Author: dawnk

It may be time for a (little) pivot.

Be honest, are you feeling stuck? Been selling the same things in the same ways for a while and it seems like sales are getting a little stagnant? Or maybe you are seeing an opportunity in your industry or area that you think you need to explore.

It may be time for a (little) pivot. 

The concept of the business pivot is not new, I learned about it several years ago when I was in the Syracuse University V-WISE program for women veteran entrepreneurs.  Traditionally a pivot is a term to describe a strategy to turn a business when the current business model isn’t working, a plan “B” if you will. 

But I also see a pivot as a strategy that can aid expansion of a business. I don’t think a pivot is only a plan B, but can be a business strategy for small turns, little twists that steer the business to look in an additional direction.

Entrepreneurs are, by nature, change agents. Known for figuring out ways to do things better, ways to take calculated risks. We are also known for continually searching for the “next thing.” I believe that using a simple pivot analysis can help you find the next move for your business.

Again, I don’t ascribe to a pivot as something to do only when things are going wrong. I believe that a little turn deserves a pivot analysis, so risks can be weighed in a structured, but simple, way.

Use this three-step process to discover your next business move:
  1. Commit to use openminded and unfiltered brainstorming. For best results, use the recommendations by Jennifer Jackson of Lucid Chart and just get every idea down on paper, and edit later.

 

2. Use My “ADFP Formula.” Answer open ended questions about your Audience, Delivery, Focus, and Processes to discover those places to improve, serve, and expand. Get the Free Workbook with the ADFP Process and questions to ask by visiting here.

 

3. Use market research to explore ideas. Don’t just throw out unusual ideas as bunk. Do a little market research to see if there is a fit. There are all kinds of free resources online to help you. Don’t forget to look at adjacent industries and at your own industry for ideas and changes going on that can support your ideas.

 In my own business I’ve generated tens of thousands of dollars in sales with a single product in just a few months. That product was a pivot from our main offering, and it launched a completely new line of revenue that brought us a host of new buyers. Some of the best business moves are those that seem to be a natural twist or progression. A pivot doesn’t have to be dramatic to impact your bottom line positively.

Growth and bottlenecks often cycle together. Most entrepreneurs want their businesses to grow, and many want them to grow quickly. Conventional thinking is that fast growth means more success. Truth is, that there are spots in a growth cycle that need to be navigated carefully to make sure your new level is sustainable.

 

Growth changes a few things; capacity, financials, and time commitment.  Anywhere there is a constraint on the business flow, a bottleneck shows up.  A bottleneck inside a growth cycle is the place where there is rapid growth requiring one or all of these three things at once. It strains capacity, money, or time, and there is a “squeeze” on operations as the business adjusts to its new size and scale.  

 

Failing to recognize and navigate a bottleneck smoothly can damage your business. And damage your reputation, if you are unable to deliver your products and services to meet customer expectations.

 

Convoy Road Coffee Roasters is navigating such a squeeze as we continue to grow our customer list, meet the requirements for a Department of Agriculture manufacturer’s license, and get ready for fourth quarter events and holiday gift giving.  These events combining together are affecting our operations, and finances.  We recognized early the constraints that showed up and the resources required to get to our next level of growth, which is basically $100k/ year.

 

It’s About Time and Money

 

First, here are the squeeze spots. The money we are spending bringing our facility up to the requirements for our license is not available for the additional coffee beans our growing customer base is ordering.  Our rate of growth is also requiring more and more stock. We must be purchase raw coffee in 65 pound and 135 pound bags. While ordering 130 pounds served us in June, we now need over 200 pounds a month to keep up.  Those are current money constraints. Competing financial interests; license and stock, and the need for more stock every month.

 

Another squeeze spot is on our time. The events we have on the calendar, plus the upcoming holiday gift demands, will require many more hours of roasting and packaging than we have now. Our little roaster used to average about 35-40 pounds a week with a few longer bigger days, now we averaging  75 ish pounds a week with a few longer, bigger days. That’s a big jump. Not only on our time, but we need more bags, labels, and the time it takes to do all of those additional tasks. We may have to hire some part-time help soon. Which of course leads again back to money.

 

Every decision we make right now is made after considering its effect on our growth plans and how it can help us navigate the current bottleneck.  And honestly, I have been a little unsure of myself for the first time in quite a while, having to work hard at not falling back into my default mindset pattern of being afraid of making a mistake.  We also know that this won’t last forever and expect it to resolve by the end of October.

