Archive for Finances
Cheap, Cheap, Cheap…
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Are you too cheap?
I read an excellent post this morning by Kathie Thomas about being a VA doesn’t mean ‘cheap’. Kathie makes some very good points, especially about charging enough so you can meet your cost of living.
There seems to be an attitude among business mums and WAHMs in Australia where they seem to be afraid to charge for their services. And, on the flip side, they seem to expect other businesses to put their prices lower simply because they are a business mum or WAHM.
Just because we work from home, doesn’t mean we have to do everything free or cheap. We are running a business to earn an income.
Melinda Brennan over at SuperWAHM created a WAHM Manifesto. This is free and well worth a read. Among other things, the Manifesto states that “Every WAHM has the right to earn a decent income”.
So, are you undercharging for your services? Are you too cheap?
If you’re not sure, try raising your prices slightly and see what happens. You may be pleasantly surprised.
----------------------------------------------------------------------------- For your daily dose of business mums websites and blogs, check out Business Mums DailySales - helping or hurting your business?
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Sales - are they helping your business?
I see so many business mums have sales - whether they are Facebook garage sales, end of season sales, or some other sale - whatever they are, there are new sales cropping up all the time.
Are these sales really helping these businesses?
One thing that sales can do is teach your customers not to pay you full price. I know I head down to K Mart whenever there is a children’s clothing sale, rather than paying full price. If your customers know you will be having a sale at a regular time, they may wait to buy from you until the sale starts, especially if you have a lot of them (like K Mart does).
Another thing I’ve noticed with sales is the prices barely cover the cost of the product, let alone the business owners time or any other overheads associated with running a business. Some sale prices look like they are below wholesale!
There is nothing wrong with the occasional sale or special, or putting end of season or end of line items on sale to clear them out, it’s more the regular sales that will cost a business in the long run.
Before having a sale for your business, think about why you are doing this and what you want out of it. And remember, you still need to make money out of it! Set a budget for your sale to make sure whatever your sale prices are, it’s not costing you money.
Everyone loves a sale and love buying things on special, however you don’t want your reputation to be sales all the time or your customers won’t pay full price.
----------------------------------------------------------------------------- For your daily dose of business mums websites and blogs, check out Business Mums DailyBusiness Expenditure - some things to think about
Posted by: | CommentsA question I often find on forums and blogs is “How much money should I spend on marketing?”
Generally the answer received goes something like this: “How long is a piece of string?”
Over at Super WAHM, Melinda Brennan has blogged about just this topic, giving a fantastic answer. You can read her post here.
Unfortunately, there is no one size fits all answer to this. Everyone’s answer is different as each business is different.
If you need help creating a budget for your household, and/or your business, then check out Budget Bitch. She has some great tips and can help you create a budget.
Along with this, having a marketing plan will help you work out what you are budgeting for. The Marketing Coach has an excellent service where they can help you with your marketing plan, looking at the different places your target market visits and help you work out the best way to get in front of them.
I hope this gives you some idea to help you with your business. Another thing to remember is to review your business expenditure regularly, you never know when you may be able to save money on your expenses.
----------------------------------------------------------------------------- For your daily dose of business mums websites and blogs, check out Business Mums DailyAre you charging enough?
Posted by: | CommentsI thought I’d share this blog post with you, it’s called “Top 10 signs you may be charging too little“.
As well as giving me a laugh, it also makes a good point, and something that many business mums have problems with - that is they undervalue their time and skills. And yes, this is something I do too.
Many business mums say “but I’m just a mum” or “but WAHMs can’t afford me if I put my prices up” or any number of other excuses.
It is important that business mums value their time and expertise. After all, people are paying for what you do, so it must be worth something to them.
While I’m on the topic, head over to SuperWAHM and download their WAHM Manifesto. It is a free download with no strings attached. It is worth a read.
----------------------------------------------------------------------------- For your daily dose of business mums websites and blogs, check out Business Mums DailyHobby to Business - be mercenary
Posted by: | CommentsOne thing that I’ve learned over the last little while is that in business, we need to be mercenary, after all, aren’t we in this to make money?
This is not to say that you stop giving out free information and doing other tasks that don’t immediately make money, but evaluate everything.
