There is no magic — get the basics right

Running, growing, developing your business takes hard work and focus. In cases for small businesses, getting the basics right and smart thinking is what’s missing, but makes the difference.

I don’t bring magic, I bring a plan, focus, structure and perspective….OK, and a little magic! I identify ways to sell your products/services for higher effective prices with less effort.

I am still surprised by established businesses struggling with the basics. All too common when the business has you running flat out just to stand still. There aren’t enough hours in the day to stop and think, therefore basics get missed. That’s how most businesses run, right?

Sadly yes but there is another way

Also a dawning realisation that the business, albeit busy with a nice list of customers and clients, everyone working hard filling every hour, is that there’s little profit. We’re busy but not making any money, why is that?

Often there’s three separate things happening –

The basic, you haven’t costed the product/service to start with. You are charging the going rate and others make money! Look at your costs against the price charged on paper, is profit made? Five times in the last three weeks, a quick look at one of a companies products and numbers has left the owner stunned, realising it doesn’t make any money. “well that’s silly I’d never do that” you say to yourself. All of the instances were highly credible with an intelligent owner simply drowning in their day jobs.

Know your product or service numbers, then you can make changes and ensure you start to make money. Set yourself target profits on everything you do, 10%, 15%, you decide, but build it into the costed product upfront. Everything sold should have this as a basic profit. The only exception can be something at a lower profit, if strategically the sale opens the door to more interesting opportunities.

Secondly, cost the client. Run a P&L on them, particularly for a service. Challenging customers can take more time, have more questions, require more attention than planned. If this time is more than factored into the price, profits dwindle and quickly become losses. Ensure you take this into account in the price and make sure you control the time!

Thirdly, what gets missed most by business owners. Including the cost of the business in the product pricing. Overheads are all the running costs that are there even whilst you reading this article! Calculate overhead rates for your business, include in the price calculation.

Get your pricing right for each product/service or customer, ensuring profitability over full costs of running the business.

Next time we’ll look at pricing around overheads, how to work it out and designing the business without you in it, so you have the time to plan growth!

If you would like help making sure your business makes the profit you are hoping, contact me for a free discovery session.