How to stop hourly billing

cashflow pricing help May 04, 2022

Pricing is one of the big issues business owners and freelancers struggle with. Far too many entrepreneurs opt for hourly billing when they start out, only to get stuck in the cycle of charging per hour for their expertise. It’s a pricing model that limits earning potential and stunts any decent level of business growth. It also makes it difficult to outsource because you’re constantly thinking about your bottom line - it’s why I always recommend moving to fixed prices and packages as soon as possible!

But if you’re currently charging per hour, how can you move to fixed pricing?

I recently interviewed Geraldine Carter, owner of SheThinksBigCoaching.com, on this subject for my podcast. She helps Chartered Accountants with pricing and business strategy, so they can go from overworked and underpaid to nicely compensated with a regular, sane work week. So if you’re looking to stop hourly billing yourself, here’s how to switch to fixed pricing.

Pricing...

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Preparing for Self Assessment

cashflow tax year end Jan 19, 2022
The end of January is creeping up on us, are you ready to submit your self assessment payment on the 31st?
 
My advice, as always, is to get the numbers sorted out for your tax return as soon as you can. Download my year end checklist here to get the list of what you need to get together.
 
Hopefully, you have been saving around 30% of your net income. For a sole trader this is revenue less expenses ie profit from your business, and for limited companies, it is on salaries and dividends paid.
 
If you can submit your numbers early, you might have some spare money you can release, if you have been saving 30%, or at least you will know what the number is and you have 10 months to sort things out to find that money.
 
Knowing where you are at the moment is especially important to ensure that you can do something about it now. For example, taking a mortgage holiday, stopping any subscriptions you don't use etc. Don't just stop direct debits and standing...
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Podcast Episode 17 - 5 pricing strategies

 

When it comes to pricing strategies, there are so many options to choose from. But as with many things, it isn’t always down to the number of choices available to you - it’s more about picking the right one for you. That’s why it’s so crucial that you think about your business and opt for the strategies that work for you, especially when it comes to pricing. 

So how can you make it easier for yourself so you’re not bumbling around trying to find pricing for your clients? You can use so many different ones, but instead of overwhelming you, I’m just going to cover the five main ones in this blog.

Pricing strategies based on an hourly or daily rate

Lots of freelancers and consultants use this. But if you’ve spent any time following me, you’ll know I’m not a big fan of this style of pricing. You should not be pricing by the hour as it punishes efficiency and always puts a ceiling on what you earn.

It is, however, often a good...

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Know your business numbers

business cashflow finances Oct 14, 2020

Do you know your business numbers? It’s one of those areas of business that many shy away from, but it’s a crucial element you need to understand, if you want your business to grow and be profitable. 

So why is it so important and what numbers do you need to know? 

Make informed financial decisions

Knowing your business numbers helps you make informed decisions for your business. For starters, how will you know if your business is making money or losing it? If you know your numbers you can decide if you can afford to make investments or hire a mentor.

But knowing your numbers will also help you know if you’re on track with your business and general financial goals. You can see if you need to increase your prices to cover VAT or to better reflect the value you bring to your customers. 

And if you’re at the stage where you are considering getting someone to invest in your business, you’ll have the numbers to back up why they should consider...

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What is cash flow and why do you need it?

Cash flow is one of the most important things to monitor in your business. Without cash, you don’t have a business - and a lack of cash is one of the biggest reasons why businesses fail.

If you want your business to be successful, it pays to know what is happening financially within it!

Cash flow - the flow of money in your business

Simply put, that is what cash flow is. It’s the money in and money out of your business. That flow of money is the lifeblood of your business. You want a healthy flow of money because, if you have too much money leaving your business or not enough coming in, your business is in trouble.

And if you don’t know what’s happening with your cash flow, you can’t hope to know if your business is profitable or not either.

Why cash flow is important

Knowing and tracking your cash flow is more important in uncertain times. You need to know how long your money would last if you were ill or something happened and you lost key clients...

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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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