Small Business

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Your Prices Matter, Here’s Why

When it comes time for you to price your services or products, you might find yourself at a loss. There are all kinds of pricing formulas out there. Some involve complicated math and some that just ask you to consider wholesale versus retail pricing. My personal favorite way to determine prices is to set income goals informed by the purpose and the plan you have for the money you earn from your business.

This month, I’m going over some financial mistakes women I’ve talked with recently first made in their business, and how to correct them. Let’s dive in:

The Mistake

This woman I spoke with listed not pricing her services high enough as her biggest financial mistake. She priced them too low initially. After realizing this, she found it difficult to raise her rates, because her first clients expected her low prices. She struggled between raising her prices and earning a wage that was too low for her needs. 

The Solution

If you are just starting out and are about to price your products – congratulations! You can take preventative action to make sure this doesn’t happen to you. The most important thing to do first is to establish your money why – your purpose and plan for the money you earn though your business. Where will it go? What will it do? An important part of this process is looking through your expenses and determining how much your business will support you with them. Once you’ve established your money why, you’ll be able to set income goals based off this information, so that your income is truly able to cover your living expenses. Once you know how much money you need to make, it’s easy to figure out how high your prices need to be.

Ask yourself a few more questions: What products or services are you planning to produce and sell most often? How much time, labor, and supplies will go into production? Account for those costs in your pricing formula, and make sure the answers are what you want them to be. If you’re planning to make most of your money from custom embroidered portraits, but you actually hate embroidery, maybe you’ll want to tinker with your profit model a bit. After this inquiry, you’re well on your way to pricing yourself well. For more resources, check out this article I wrote about my interview with Megan Auman.

If you’ve already priced your products and wound up in a similar situation to the woman above, you can still double back and figure out your true income targets and prices. The real challenge comes in actually implementing a rate change. Before you do this, it can be helpful to do some mindset work. Raising your rates can be a scary prospect that brings up all kinds of emotional baggage, but if you work on it, you can get to a point where you feel settled. Then, go ahead and raise your prices! You deserve to be comfortable and make a living wage. After all, isn’t that why you went into business for yourself?

I hope you found this helpful! I’m doing a series on financial lessons learned from business in honor of Financial Planning month, so stay tuned. And if you enjoy these thoughts, I wrote a lot more about planning and financial lessons in this month’s newsletter. Read it here and subscribe if you wish – you can unsubscribe any time.

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Angela

Image Source: Jason Blackeye

How to Create A Business That Restores You

A lot of people start their business with hopes for a better life in mind. More freedom, more money, a better schedule, and a legacy to pass on are just a few things that people starting out on their solopreneur journey might hope for. However, once a business gets going, whether it’s a full time project or a side-hustle, for many it becomes a demanding enterprise. My goal is to bring the solopreneur’s relationship with their business back into balance, by making sure the needs and desires they set out to meet in the first place are organizationally and financially prioritized.

So, how do we do this? The path toward creating a business that is restorative to you, the owner, combines intentional decision making and organizational action. Here are a couple key factors I’ve identified through my work with clients:

Boundaries

I recently review Jennifer Armbrust’s awesome book, Proposals for the Feminine Economy, in which she introduces twelve principles for feminist business. Principle number one is very simple: “You have a body.” While this can be interpreted in a number of ways, to me, it’s a reminder to slow down and set reasonable expectations for myself. By keeping my physical and mental limits in mind when setting up my schedule, choosing my daily tasks, and considering the scale of my own business, I’m able to avoid exhaustion and burnout. Some solopreneurs leave the corporate world or another industry in hopes of finding better work-life balance on their own. Healthy boundaries around when and how much you work can help you realize that dream and restore mental and physical wellbeing.

Clear Objectives

Consistently, I ask my clients to consider their “money why” – the clear financial objective they aim to achieve through running their business. Your money why can be a very specific goal like saving to buy a house, or it can be more general, like sustaining your budget. I have an article all about how to set income goals based off your needs. Reading it and doing a check in can help you establish your own clear objectives. By keeping your efforts focused on those, you can make sure specific needs and desires are met.

