Tackling your pricing gremlins

Uncategorized Aug 12, 2020

Pricing is one of those topics of conversation that can get heated very quickly. For many small businesses, in particular, it’s the type of conversation that will bring up those pricing gremlins you have around pricing your products or services.

But it’s those pricing gremlins that can hold you back if you don’t get them sorted. 

So, let’s take a look at the typical pricing gremlins that could be affecting your business growth.

Pricing gremlin #1: Copycat pricing

It’s great to research what other, similar businesses are charging, but use them as a guide, not a rule. Other people’s pricing doesn’t factor in the results you can get for your clients, your abilities and expertise. 

And it certainly doesn’t factor in your costings and time, so you need another strategy.

Instead, before you price anything, know what your minimum costs are. [Don’t worry if this sounds overwhelming - I have a pricing calculator that can help...

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5 reasons you need an accounting system

Uncategorized Jul 28, 2020

I get asked a lot whether you need an accounting system to run your accounts, so I have put together 5 reasons you would want an accounting system.


You are a limited company

If you are a limited company, you need an accounting system.  The requirements for submitting accounts and tax mean it is a huge advantage to have an accounting system and would save on year end accounting fees.


You are VAT registered

If you are VAT registered or plan to be, even if you are a sole trader, Xero can submit your VAT return at the press of a button.  It makes a huge difference to managing VAT in your business. 


Your business is complicated

Your business may have several revenue streams to manage, or payroll to pay, or be in business with someone else.  Or you are a product business with stock to manage.  Having a system, rather than a spreadsheet makes managing your business much easier.


Real time information

Having information and knowledge at...

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5 reasons to be a limited company

Should I be a limited company?  I get asked this a lot, and the answer is it depends on your business and personal setup.
But in general, it is because of 5 key things:
1.      Liability insurance
2.      Employing people
3.      Business partner
4.      Tax & control of income
5.      You want to be seen as a bigger business than you are.
Liability is a critical one. If you have insurance of any kind and you are a sole trader, if the insurance is inadequate, you are liable for your personal assets (house, car etc). So make sure you have adequate insurance cover especially if you are a sole trader.  It’s the main reason I am a limited company, to protect me professionally.
If you are employing people a limited company gives you a legal framework to work...
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Which part of your business makes the most money?

Which of your products and services make the most money? Is it the one you love to sell? Or is it the one that is really low priced but you sell loads of?

In a business where you offer several different streams of income, you need to know which ones make you money. The ones that take a lot of effort might be making you no money and you need to think about how to generate more money from those that are bestsellers.

To do this, you need to know your cost per product or service.

Service businesses 

In your business, you maybe offer a course, 1:1 coaching, workshops and an ebook as an example. There will be some direct costs (you only incur if you do the work), such as the hire of a venue, or paying a speaker, plus affiliates and associates.

Then there are the indirect costs (overheads). These include, your website charges, social media, VA and so on plus paying yourself. This is everything else, basically, in your business. You need to work out how much this is per hour by taking...

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Are you working too hard?

busy productive rest work Jun 30, 2020
I took a day off last week.  It’s actually the first proper day I’ve had off since lockdown, where I turned off my email and my notifications for the day and was truly present with my family.  We went to the beach for my son’s 8th birthday and it was just a lovely day, one of those rare parental days that go well!  And since then I’ve been super productive getting my business work done.
So I’m planning another day off this week (my husband’s birthday!)
I’m a firm believer that actually hard work doesn’t always equal greater success.  Yes, if you are lazy and don’t put in the work at all, your business won’t grow.  But actually, working 14 hour days isn’t the answer either. 
In her book, “Do Less” by Kate Northrup (get a copy here), Kate talks a lot about needing to have time out in order to be able to have productive times.  That we...
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Do you know what the breakeven position is in your business?

Do you know what the breakeven position is in your business?  Do you even know what that is?
If you don’t know (and it’s totally ok if you don’t), breakeven is when your sales and costs are the same ie zero profit.  This is taken after tax to ensure this doesn’t get forgotten.
Start with working out your fixed costs.  These are the items that, if you didn’t have any income, would still exist.  This might be your website, insurance, accounting costs, employees, office space costs, tech (G suite, zoom etc) or manufacturing costs.  Also, anything that you are paying on a payment plan to ease the payments.  Anything that you can’t just turn off if your business stopped for a period. 
Then look at the variable costs.  This could include paying yourself although I think you should be aiming for a minimum fixed cost each month to pay yourself.  So put in how much you need to live in this...
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Being a sole trader

There is often a lot of talk about whether you should be a sole trader or a limited company.  There are circumstances when being a limited company is a really good idea, such as having people on the payroll or being in business with someone else.  The main reason for most service businesses is that they want to save tax.  Once you take home more than £30,000 from your business (sales less costs), it is worth considering.  But it isn’t always the right thing to do and you should consult an accountant first.  More information is here
You must make sure you have sufficient insurance in place.  When you are a sole trader, liability if a client sues you is unlimited (hence Limited company) and you need to have solid insurance in place to ensure they can’t take your house.
Being a sole trader, if you have been in business for more than a couple of years, has also been much easier to claim from the government in recent...
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Why you should have a cash flow forecast

cashflow forecast planning Jun 10, 2020
Cash flow forecasting is critical in any business but lots of people neglect this area.
Imagine for a moment that you are wanting to buy a new car but you don’t have the cash for it.  You look at the options – you could lease, which would be more expensive but would only mean a monthly outlay, or you could save up to buy the car outright.  For each option, you would look at how you would save the money, or whether you could afford the monthly lease repayments.
You might look at your household budget, if you have one, or make a guess based on your bank balance, or just decide without looking and say you will put any shortage on your credit card.
Without planning, this could lead to significant debt.  You might choose a car that is more expensive than you can afford, or have monthly payments you can’t meet. 
It’s the same with having a cash flow forecast in your business.  How do you know whether you can...
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How lean is your business?

business cashflow numbers Jun 10, 2020
Do you run a tight ship, or do you keep spending money in your business?  
Running a lean business is key, whatever size business you are.  Overspending is a sure fire way to have you go out of business.  60% of UK small businesses fail in their first 5 years, and you don’t want to be one of them.
Examples of how to keep your business lean:
  • Employ freelance staff where you can, rather than employ them, until you are sure you can keep them on the payroll permanently.   Employing people can work out cheaper in the long run but only if you can guarantee work.  Freelance can be more flexible.
  • Make sure your marketing costs have a sold return on investment (ROI).  For example, if you are going to do Facebook ads, make sure this is factored in when you are looking at how much your offer is.  If you spend thousands on ads and are only selling hundreds in services, it’s not worth it.
  • Don’t have anything on...
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How do you measure success in your business?

business money success May 27, 2020
How do you measure success in your business? Is it all about the money, or does something else drive you?
For me, I know that I measure success largely by how much money I have in my bank account. I'm a numbers person, and I know this motivates me hugely. However, success to me also means having quite tight boundaries, so I don't work evenings and weekends as much as possible. I have 2 young children and being able to be there for them is really important to me. I want to choose to have school holidays off. In lockdown, these boundaries have become even more important as I love my business and could spend every waking hour on it! However, I need to make sure I have plenty of downtime as well.
I also value flexibility in my work, and I don't believe you have to work harder to be able to be successful. I am always looking for ways to make my business more efficient, and outsource things that take me a long time to do. I also try not to trade time for money too much, so...
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