 

Expect Bottlenecks at Every Stage of Growth

 

Bottlenecks can happen in every business. One place I see it is with people who are scaling their side hustle and leaving their full-time job. Constraints on time before the switch can be challenging and constraints on money in the first few months after the switch are not uncommon. During various stages of growth, you will see them in your own business.

 

The best way to navigate bottlenecks in your business is to first expect them and then be able to recognize them. I always expect a bottleneck at every stage of growth. They don’t always happen, but I am never surprised if they do. For growth to be sustainable, you have to expand across operations. That requires more investment of time and money, and your new business capacity could require team, equipment, and new operational services.

 

As for recognizing the bottleneck- look for the constraints before you feel them. We were able to predict the financial squeeze to some degree.  We researched the licensing regulations and the expense involved in converting our facility. So, we were able to project the amount of cash we would need, and how much it would affect our operations over what period of time.

 

Knowing Your Numbers Will Help

 

It was surprising, however, by the amount of the financial squeeze.  This is because I hadn’t expected the amount of customer growth we also had during that time. But we knew our numbers, and we were able to respond quickly. We recognized we were headed for a cash squeeze before it hit.  Knowing your numbers is an important part of being able to recognize and respond to the beginnings of a bottleneck in the growth cycle.

 

Whether you are preparing to scale, or in the middle of a growth spurt, be mindful of the constraints. Watch your time, money, and capacity.  Remember that bottlenecks are temporary, and cash is king. These growing pains are a good sign that you are in the right market, with the right audience, and in demand for your products and services. Respond, don’t react, to growth in your business and always keep your eyes on the vision you have been given.

Ready for support with your growth? Join the Success Studio mentorship program. 

Holding the vision can get tough. Why did you start the business you did? I mean there are thousands of products and services and hundreds of business models- so why did the one you started resonate with you?

 

How did the idea just drop into you? What was your vision? What did you see and how did you feel?

 

I love to revisit these questions when things don’t seem to be going very well in life or business. When there’s a cash flow issue. When things are out of stock with suppliers or deliveries are late. The times clients pay late or have to drop out of programs. And when I start to question what it is that I am actually doing here.

 

We’ve all done it at one time or another.

 

I want to see the progress, and I want to know that I am on track. But the truth is that progress isn’t always linear or predictable. There are twists and turns, and sometimes you go in an entirely different direction from where you thought you would be.

 

What doesn’t change is the vision.  The vision you were given when you started.

 

Holding that vision when you are down to your last $200.00 isn’t easy. Neither is holding the vision when you can’t make a deadline, or you don’t sell any spots in your program. When you start to feel defeated or like you are doing something “wrong” it is easy to lose sight of what you were given. Where is the evidence that you are even on the right track? Am I right?

 

But your vision wasn’t given to you by accident. It has taken me a long time to understand this, but your vision is divine. It was given to you, and your job is to bring it to the world.

 

So, how do you hold the vision when things don’t seem to be working? And why is that important?

 

  1. Understand firstly that your vision is unique to you.

 

You’re bringing something to the world that is uniquely yours. For example, I was given the vision of the Breakthrough Number and the content for the book, The Profit Accelerator for Small Business.   There are thousands of other business books and business strategy approaches out there, but mine is uniquely in my voice and intended for the people who it resonates with.

 

Your products and services are uniquely yours. The way you deliver them. The way you serve your customers. People are destined to hear from YOU, learn from YOU, become YOUR clients and customers. Because you have YOUR unique point of view, and only YOUR voice. 

 

I believe you aren’t reading this article by accident. You may never read another thing written by me, or you may become a client in the future. I don’t know what our interaction is meant to be. Or when. In the same way, people you meet, and those who do business with you, are not there by chance. I no longer believe in coincidences. I believe everything is just too interconnected.

 

And you’ve been given a unique vision to bring to the world; your gifts, and your talents. If you are an entrepreneur you are doing what 85% of the world won’t. That makes you rare also. Embrace this about yourself and holding the vision gets easier in the tough spots.

 

  1. Be open to receiving the opportunities that support your vision, especially the unexpected ones

 

When unexpected opportunities show up, and you are open to receiving them, they can help you hold the vision when you struggle. I’m sure you can think of at least one example of the sale that seemed to come out of nowhere or the perfect referral right when you needed it.  It may be that you saw something and had an idea that worked out and felt like luck.

 

There are also far too many stories of unbelievable things happening “at the last minute” or “at the right time” or “unpredictably” that support the overall vision for the business but maybe not in a linear or conventional way.  The key here is to be open to taking action as different things are put in front of you.