Quarterly Profit Distributions

This is one of my favorite practices from the Profit First system. To use this practice, during a fiscal quarter, you collect a portion of your profit in a specific account. At the end of the fiscal quarter, you take whatever money has collected and use it to reward yourself and celebrate your hard work. This is a great way to stay energized in your business. You can take this reward without guilt because you have the system in place to know your business is healthy, and this money is specifically set aside for you. If you’re intrigued by this concept, I encourage you to download the first 5 chapters of Profit First and play around with my allocations calculator!

I hope these ideas help you see a path towards your own restorative business. If you’re interested in learning more about what I do with my clients, you can check out my Services packages or schedule a call with me.

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Angela

Image:  Meghan Schiereck

Why You Need to Consider Your Hourly Wage As a Business Owner

Have you paused to consider what hourly wage your business pays you? This might not seem important – maybe you think that as long as you have your bills paid, you’re all set.

Why Think About Your Wage?

The thing is, this is really about pricing your products appropriately. First you need to understand your money why, or why you earn the money you take in from your business.  This will help you understand if your current prices can really sustain the goals that you have financially. You can learn how to set informed income goals here. Once you understand what your income target is, you can work backwards and see how much of your product or service you would need to produce and sell in order to make that income. The next step is to see whether that’s realistic. 

The Cost of Low Prices

Look around at what other people in your industry are selling their product for. If you’re giving your goods away because they’re priced so low, you’re not doing anyone any favors. Remember, selling more doesn’t mean you’re necessarily making more. You aren’t making money, you’re reducing the value of what you do in the eyes of the buyers and you’re making your industry fellows unhappy.

Consider Your Time

When you are considering how to price your product you may take into account the cost of supplies, transportation, and other materials. However, you must also take into account the cost of your time. If you were working for someone else and getting paid, you would receive an hourly wage, so consider that just as important in your own business. If you hired someone to help you with production, you’d need to pay them an hourly wage too. If you’re planning to scale up a business you’ll need to be able to hire other people and your prices need to be able to sustain that.

Another thing for product-based businesses to consider when looking at your pricing is your interest in wholesaling. When selling wholesale, you will typically  sell at 50% of your retail price. If, at this price, you’re not covering your costs, labor and making a profit that supports your financial goals, you need to raise your prices. 

I hope these thoughts of mine have helped you consider how taking your hourly wage into account can help you accurately price your products and meet your income goals. If you’re interested in learning and thinking more about pricing formulas, I encourage you to check out my interview with Megan Auman. Our talk, plus my articles on how artists define their own success and how business skills and artistic sense can coexist, are great resources for anyone with a creative business looking to tinker with their profit model. Enjoy!

 

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Angela

Photo: JOSHUA COLEMAN

Book Review: Proposals for the Feminine Economy by Jennifer Armbrust

This week, I was reminded why Proposals for the Feminine Economy resonates with me.  I was on a call with my business coach feeling discouraged about my own business forays. She suggested a mantra – “I am a successful business owner.”  As I was trying this on during my morning practice the next day, I knew I needed to define “successful.” The definition I’ve come up with is confident, committed, open to new clients and collaborations, self-sustaining, abundant, and growing.  This definition gives me a feeling of lightness, hope and helpfulness towards others.

These principles are what Jennifer emphasizes in her book. As a society, we see business success through a lens of masculine values and results. She suggests that we instead strive to view business as a creative environment and value our business using more feminine metrics, like care, mutual aid, sustainability, and needs-fulfillment  Her book is filled with beautiful illustrations, one of my favorite being the wheel of values in a feminine economy. A couple other examples of masculine vs feminine economy that have stuck with me include the differences in employing competition vs collaboration or consumption vs resourcefulness.  

This book is about transforming our relationship with money and work, which are aligned with my own philosophies.  I love her manifesto “100 Ways to Make More Money” and have several favorites. I particularly love these two because they are the basis of why and how I work with my clients:  “See fiscal empowerment as a revolutionary act” and “Become conscious – know why you do what you do with your money.”

