4 Essential Tips to Make the Money Your Biz Deserves
In March, Nevica Vazquez and I hosted Pay Yo Self Money Month where we interviewed 8 incredible leaders about their money habits in business.
We learned that in the creative industry, people (and generally women) have a difficult time discussing money. It’s a sore subject that is seen almost as a taboo to discuss.
I believe that money shouldn’t be something we are afraid to talk about. Ultimately, we’re not running hobbies. We’re in business to make money so we can have better lives. I came from a long line of “I feel bad for charging money” mindset and it hindered me from being able to make a profit in my last business. Money isn’t bad. Making money isn’t bad either. Some small tweaks in how you think about what you do to earn that money are the essential tips to start ensuring that you are bringing in revenue your business deserves!
When women typically price their services (at least at first), it’s with trepidation, with apology for the amount, and lots of hesitation. Women who I’ve worked with have “felt bad” for her customer for charging money. It’s often because what she offers comes naturally to her (whether it’s photography, graphic design, or social media), she most likely has given her services to people for free in the past, indicating to her mind that people are unwilling to pay for said service – which is an incorrect assumption.
I’ve witnessed women who are so scared of talking about their prices that they will often not say the entire amount they initially decided on. Say for example you are a graphic designer who is pulling together an estimate for a potential client. You might decide that the service will cost $1,500. Instead of quoting the $1,500 price tag, you send the estimate that says $1,200 because you’re scared that they’d be offended or more likely to say yes to that estimate. You’re leaving money on the table.
You need to consider your time, taxes, your expenses and profit when you price your product. If you’re pricing based on what others are charging, you’ve already done yourself a huge disservice. You don’t know what your competitors pricing considerations are, what their process looks like or anything else they’re charging for or not charging for! Quit looking around and price your service and products for yourself!
2. Not understanding the value of her work
Women at various levels in business have trouble understanding the value of her work. This isn’t just an issue with women who are new in business. What does “understanding the value of her work” actually mean? It means, when you give somebody the service or product, what is the time/energy/money trade that equates to it? Money is simply a currency for fulfilling the other end of the value trade.
If your business is a “luxury” service, like wedding planning or photography, you still provide value, whether they “need” the service or if they “want” the service. It doesn’t matter. When somebody sees the value of the work, they will make the argument to themselves as to how they want it in their lives and make room in their budget for it!
When you understand the value of the product or service, you also stop under-pricing, becoming confident about your work and product and are able to talk about it in a way that gives others the confidence to buy!
3. Giving Discounts
Many of us have worked in retail or have grown up in malls. Discounts abound in malls and retail shops, right? You might not even go into a store without a “50% off today!” or a “semi annual sale!” sign. While big stores price their products with high profit margins that allows them to take half off a product, in the same breath, they’re training us as consumers to expect the sale, to wait for it and to not purchase at full price.
For small business owners, not massive retailers, you can do promotions for your clients or customers, but I encourage you to think about it differently. Instead of taking away the value of a product by discounting it, you can add value to the same price tag by adding something they’d love to have with the original product. So when somebody buys a social media consulting package from you during promo time, you can surprise them and give them an added bonus like a hashtag research workbook or by sending them a bonus notebook to thank them for their purchase.
4. Money Goal Setting and Projections
At the beginning of your business, it might feel difficult to make projections or setting goals for your business around money; things are influx and as you get your footing in the pricing and expenses category, it will become clearer.
But for more established businesses, it’s essential to make money goal setting and projections an important “to do”. Many creatives set a big goal for how much to make like, “I want to earn six figures” but fail to plan past that figure. What does that actually mean? Does that mean your personal budget is making six figures? Does that mean after taxes, you still have six figures in the bank? Does it mean that your business has a revenue before expenses of $100,000 or more? Do you want $750,000 or $100,00, that’s a big range! Get clear on what your goals are.
Once you do, break down how much you’ll need to make each month through a combination of your various revenue streams. Get specific, write them down so you can get closer each time you earn some money and know you’re getting closer to your goal!