 

Opportunities may not always show up with an obvious cause and effect. You may meet someone who gives you a direct referral, or you may meet someone who doesn’t use your product or service but interviews you for a podcast, and their listener reaches out to you. You took the action by sitting for the interview and getting your message out, supporting your vision for your business.

 

When these unexpected opportunities arise, and you receive the benefits from them, they are confirmations from the Universe that you are in alignment and in your purpose. As you continuously stay open to being surprised and allow these types of events to reaffirm for you that you are exactly where you are supposed to be, you will suffer less when struggles inevitably happen.

 

  1. You must look for the evidence, allow the evidence to build on itself, and you must be willing to use it to help you hold the vision.

 

I am not by nature a trusting person. I struggle frequently to remind myself that the Universe is only working for my highest good. And I need to see the evidence, or more accurately, I want to see the evidence, that I am on the right track or to know that I’m “doing it right.”

 

When I was working with Emily Williams and I was struggling with the vision inside Entre Money Coach, she had me write down 100 things that had gone “right” in the previous six months. What an exercise! I couldn’t believe the list. I “only” got to 74, but it completely changed my perspective.

 

There was so much progress and I had so many wins. It completely confirmed the vision I was given as a business consultant. Interestingly, it didn’t confirm the brand, and I am transferring to just using my name now, but the content is the same.

 

Using our coffee company as an example, I let the evidence stack up as we started, and each brick helped us to keep going.   For example, My first Facebook post sold 11 bags of coffee. Our Facebook group is growing every month. People are reordering our Morning Blend.

 

During our third month of business we went a few days without an order, we used these bits of evidence that the vision for this company was not a mistake, and we held that vision.  We believed that the orders would always come in and that we were meant to start this company.

 

In only 5 months Convoy Road Coffee Roasters was a $50k a year company. From nothing.  Now, I keep all the evidence in front of me and let it build, while I build my trust muscle by keeping track of the magic that happens too.

 

Keep the vision in front of you

Things happen in life and business that aren’t always favorable. In fact, sometimes they downright suck. We lost our first business back in 2013, but I always knew I was meant to be an entrepreneur. Interesting that I never saw myself with a products company, but here we are.

 

Holding the vision when things are down is a mixture of knowing that your vision is uniquely yours, given by the Universe and not a mistake, you are exactly where you are meant to be, and being open to letting confirmations come in and the evidence stack up on your journey. When you are ready for more, check out the Success Studio mentoring program. 

Admit it, as entrepreneurs we have full plates. And for anyone running more than one business it can get very overwhelming quickly.  So why not add flexibilty with a weekly task list?

If you sometimes look up at the calendar and realize you forgot something, and it is a task you are supposed to do each week, (hello social media post to promote the blog), I have an answer for you.

 

Add Flexibilty With A Weekly Task List

Imagine creating a simple tool that helps you remember the things you have to do around your business and life. This tool tracks the repeatable tasks that can sometimes get missed. Imagine having this list of tasks that you need to do every week. By using this you can add flexibility with a weekly task list.

 

I created such a tool for my life and business (es) and it has been a game changer.  The key is that the tasks can be done generally any time during the week, as long as they get done. Because I am a pen and paper kind of girl and love the feeling of checking a box or crossing things off a paper list, I created a single list of tasks on my computer in Word, and I print off a fresh sheet every week.  

 

 

Here are a few of my tasks:

  • Create the soundbite for the next podcast episode
  • Promote the blog on social media
  • Make sure to pre-label 50 12oz coffee bags (put the logo and “roasted right” labels on them)
  • Print 25 Thank You Cards for shipped coffee orders

There are a few more, but these are tasks that support both businesses. If I have time on a Friday afternoon and I want to pre-label bags, or print the labels, I can do that.  If I have 45 minutes between calls and I want to create the soundbite for the podcast, I can do that too.

 

 

To create my list, I tracked all of my repeatable tasks for two weeks, writing down the things I had to do, then formalized it into a pretty document I like to check off. I also leave a few blank spaces on the sheet for the one off “miscellaneous” tasks that I need to get done in a given week. 

 

Having this list has not only helped with remembering all the little tasks but has also helped with procrastination. Many of these little tasks are kind of boring, or repetitive, and easily forgettable. Having a list in front of me also allows me to choose what to do and when.  Supporting good time management. It also allows me to know each thing on there is important for my life and business.

 

 

In a strange way this list has become kind of a game to see what I can “squeeze in”. That flexibility also reduces stress, because I don’t end up trying to get everything done at the last minute. I print off my weekly task list every Friday.   If you struggle with things falling through the cracks, give this a try, and please, let me know how it works for you!

