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February 13, 2020
Many small businesses dive into entrepreneurship knowing exactly how they’re going to serve their customers, where they’re going to work from, and with the ambitious goal of successfully running a profitable business. Often the numbers portion is left dangling without any clear definition. Your numbers, including the price of your product/service, your capital, revenue, and gross profit, are all extremely important to ensuring that your business is set up to achieve goals with enough cash flow to make it long term.
An accountant can develop your financial statements and offer advice on minimising expenses, etc., usually the decision on what to charge lies on you. You need to know exactly how much money you need to come in each month in order to cover all of your overhead and leave enough profit for you to survive. If that number seems a little high than you would have initially thought, don’t assume you need to sacrifice your own meals to make ends meet.
This is one of the biggest mistakes that a new business owner can make. If you’ve created an accurate price range for your services and you know your experience, education, and competitive position backs up that price, never apologise for charging more than what someone wants to pay. Like a retail store, people will walk in, look around, and walk out. The ones who truly value what you have to offer are the ones who still stick around.
As an entrepreneur, you should be focusing on attracting the clients who are going to appreciate the experience and dedication you put into your work. It’s tempting as a start-up to accept every job that comes your way regardless of how much they’re willing to pay. This can be detrimental in at least two ways:
Put your work in front of the audience that will understand that quality comes at a price. It will help to create a couple of client personas, fictional descriptions including names, age, business, etc. This will give you a better grasp of who and where you can find your target clients.
There are many techniques you can learn and refine in order to maximise your profits and allow yourself to develop strong professional relationships without charging far more than market price.
Interested in learning more about understanding your numbers and how you can develop a strategy that will ensure your business is still alive ten years from now?