Are you a business owner who doesn’t know how to make financial decisions for their business? Making financial decisions for your business includes more than finding funding and managing your taxes. If you have trouble finding the right pricing strategy or understanding how to manage your clients, here are our tips and insights from our Instagram Live at 5.
Identify your client types:
PITA-C (pain-in-the-ass clients) are the clients that will drain you, your love for your work, your time and increase your liability. These clients are never happy and will find new and improved ways to complain, monopolize your time and drain all your mental and physical energy.
Why is it important to avoid these clients?
Even if they might be monetarily high value, PITA-C might bring more liabilities to your business and cost you more than what’s perceived. As we say at Team Jackie Porter, a million dollars isn’t always a million dollars. For example, some of these clients might call you last minute and want you and your team to solve all of their problems within a few hours, making you arrange your time for them and prevent you from taking on new opportunities. The longer business owners keep these clients, the more they will need to compromise their opportunities to grow their business and wealth.
Conduct a SWOT analysis:
Knowing your strengths, weaknesses, opportunities and threats can help you understand how you can improve your business. If you are trying to choose between services and products you might provide, understanding your skills and capabilities, the time allocation, cost of materials, labour and more factors can help you find the best option for your business.
Break down your costs:
Some costs might not be too easy to recognize if you take over multiple roles in your business. However, the time spent picking up your materials, assembling your products, packaging, providing the services, delivery might add up to more costs than you realize. You might not be paying yourself a wage if you are taking on tasks the tasks yourself. However, factoring in labour expenses is beneficial in order to understand the total costs to your business. In addition to labour, transportation and opportunity costs are also important to consider. You could be investing your time in more lucrative activities that may not currently be factored into your overall costs.
Understand the law of attraction:
The want to charge low prices while starting a business might be common among business owners. However, pricing strategy includes targeting the right audience and you might miss out on your target clients if you lowball your prices to be competitive. By assuming you need to start low and build your prices up, you might miss out on making a profit as well as targeting clients that are a better fit for your business as customers. Understand the value of your offer and charge accordingly to prevent lowballing your services.
In addition to missing out on the right audience, you might also be limiting your growth opportunities as some customers might ask you for more offers and discounts as they improve their relationship with you. Even if you assume you can increase your prices, you might end up lowering your prices further to keep your existing customers.
How to turn down PITA-C and still grow your business:
Your PITA-C clients might be very appealing to work with if they are a big corporation, offer high monetary value and more. In these situations, you might find it harder to turn down a PITA-C client even if you know they might prevent your growth. If you are struggling to identify if potential clients will be a PITA-C or high-value clients, we advise you to calculate your return on investment. Will the time you spent be worth the outcome you are getting? Will this business bring greater future opportunities, or will it consume your time? Will you need to say no to other offers if you say yes to the proposal? For example, if you are a business that depends on referrals and word of mouth marketing you might perceive high value in working with companies and clients with a high reputation. However, these clients might not want to pay you the value your service offers and might not bring as many potential referrals as you might hope, resulting in a low return on your investment. Instead of pursuing these types of clients, you can allocate your time to build your mental health and mindset and take much-needed downtime. You can also focus on building your relationship with existing clients to draw higher-value opportunities and drive more ideal clients to your business.
We hope you enjoyed reading our blog on how to save money after COVID! Check the full live chat here. You can find our live chats and more of the latest financial news on our News Blog. Stay tuned to learn more tips on a new topic each week on our Instagram Live at 5 on Instagram! Aside from our live chats, we post daily financial updates on social media! Follow us on Linkedin, Twitter and Facebook and Instagram.