 

Should you need more resources for your business, check out my free resources!

 

 

I get this question a lot from my clients because wholesale products require the sharing of profits with the retailer, so the margins are lower in your business. While it isn’t right for every business, I have helped several clients with very successful wholesale and consignment lines of business that rapidly grew more income, greater audience following, and ultimately a larger retail base.  Here are a few reasons that wholesale and consignment can be great for your business.

 

 

 

Wholesale Products: Larger orders than individual sales

 

When any customer buys you should do a happy dance. But when a wholesale customer buys it’s a bigger order and a bigger happy dance. If a customer buys one, a wholesale order can buy 12. Even with the loss of margin, you have more volume, and you make more income.  Just make sure your numbers are right on the wholesale and retail prices.  Know your production, packaging, and labor costs.  I have several clients with retail margins over 60-80%, so wholesale margins are still beautiful even sharing 25-40% with a retailer.  Take the time to build a solid relationship. Give them the product knowledge and watch how your business customers begin to promote YOUR product when people ask for suggestions.

 

 

Wholesale Products: Introduction to their audience

 

And the reason you don’t mind giving margin to the retailer is… because you are being introduced to their audience! They are paying for their storefront, labor, overhead, etc., and you get to be an option for the customer base they spent time and money building.  They are making something, and you are still making something. It is a win-win. You get shelf space, physical or virtual, and the visibility.

 

 

Wholesale Products: Reordering more frequently

 

Another aspect of wholesale is that there are more frequent orders from the buyers. Individual consumers buy maybe a few times a year (depending on the product) but businesses are going to order as they are selling. A key here is to be organized and to be a great account manager. Know the business owner’s intentions with your product. Learn what is selling and what isn’t.

 

Again, build that relationship. Make suggestions, call, and ask for the reorder (don’t make them run out first), and for the love of all things holy, don’t take it personally if an item isn’t a hit with their audience.  The reorders from a business are generally larger than an individual order, so more volume, more income, more chances to serve the business owner and their audience.

 

 

Converting fans to direct retail

 

This happens frequently. After a time, the customer may begin to order directly from you, at retail.  This happened to us with the coffee business. People bought our product from a local store, then joined our Facebook group, then directly ordered from us.  I’ve seen this happen with several clients of mine as well.

Make sure to have your website or online store on your product label.  But please note: DO NOT undercut your wholesalers with deep discounts online. It’s very disrespectful and will cause you to lose wholesale business fast. The retail price is the retail price. If you buy from me, from them, or from the other them. The ONLY time I’d think about discounts would be if something is discontinued or you are discounting wholesale as well, the margin remains the same for the retailer.

 

One last thing, consignment can be a great way to test out a relationship with a potential wholesale customer. Offer to let them try it out in their business for a time, say 30-60 days, and after it sells out, you would be happy to have them as a wholesale customer. The difference is that on consignment you are paid only after an item sells. In a wholesale account the business customer owns the item once they are purchased at the wholesale price.

Rule almost number one: get it in writing. Running a business without written business agreements puts you and your clients at risk for misunderstandings. It puts you at risk of not getting paid. And further puts you at risk for chargebacks, where the client goes directly to the credit card company and claims fraud after receiving services. Without a written agreement, you will likely have to refund any money you’ve received, even if your policy is “no refunds.”

 

All About Business Agreements 

 

The truth is that contracts, or as I call them business agreements, do not have to be complicated, written in legalese, or 20 pages long to be enforceable. What they need to be is yours, not someone else’s copy/paste, clearly written, including all terms, and signed.   When I say do not “copy/paste” someone else’s, I mean do not copy/ paste. There are formats online you can follow, but don’t include things you don’t understand and just change terms just because they have it in theirs.

 

 

Here are the main things to include in your business agreements.

Business agreements:  Be Clear and keep it simple.

Nobody likes legalese. Nobody. Drop the “whereas” please. Just say it clearly and keep it simple. If the program lasts six months, it lasts 6 months. If there are 4 monthly payments, say that. People want to know what they are signing up for. It doesn’t have to be fancy, lengthy, or in legalese to be enforceable. You can have a legally binding agreement written on a napkin in a bar (there’s a law case on this!), not that I’m suggesting that approach.

 

Business agreements: Include QTIPS

 

The specific terms need to be spelled out. You can use QTIPS to remind you to include these things:

 

                Q: Quantity  (6 sessions, 2 bracelets, 5 massages, etc.)