Lastly, I very much enjoy her thoughts about cultivating an abundance consciousness.  Again, it is easy to define abundance through numbers when thinking about businesses, and particularly for me as a profitability coach. She reminds us to “feel how rich you are already” and to remember that “money isn’t the only form of wealth”. These are the lessons I try to remember when I define the success of my business and the success I am helping my clients to experience. I highly recommend checking out this book and Jennifer’s website in general. You can also read my post on the feminine economy for more information on the concept. I hope you find it inspiring!

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Angela

When to Take the Leap

When to Take The Leap: At Peace With Money

You’ve relegated your passion project to side hustle status for a long time, working on it in between your day job and other parts of your life. But you know that if you want to get your business growing, you need to invest more time. That’s when you start asking yourself, “When can I get this off the ground? When can I take the leap, quit my job, and do this full time?” This is a question that must be considered carefully. While I support jumping in, I think it’s best to make the decision based on practical financial criteria. Taken at the wrong time, that leap could jeopardize your business. So, let’s take a closer look at what criteria you and your business should meet before you’re ready to take it to a full-time level.

Savings

Before you leap into the realm of self-employment, it’s good to have some savings to cover your expenses before things get going. This requires calculating your living expenses for each month, and then deciding how many months worth you want to have saved up. Many sources recommend saving up between six months and a years’ worth of expenses, but it’s ultimately up to you. Whatever number you decide, make sure it correlates with how much time you think you’ll need to get your business to a point where it supports you. If you need some resources to help you determine your monthly expenses, I recommend my article “Three Steps to Financial Clarity.”

Proof Of Concept

It’s important to prove to yourself somehow that people actually want your product or service – that there is a demand and real profitability in your idea. Setting up some metrics specific to your business idea can help you divine whether this is the case or not. Depending on your industry, this test could look very different. It might be helpful to research what success and demand look like in your industry. Ensuring that your business will have customers is an important step in the path towards solopreneurship.

When to Take The Leap: At Peace With MoneyI know they say “Leap and the net will appear,” but in order to take care of yourself financially, I think it’s best to take the leap only when you’ve already constructed at least some of that net for yourself. I understand this is difficult territory. It can be hard to know when you might make more money if you’re able to work on your hustle full time, rather than playing it safe and keeping it on the side. My advice is to think carefully and critically and make sure you have the resources to take care of yourself!

If you enjoyed this article and want to talk more about the profitability of your business, and how you can make it work for you, don’t be afraid to reach out. You can check out my Services page and schedule a call.

I first published this post back in May, but I thought August would be a good time to roll it out again, with our theme being transitions. If you have other business transition-related thoughts or questions, just let me know in the comments. I’d love to address them this month!

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Angela

Image:  Chris Ouzounis

Financial Advice: How to Avoid the Bad and Find the Good

Financial advice is important, but the wrong resources can steer you in a rough direction. You don’t want the resources you’re looking at to lead you to a place of boredom or despair due to unrealistic goals. Last time, I gave some tips on finding the right financial advice for you, but today I want to break down some red flags to avoid. Then, we’ll look at some signs that show you’re on the right path!

How to Discern an Unhelpful Resources

A financial resource may not be right for you if:

  • The resource is targeted to an income level higher than yours. Even if you aspire to increase your income, financial advice will provide you with feasible next steps if it acknowledges your starting point. Starting out by reading investing guides for people with a $100k to distribute might leave you feeling alienated.
  • The resource chastises you or shames you for habits or behaviors. While many of us do carry emotional baggage around money, I firmly believe we should not be put down for this, or for our financial habits. Shame and blame do not facilitate financial learning. If a resource is telling you to quit things that make life enjoyable, or scrimp every penny as a path to wealth, evaluate these strategies carefully.
  • The resource uses financial jargon you don’t understand. Something like this can quickly lead you to boredom or discouragement. You can always look up the vocabulary words you don’t know, but finding something more accessible makes for a more pleasant and sustainable learning experience.
  • The resource doesn’t reflect your vision for your business or personal finances. Not everyone needs or wants piles of cash – so you won’t enjoy a book about how to get that if that’s not what you want!