At a coaching session on Monday, one of the participants mentioned that she needs to do 3 billable hours a day in order to reach her budgeted amount each week. With that in mind, she evaluates what she is doing and if she’s spending too much time on other things, she can pull herself up and concentrate on her billable hours and then goes from there. Once she has done her minimum of 3 billable hours, she can then move on to other things.
I thought this was great advice, and am trying to work out how I can apply this to my business. But I know my focus must be on the things that make me money, rather than the things that are great, but don’t make any money. For those things that don’t make money, I’m looking at how I can change that so I can keep doing them, but have them pay for themselves.
So, when you’re turning your hobby into a business, evaluate what you do each day and ask yourself “Is this helping me make money?” If it’s not, look at how you can change it.
Hobby to business - Pay attention to the money
Posted by: | CommentsWhen you are moving your business from a hobby, one thing you need to do is start paying attention to the money. Invest in a good accounts program that will give you reports, so you can make sure the things you do are making you money, not putting you in debt.
If you find that a product or service is costing you more money than you are making, look at it critically. Are you able to change things so you can make money - such as change suppliers to someone cheaper or bring in more customers? Or is it something you should stop doing for a while or completely?
Another thing to keep an eye on is cash flow. Is there a way you can improve this? Recently I added an option for membership to be paid monthly. This is helping my cash flow as I know a certain amount of members will be paying their membership each month, so that is money I can count on.
There are many other reports and you will need to look at the ones that are most useful to you. Some people recommend you get these reports weekly. When you are starting out, however, monthly reports may be enough to gvie you an overview of how things are really going.
Hobby to Business - review your suppliers
Posted by: | CommentsFor the last 2 years, we have had a very slow Internet that was expensive. I spent most of the day yesterday looking for a new broadband provider. Anything would be better than what we were on. I found one and we are changing over as soon as we can. It will save time and money.
One of the things you should do when moving your hobby to a business is look at your suppliers and make sure they are saving you, not costing you money. Shop around and find the best deals - in many cases, this is not for your stock, rather the other support products and services you use in your business, such as the Internet connection you use.
Remember, though, that price isn’t everything. If you find you are with a cheaper web host, for example, and find your shopping cart doesn’t work all the time, costing you clients, then it may be time to upgrade to a more reliable, though possibly more expensive web host.
Other things to look at are things like your mobile phone, postage and delivery of your products, packaging, post office box, and travel costs. By reviewing these things, you may be able to find a better alternative that will help your business grow.
Financing Your Business
Posted by: | CommentsFollowing on from last weeks post and all the great suggestions, I’ve decided to do it every Wednesday. A prize will be offered for the best suggestion and the winner will be announced the following week. For the winner from last week, look at the end of this post.
One of the most comment reasons I hear for people not starting a business is money - they don’t have the money to buy all the stock they want or get their ideal website.
If you know my story, I started the Business Mums Network with $100, and built it up slowly.
There are many ways you can finance your business. My question today is how did you finance your business? Or, if you don’t want to share that, what are some creative ways business mums can finance their business?
This weeks winning comment will receive a copy of Raising a Business by Sonia Williams.
The winner of last weeks comment is Sascha from Activ8 Change. Congratulations Sascha, we will get your CD out to you in the next few days.
Thursday Tips - meet your bank manager
Posted by: | CommentsThis morning I had a meeting with my bank manager. After nearly 7 years in business, I had never spoken with anyone at the bank about what we do! I had only ever opened accounts and deposited money over the counter, all other transactions were either through Internet banking or via the ATM.
So, I finally made an appointment.
It was a general meeting so I could tell them about my business and, going forward, start exploring ways the bank could help me grow my business.
The meeting went really well. There may be some advertising money coming our way for the conference and there may be other projects we can work on together.
There may also be opportunities as the business grows for reviews on my account so I can get a better deal there.
So, all you business mums, make an appointment to get to know your bank manager or business banker - you never know what will come out of the meeting. Remember, the bank is there as a tool for your business, not just somewhere to deposit money!
Thursday Tips - Definition of profit
Posted by: | CommentsMany business mums are unsure what people mean by “profit”. Is it money made on each sale? Is it money after you have paid yourself? Is it something else?
Tash over at Word Construction has written a great post on her blog explaining profit.
As Tash says in her blog:
“Simply put, profit is the money left over once you have paid all your business expenses. Or you can view it as profit = turnover - expenses.”
You can read the full post here.