                T: Time of Performance (15 days, 6 months, 1 hour)

                I: Identity of the Parties (You and the name of the client/ customer)

                P: Price

                S: Subject Matter (what are they specifically buying? Coffee? Coaching? Copywriting?)

 

When you include the above terms of your agreement, there isn’t much room for misunderstanding. Just make sure you are specific. Don’t say “fruit” if you mean “orange.” It can be a single sentence, “This agreement between Me and You is for Six 30-minute life coaching sessions over 6 weeks for $350.00.” All the terms are there. You know what you are giving, and they clearly know what they are getting.

 

Business agreements: Spell out the policies

 

This is where people often leave out things that come back to bite them. If you have a no refunds policy, you must put it in writing, in the agreement with the terms, and have it signed. If you offer refunds or replacements within 30 days, it must be in there as well. The policies are the actual guidelines within which you run your business. If you require a deposit, if you require pay in full before a VIP day, if the customer pays shipping, you must let your people know this BEFORE they complete the purchase.  

 

Many times, I see entrepreneurs who have policies develop only after an incident. You must be more intentional than that.  Walk through the customer journey in your mind and find the sticky spots where they may have a question or an issue about your product or service, and how you want to resolve it.  If someone doesn’t like your policies and chooses not to do business with you, trust me, it is far better than the bitter dispute with the credit card company over the chargeback later.

 

 

Business agreements: Get any changes in writing

 

If you make changes, and they do happen, just put them in writing and sign and date them. “You and I agree to change our agreement to include XYZ.  This change is effective immediately.”  Do not rely on the memory of what you said on the phone, and the out of context email isn’t any better. Take a minute and “memorialize” the change.

 

 

 

Business agreements: Be prepared to enforce the agreement

 

This is the part of business nobody really likes, but this is the reason you have written and signed agreements. You must be prepared to enforce them. In my own business I allow people to pause coaching for a month or two if life happens, because I understand that life happens, but we don’t just “cancel” the agreement because life happens. We pick back up and finish out the terms of the agreement. I’ve never had to actually go out and enforce anything, because I have great clients, but if that day ever came, I will. This is business. My livelihood depends on my clients keeping their word, and their own business growth and development relies on it too. You must view this from an objective place and understand that if your clients don’t keep the agreements, your business could go under. Be stronger than that.

 

Finally, having an attorney look over your agreements is a wise decision. I don’t just say that because I have a law degree. Attorneys went to school to spot gaps and look for language that is written in a way that can be interpreted differently than you think it means or is ambiguous.  If you are skipping the attorney for now, but don’t have written agreements, set aside time to follow the above steps and get your agreements together now.  

When you are ready for business mentoring that covers the mechanics of contracts and agreements, check out the Success Studio. 

Here is the final installment in our “financial tips for” different industries—Financial Tips for Your Side Hustle. This article is for anyone building a business on the side of a full-time job or on the side of another business.  Creating a side business and growing it to allow you to replace your 9-5 and go full time into entrepreneurship is an exciting journey. Here are a few financial tips to help you make that happen.

 

 

Start Your Separate Personal Financial Identity immediately

 

From day one, treat your business as a business. Separate your banking, get a debit card for business expenses, and have all income from all sources deposited into the account. Just point your PayPal, Stripe, Square, or whatever you use to the business account.  Pay your expenses from that account. You will file a different tax schedule when you own a business. Keep receipts and treat it like the real business it is right from the start.

 

 

 

Have a Pricing Strategy That Gets You Into Profit Quickly

 

Many times, when entrepreneurs begin side businesses they start off with pricing that is often too low to make much of a profit. This can be because there is the feeling that the venture is for “extra money,” so making even just a little bit is “fine.” Yet, the best strategy is to be priced correctly from the beginning, so you aren’t just breaking even or worse, losing money with your side hustle.  You are in business to make money, and that means pricing yourself to include your real costs, your paycheck, and some profit to make sure you have capital for growth.  Follow this link (Mastering Your Cash Flow (kartra.com)) for my free three part pricing formula.

 

You don’t have to lose money the first few years in business. See this blog post (5 Tips for Maximizing Business Profits (entremoneycoach.com)) more tips to maximize your profits.

 

 

Set up for your Self-Employment Taxes and pay them at least quarterly

 

Part of treating your business like a business right away is to set yourself up to file your taxes as a business. In the U.S. if you are a sole proprietor that means a schedule C.  When you file that report of self-employment you will need to pay your self-employment taxes. Make it a habit from the start, and you will always be in compliance with the IRS. I learned this lesson the hard way, and ended up owing over $27k in self-employment taxes back the year of my husband’s accident when we lost our consulting business.  We did not set ourselves up, and taxes were an afterthought. Oops.

