. I think we all remember, when first starting our new business that we think we have to price low to win from our competitors. However all this does is create the infamous “race to the bottom”. When your competitors, many who have been in business a longer time and therefore able to afford to cut prices. So where does that leave you? cutting cost until you are working all the hours for little or no profit with no work / life balance.
This just leaves us feeling tired and stressed, an ultimately not very productive. So here are some of the things that we learnt early on, that we needed to move forward and grow our business not just work in it.
- Have an effective business plan
- Know your worth
- Understand your business
- Be clear about your costings
- Be proud and loud about your company
- Link with others that can help you grow
You need to have a solid business plan. If you don’t know where you are now and where you want to be, how do you know how to get there. Think of a business plan as your “SatNav” to steer you in the right direction.
When it comes to pricing your services, remember “know your worth”. By this I mean believe in your skills, knowledge and experience. Don’t forget everything you sell is because you have worked hard to source / build or invest your time and energy to create it. This is particularly important when you consider your USP. There may be 2 very similar companies selling services that appear, on the surface, identical. What makes you stand out, and what is the value of that uniqueness.
Most sole traders or SME’s will have a good idea on what there business is and what it represents. However, check you are fully aware of every aspect of what you offer, costings and the finer details that makes you what you are.
Now we have met so many companies who price according to their competitors. While I would not disagree that you need to be aware of what those around you are charging, do not fall into the pit of comparing yourself on price alone. So many companies, I have spoken to do not cost their expenses in properly.
- If you are not even covering your costs then how are you ever going to make a profit and grow your business.
- Consider ALL costs; for us that is not just fuel and wages. We consider EVERYTHING! This is the one thing that most new businesses find hard to deal with. Trust us, we were no different. Now we have learnt, and unbelievably it is not a huge cost to the client.
- Of course once you have discovered your break even point (no 2), you need to add on your profit!! I know, hard for some people to accept and feel good about. Just think you are in this to make a profit (unless of course you are a not for profit organisation). Yes you enjoy your work, running your business, but profit is not a swear word. It is not unreasonable to make a profit. This is also very important if you want to grow your business. PROFIT and GROWTH are not the same thing.
- Once you have your costing formula; cost + % profit = your charges
Never be frightened or embarrassed about “blowing your own trumpet”. You have worked hard. Also it helps promote your business to potential clients. One thing we have found incredibly useful recently is networking with Your Partnerships.
The one thing we learnt was that there is a right time and a wrong time in business for everything. You won’t always get it right, don’t be too hard on yourself, don’t give up. Seek advice. This is where networking is so good. There will always be others to ask for advice or bounce ideas off of.
When we started out, we had no money, no real business experience. We did things as money allowed. Such things as; getting our website, having a video made, business logo etc. Amazing all three of these things came from recommendations to other local businesses. Helping one another, particularly local businesses is an amazing feel good factor too. Just remember there is a right time to take the leap and a time to wait. Choose a time that is right for you……
If anyone would like to chat about our experiences, suggestions and recommendations or about how to join Your Partnerships https://www.yourpartnerships.co.uk/ or Silvatree http://www.silvatree.co.uk/agent (a modern bartering group that allows you to utilise your empty services and sales for other services you need – win win), book a chat with me; Nicola Hollis
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