Many small business owners start their businesses out of a desire for freedom and end up feeling trapped. If this is you, it’s time to re-value your worth, and make your business more profitable.
By Michael Mekhitarian
There’s a lovely story doing the rounds on social media about a customer questioning what she considers to be an ‘outrageous’ quote from a tradie to build a deck.
The tradie goes on to explain that in the equation, the customer must consider the need for specialist tools and equipment, materials, time, and of course knowledge and experience.
Does any of this sound familiar?
Many small business owners feel the need to justify the costs of their products and services. Others don’t end up charging enough and wondering why they’re always chasing their tail to make ends meet.
It’s a critical business mistake to undervalue yourself, and what you have to offer.
Because when you do, you might make a profit, but you don’t make a profit consistently,
We worked with a client recently – a tradesman – to really drill down on his numbers, and there were some gaps in what he should have been considering in his overheads – things like petrol, rego, truck maintenance, IT (phone, website, payment apps), insurance, and the inevitable time that’s required behind the scenes to keep the business running – scheduling jobs, doing the administration etc… the list goes on.
We were able to show him a way to build these into his pricing, now his finances are a lot more healthy, and a lot more stable.
Valuing your product or service is, I would argue, a science.
There’s plenty of websites out there that can help you ‘approximate’ and ‘guesstimate’, but specialist advice goes a lot further. After all, no two businesses are ever the same.
We use a tool called the Growth Equation which drills down deep into your business numbers. Specifically, it reveals the greatest areas of potential growth for your business. This means:
This helps sure up your business. It makes your business more attractive to potential lenders when you go looking for capital to expand, as well as potential partners or collaborators… Even further down the track it makes your business much more attractive to potential buyers when you’re ready to exit.
Ultimately, all of this results in something much much greater though – peace of mind. And that is something you can’t put a price on.
So if you think you can’t afford business advice, ask yourself whether you can afford not to get some professional business advice and continue going it alone?
Because when you have control of your business, you regain control of your life.
Download our free e-book 5-Steps to Taking Control of your Business, or check out the resources on our ATB Partner’s YouTube channel, and if we can help you further, contact us.