 

It’s easy to set up to pay your taxes online, visit https://eftps.gov and register. They have to snail mail you a PIN so it takes a few days to set up, but once you are enrolled you can easily make online deposits into your “tax account.” You should deposit 20-30% to start, based on your other job, tax bracket, etc. Visit your accountant to figure out exactly what is best for your situation. But just do it. I withhold when I take a paycheck, I don’t even wait for quarterly anymore!

 

 

If you are going to scale and leave your 9-5 have a plan

 

As you are scaling and building your side hustle to become your full-time gig, I always recommend having a plan. It won’t be perfect, and it will probably change, but you should know your numbers, have some money squirrelled away, and keep debt down so that the payments, if any, are manageable on your new entrepreneurial salary. Plan your income and profit each quarter, knowing how much you need to make to pay everything, including yourself.

 

And know that sometimes businesses take off faster than expected, sometimes they take longer.  Have a real conversation with yourself around what the minimum number of sales or clients you have to consistently have to make a move. It doesn’t always have to be a calendar date! Make your plan around events that happen inside your side hustle and celebrate every milestone.

When you are ready for business mentoring to grow your side hustle into your vision, check out the Success Studio!

For the past few weeks, I have been doing a Financial Tip series. This week, we will be focusing on Financial Tips for E-Commerce Sellers. In this blog, we will tackle 4 topics that would allow E-Commerce sellers to take their businesses to the next level. 

 

 

 

FINANCIAL TIPS FOR E-COMMERCE SELLERS

 

 

Know what you are REALLY being charged to use the platform

 

If you are using a shopping platform such as Etsy, Poshmark, Shopify, or E-Bay, know that there are considerable fees that can be a part of each transaction. If there is an embedded payment service, there are transaction and interchange fees for taking payment. Then there are fees for listings, advertising, and renewing items on the platforms. These are common, and the cost of doing business with these services. Just know what they are. I had a client one time on Etsy who ended up paying almost 40% of an item with advertising (someone bought through the Etsy ad link), listing, shipping, and payment. When we looked at the numbers she didn’t realize it was so high.

 

 

 

Get your shipping down with pre-paid services

 

I got this tip from a friend of mine who mails out about 100 packages a week! There are places to buy pre-paid labels for the postal service here in the US to get shipping costs down. My husband has used Pirateship (Free USPS shipping software | Pirate Ship) to ship some packages from his coffee business, and it saved his customers anywhere from $1.50-$4.00 per package. That’s significant!

 

A few others to check out are:

 

If you are reading me in the US, another thing to do is to contact your local business development specialist at the United States Postal Service. They can give you referral codes for vendor partners to create your shipping labels at no cost! My husband had a short conversation with our local post office and had promo codes for five vendors the same day!

 

 

Maximize profits with good pricing 

 

I frequently see pricing mistakes in this industry, and often it is because entrepreneurs just double or triple their wholesale costs. It would be better, and more accurate to do a breakdown of operating costs and labor that should be included above the wholesale price of an item. Finally, I like to see an added profit margin.  If you need a good pricing formula for any product or service grab my free resource.

 

Often times I see labor as a sticking point in pricing goods.  If you are a reseller, don’t forget to include the time it takes you to shop, take photos, upload and list items, and pack them, when you calculate pricing.  If you are selling items that you make, know how long it takes you to create the item you sell, and make sure that is considered above your operating costs and the actual wholesale cost to make, photo, list, advertise, and sell the item.

 

Once you figure out your operating costs, please include the costs of using the platform that we talked about above, consider adding a flat labor cost to every item, and then a flat profit amount. For example, you can add $10.00 to an item to cover labor and profit above what you need to recover to make the sale. If that isn’t enough, you can go up, if it’s too much, you can go down.

 

Keep excellent transaction records

 

Another key to ensuring you are maximizing profit is to keep meticulous transaction records. If you need to pay to relist the item, that additional fee is coming out of your profit margin. Know exactly what to pay for everything you make and everything you sell. If you paid $23.00 for a designer item to resell on Poshmark, you need to record that amount.

 

Estimating what you paid or what it costs to make something is an easy way to lose money in your business. What you paid is the starting place of your pricing structure to make money in this business. You can use a spreadsheet, just a notebook, or some software, whatever feels good for you, but don’t skip this step.