Signs the Resource is a Good Fit

Alright, we’ve looked at red flags, now let’s talk green flags. A resource can be great for you if:

  • The resource acknowledges and takes time to help you work on your emotional stories and stressors around money. (One of my faves for this is The Art of Money by Bari Tessler)
  • The resource is accessible, easy to read or consume, and enjoyable. The more you want to come back to something or refer to it, the more helpful it will actually be!
  • The resource is tailored to your version of financial success and gives you steps for moving towards it.
  • The resource is targeted towards your income level.
  • The resource focuses on long-term solutions like mindset changes, money systems, and improved habits rather than “hacks” or penny-pinching.

If a resource ticks all these boxes for you, it will probably set you down the path to financial wellbeing! And it will feel a lot better than trying to read something that just isn’t for you. Next time, we’ll talk about starting the search for resources. For now, feel free to do some good ol’ googling. You can also check out my article on some of my favorite resources. I post more resources and video summaries of important concepts on Facebook, so check that out and see if you get green flags!

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Angela

Image Sources:  David Iskander, Thought Catalog

A Brief Guide to Finding the Right Financial Advice

Determining what kind of financial advice you’re really looking for is more important that you might suspect. A lot advice out there is targeted to people who already are or who want to be wealthy. If the advice you’re trying to follow is geared towards a vision that ultimately differs from yours, that can be an issue.The fact that so many financial resources assume their audience has a certain income level is also an issue. If you’re looking for financial help but you can only find resources that are geared towards people who make $50,000 more than you, you’re going to feel left in the dust.

One of my big goals with At Peace With Money is to help solopreneurs who don’t manage enormous accounts feel like they too can take steps down a helpful financial path. I strongly believe that no matter what amount of money you make, there are steps you can take to improve your situation and take care of yourself in the long term. I also believe you can do this without hugely sacrificing your quality of life. It doesn’t feel good to be chastised for your income level or your lifestyle, especially when class structure in the U.S. effects us in a way that means we are often not fully responsible for our financial standing. I don’t think that’s the role of financial advice anyway! Instead, good advice meets you where you’re at, and helps you get where you want to go.

 Know What You Need

Once you’ve decided to find financial advice resources that are relevant to your lifestyle, it’s important to know where you’re at personally. So, be sure to check in with your own finances. If you need a simple process to get clear, check out my Three Steps to Financial Clarity exercise.

Once you’ve done that, you should have a clear idea of your current income level and your hopes for your financial future. Both of these things will help you determine what financial resources are best for you. At the beginning of your journey, you might not be interested in people who talk about managing large investments. That can always come later! Instead, you might be interested in resources that cater specifically to small businesses just getting started, or people who’ve just opened an IRA.

Find Your Teachers

Now it’s time to find some good resources that meet your criteria. Some googling might help with this, but you can also check out my post on my favorite resources. There are tons of people and helpful guides out there. If Suze Orman’s not your style, don’t let her throw you off the path of learning how to make and manage wealth. You don’t have to already be making $100K a year or give up coffee forever to invest in your future – I promise.

I hope this guide has been helpful for you! If you like these ideas or you’d like to work with me for a little guidance, head on over to my Services page, where you can book a call with me.

Angela

Image Source:  Sharon McCutcheon , Luis Quintero

To Find Clarity and Focus, Do a Mid-Year Review Pt. II

This is part two of a two-part series on doing a mid-year review of your business! You can find part one here

So, now that you’ve reviewed your work so far and adapted your strategies and goals appropriately, it’s time for the next few steps. These are intended to really up the feeling of getting a fresh start, while enjoying your business for what it is: a way to meet your life goals.

Refresh

For an extra dash of clarity and focus, include a refresh in your review process! Now is the time to do whatever necessary maintenance you might need to grease the wheels of your business. You might clean your workspace, clear your inbox, or centralize your passwords. Attend to your physical and digital spaces. Check in with your finances, and schedule an appointment with a bookkeeper. 