 

 

Check your expenses and margins quarterly

 

A lot of things can change in 90 days in ecommerce. Set aside time to review the expenses in your business. Look at the time you are taking to create and list your items. See if your shipping rates are still working. Look at your platform expenses and make sure that you adjust prices as necessary to cover any new increases.

 

Take the time to check your profit margins as well. Is one platform outperforming another in sales? Are your margins staying relatively consistent or are you going wildly up and down on certain items? You can take an average sale at your average price in a few categories and look for trends. If you typically sell items at $35.00, $60.00, and $85.00, look at a few sales in each of those price ranges. That’ll keep you from feeling overwhelmed at the idea of reviewing 1200 transactions! Make sure everything you sell makes a profit. Likewise, limit your losses. Because I know that sometimes lose a little bit to move something stored in inventory for a while.  

 

There are million-dollar eCommerce businesses built every year around the world. People love point-and-click convenience. The ability to get items that aren’t readily available where they live and unique online finds. When you are ready for business mentoring to grow your ecommerce biz, check out Success Studio. 

 

This article is relevant for all service providers, but I’m focusing on coaches and consultants who use the online space to make sales and provide services. Here are a few financial tips for coaches and consultants to make the finances easier, and better, for service providers!

 

FINANCIAL TIPS FOR COACHES AND CONSULTANTS

Have a financial structure for money management and taxes right away

 

I see service providers frequently live out of their own personal accounts for a while. It’s so important to set up your business bank account and to create a system for withholding taxes and paying yourself as soon as you can.  Typically profit margins can be larger in the online space, because the cost of doing business is minimal, and I see many entrepreneurs make the mistake of treating their revenue as, “it’s all my money anyway.” This co-mingling makes it difficult to hire contractors, such as a social media manager, because you shouldn’t pay business expenses from a personal account. This can create a tax nightmare.

 

You must pay self-employment taxes on your own paycheck, and if you are using the money in that account, even for business purposes, it be your own personal money. Create a separate financial identity from the start. Get a business bank account. Set up your online deposit with the Internal Revenue Service or your home tax agency and make sure you are withholding and depositing your taxes. Pay yourself every two weeks and let the rest of the money sit in the bank until you get paid again or must pay bills.

 

Calculate everything in your pricing, and know your numbers and your margins

 

My next tip is one that I get some pushback on, I want you to calculate your numbers and know your margins. The reason I get pushback is because people frequently want to “feel” into their pricing, which isn’t a bad thing, but just make sure your feelings are profitable. 

 

I worked with an entrepreneur who was losing money on her most expensive package. By the time we calculated the hours, the services and additional bonuses and things provided, her $1500.00 package had a net LOSS of $80.00 per client. OUCH. In fact, her most profitable package was $195.00. It was extremely hard for her to hear, but it was the truth. Her lower cost packages were covering her losses. She was very frustrated in business, and that was why.

 

You need to know how much you need to make, how much you are legitimately profiting, how many things you need to sell, and at what price, to grow your business strategically and sustainably. Please get your numbers.

 

Stop feast or famine with payment plans and signature offers

 

Coaching and consulting can be feast or famine, and the income can be very unpredictable, especially when you are starting out and haven’t built up your client base. To stabilize your income quickly, please have payment plans available for anything you offer over a certain dollar amount. You get to decide, but I have a client that offers at least 2 payments for anything over $299.00. I have another client that starts at $500.00 and still another that starts at $1,000.00

 

When you offer payment plans you are giving people access to your programs and services at a price point, they can more easily afford, and you get to project income out into the future. Just make sure you cover any additional interchange fees, the fees charged by the bank for running the card each time, in your pricing. Based on the dollar amount, that may be just a few dollars. Again, this is your decision.

 

I know there are some people who do not recommend extending payment plans beyond the length of the program or service the client is buying.  I understand that there is a risk that they will get the service and not pay the remainder. But, while there is a little risk that someone will not honor their payments, generally people follow through, and if you have good policies and procedures surrounding payments (discussed below), you can protect yourself from these instances.

 

Have policies to protect you from chargebacks and from giving refunds if you do not offer them

 

Do not accept anything without a payment agreement. I have a podcast episode, “Get it in Writing” that talks through the basics of what should be in an agreement. I want to talk here specifically around payments. Protect yourself from chargebacks. That is where someone complains to the credit card company or payment portal, and the company gives them the money back- straight from your account. If you do not have anything in writing that says, “no refunds” or “all sales are final” then you will not win against the payment vendor.