This is usually my favorite part of the review process, because I make time to do all the little things that have been nagging me, like scheduling lower priority appointments, finding that one piece of paper, and sometimes making a new goal chart for myself. Giving yourself the time and space to get organized can save you time and effort down the road. It can also add ease to your everyday business functions – which is an added bonus!

Celebrate

Go back to step one, and take stock again of all you’ve done this year, including this review process. Chances are, you will find you’ve done quite a bit of work towards your goals, no matter how close you might be to completing them! Take some time to celebrate all the work you’ve done. Treat yourself to an afternoon off, a fun or inspiring event, or whatever you’d like to do to celebrate your achievements so far! Being a self-starting solopreneur is hard work. If you’ve done the work, you deserve to cheer yourself on once in a while.

If you busted through this whole review process, congratulations. I’d love to hear from you about how your business functions going forward, or if there are any little things you’ve added to the process. Just leave a comment below or shoot me an email at angela {at} atpeacewithmoney.com. If you think you could benefit from working through this process with an accountability partner, you know where to find me – just check in on my Services page.

Angela

Image Source: Emma Matthews

To Find Clarity and Focus, Do a Mid-Year Review

Goal motivational quote

We’re six months down the line. How are you doing with your goals? Have you totally crushed them, worked on them bit by bit, or are you not sure? In the thick of things, sometimes our focus on our goals can get a little murky. Here’s the first two steps of a two part series on doing a mid-year review. Let’s jump in:

Review

Step one in a mid-year review is the review, of course! When you take a look at the goals you’re working towards, it’s easy to get bogged down by focusing on what you still need to do. Instead, train your focus on what you’ve already done.

Start by making a list of milestones you’ve hit or steps you’ve completed. Rifle through your day planner or old to-do lists if you need a refresher. Go back through the year, month by month.

Now, it’s time for a little introspection. Take stock of all the actions you’ve taken towards your goals, and then ask yourself a few questions: How do I feel about this goal? Do I still want to achieve it by the end of the year? Is that feasible? At what pace have I been able to work toward this? What’s my capacity been like?

Don’t be afraid to drop things or add new things. Some goals may simply no longer excite you, or you may have realized that another achievement is more important or time sensitive.

During this review process, it’s also helpful to take a look at the systems and work routines you have in place for your business. For example, you may have set an intention to review your numbers once a week, or you may be trying out the Profit First system. Evaluate the effectiveness of your systems and routines. Are they working for you? Do you have time to do these things? Are you consistent? You may find that your routines need to be simplified or tweaked to be more pleasant. Or, you might find that your systems and routines are working just fine! Both are vital evidence when checking in on your business.

Learn and Adapt

Next, it’s time to use all of that evidence you’ve gathered to adapt your goals and practices. First, notice if you have any goals that you are either discarding or adding. Next, examine the pace at which you’ve worked on your goals. These pieces are important when it comes to planning out the rest of your year.

I recommend drawing or writing out a map for the next six months. Include any events relevant to your business, like conferences, trade shows, or gallery openings. Then, begin to write in milestones you hope to meet in the next six months. Make sure these are realistic! Don’t pressure yourself to level up in three months if it took you six to get where you are now. Instead, allow yourself the space and time to achieve things incrementally.

When you’re making your plan, be sure to adapt your goals to what’s worked so far this year. If you really love a certain routine or feel fired up to keep working toward a certain goal, go for it. If you’ve stalled on a project because you need to do more research, carve out some time to go back to the drawing board. When charting your course, keep your own needs and preferences in mind.

The next two steps will coming out in part two of the series, but I think this gives you enough to chew on for now! If you haven’t yet set goals for your business, or would like some more help thinking them through, check out my article Set Informed Income Goals. And of course, I am happy to walk through the goal setting process with you. All three of my service packages are focused on helping you set, work towards, and achieve goals. If you find you might appreciate some accountability or guidance, head on over to my Services page and schedule a curiosity call

Angela

Image Source:  S O C I A L . C U T