 

Make sure that your terms and conditions are required for EVERY sale you make. Take the time to draft them or have an attorney help you and post them inside the sales process. For longer programs or bigger ticket items, send a follow-up agreement in writing to clients. There are a few people in the world that will try to take advantage, and having good, clear, and acknowledged policies surrounding payments will protect your income and your business.

 

Coaches and consultants need to protect themselves financially. I have a special place in my heart for this group of entrepreneurs, because it’s where Mike and I started with UNEQ Consulting in 2011, and I wish I would have had these tips, and had taken this advice back then.

 

 

Author’s Note:

If you enjoyed this blog about Financial Tips for Coaches and Consultants, feel free to visit my other blogs and resources. 

Let me start by saying that writers don’t have to be starving artists to be successful. Today, in this blog, we’ll be talking about financial tips for writers.

The fact is, you’re a business owner, you are self-employed, and you’re actually running the business of you. To run a business, you must have some money. When people say they just want to write and not worry about the money, what they’re saying is, I’m not interested in, protecting, growing, and developing the business of me, which is the income and revenue-generating source of my business.

 

 

With that in mind, here are some financial tips for writers

 

 

Have a monthly budget and put away enough of your advance or royalties to cover 3-6 months of expenses

 

In the book writing world, your royalty checks are held anywhere from 2-6 months after books are sold. That’s a long time to wait to get paid. I know that many writers have a feast and famine cycle in their financial lives for this reason. One of the best ways to break that cycle is to make sure your personal expenses are covered every month and the money is in the bank. This will bring some security and can support your ability to create by removing financial stress. Calculate the costs of your food, utilities, rent or mortgage and transportation every month and squirrel away the amount you need to pay a few months of your expenses.

 

If you are freelancing or writing for a magazine or other organization that pays regularly, know what you need to bring in every month, and price your articles and projects accordingly. Make sure you can cover your monthly expenses. As soon as possible create an emergency fund and squirrel away a few months of income to prevent the feast and famine of the publishing world.

 

 

Think of your labor in a book as a sunk cost  

 

It is very hard sometimes to imagine recovering some financial benefit to all the hours you put into developing your work. It is much more difficult than somebody who, say, a jewelry designer, who knows that it takes an hour and a half to make a certain piece, and we can put a direct dollar figure to what they want to recover. So, I’m going to start by saying I understand that writing is hours and hours and hours and having an hourly rate that you recover actually could be very difficult to calculate. This may give people a little bit of a pause about using a formula because it may seem more complicated.

 

But just pricing a book and hoping to sell a bunch of copies isn’t necessarily the best business model, because you don’t know whether or not you’re actually making back what you’re putting in to generating the work. It’s smart to have a sales goal; a financial goal, for the work.

 

think about pricing accordingly

 

There are two considerations you can use for this. The first one is you need to know how much you need to recover for your personal money. During the time you spent writing, on average, what do you need each month for food for your rent or mortgage for your transportation for all your utilities? Having that as a base as an operating figure that you would use?

 

Then, how many months did it take you to write this particular piece of work? How many months of operating expenses? Did you basically put out during the time that this was in development and being written, so having that number there gives us a place to start for you to recover money for your personal needs. If you were to consider your operating costs, let’s say that it took you five months to develop this particular piece of work, and your operating costs every month are $3,000, you’re looking at $15,000 as the minimum that you need to make back in order to cover your own time. Time that in reality you “loaned” the book to write it.

 

The second consideration is to come up with a number or percentage of costs that are profits. Adding a little bit of extra money to the cost of a book for profit is important, but in all honesty, I get a lot of pushbacks from creatives on generating profits.

 

 

Don’t let your love of writing overshadow your need for profits

It isn’t just writers. For some reason, many creatives want to be the altruistic entrepreneur.  The fact is that the more profit you make the more impact you can have. Price your books and services and deals for profitability.

 

If you’re not making a profit, you can’t have a level of impact above anybody else. How can I say this? Well, how can you be insanely generous and donate to the causes that mean something to you?

 

How can you create opportunities or hire people? Whether it’s a cleaner for your home, or an editor, or an assistant? You can’t do those things without making a profit. In some ways, profit is your duty. As a business owner, you really are the only engine that is going to generate additional money in the marketplace; support other people and causes, or allow you to do volunteer work. When you look at profit as an impact you can see that it’s okay to make a profit.

 

Writers have unique gifts and storylines to bring to the world. But the vision of the starving artist does a huge disservice to craft. Follow the tips I had discussed to make sure you make money while doing what you love. 

 

 

Are you ready for business mentoring in your writing pursuits? Check out Success Studio.