OK, maybe not exactly religion, but heck if you’re a smarty… you’re a smarty! Worship at the altar of smarty pants and flaunt it if you know it. Er… or something to that effect anyway.
And if you don’t yet know these 5 things, prepare to be enlightened, and join the ranks of smarty pants the world over.
Dum da dum dum…
Ooohh… that was a bit dramatic wasn’t it?
Alright, enough with the suspense already… here’s the 5 things you should know if you’re a smart entrepreneur, and please, don’t hate yourself if you didn’t know one of them… you’re still 75% smarty pants!
And that like, totally counts. Kinda.
1. How to price services correctly.
This is a challenge to many entrepreneurs—freelancers and brick and mortar business owners alike. Maybe $60/hour or a 50% mark up seems like a lot (especially to all you cheap skates, you know who you are!) Oh but wait, I’m sort of a cheap skate too… hmnn.
OK, so scratch that last part, start over at “seems like a lot” and skip straight to-
But once you factor in your operating expenses, taxes and other costs of doing business, you may be surprised. There… much better. Hypocrisy deflected!
Pricing is business 101. It is what positions you and your product and/or service— meaning just who exactly are you catering to? What’s your target market?
It is also determined by other factors, such as overall business costs and what your target market can realistically afford.
Ask yourself the following questions when you’re trying to determine how to price your services correctly:
- How much do you want to earn from the business?
- How much does it cost you to be in business?
- How big is the market?
- Do you have more clients than you can handle?
- How much can your typical client afford?
- How do your clients regard your work?
- How much is the competition charging?
- Are you offering more value than your competition?
Once you’ve figured out where you are in the grand scheme of things, you can then evaluate and determine how much your services are really worth.
Then charge more. I vote double.
2. How to outsource.
Face it, you can’t do it alone.
There’s no room for She-Ra and He-Man.
You only have so many hours in a day. If you want to expand and grow your business, you need people to help you out. Find somebody who can do it for you for less. Big companies are doing it, why shouldn’t you? BTW, that’s not a rhetorical question.
Really. Why shouldn’t you?
Think you can’t do it?
The Internet age has spawned a new breed of freelancers. They used to be called virtual assistants—but these days, they do more than fix your schedule or contact your customers. They are writers, graphic artists, web developers, software developers, designers, bloggers, and, and… crikey we could be here all day!
Where to find them?
All over the world. Sites like Guru, Elance and oDesk has made it possible for anyone to hire somebody from anywhere in the world for a mere fraction of the cost it will take you to do it.
3. How to pay yourself first.
Paying yourself first is the financial mindset of setting aside money for savings and investments before you pay any of your bills. Notice I said mindset.
It really is a mental thing to train your brain to pay yourself first. Your automatic inclination is to pay that outstanding bill that’s screaming for blood right away, and then maybe you might have a little left over to save and invest.
It’s a mental thing, but you can make the shift and develop the habit of paying yourself first, and it’s absolutely vital if you ever intend to get anywhere noteworthy in your lifetime.
The idea is to consistently save a pre-determined and fixed amount of money from your income each month. What remains of your income is what you’ll use to pay your bills and purchase everything else you might need.
You are encouraged to do this anyway if you work a J.O.B., but it’s highly advisable for you to do the same for your business. It may be difficult for those just starting out, but try to start doing this as early as you possibly can.
Try to set aside money each month for a “business investment fund.” You can start small and increase the amount little by little. You can then use this fund in the future to expand your operations, to upgrade the tools of your trade, or to pay for additional training to further excel at what you do.
4. How to bill customers.
It can get downright ugly, if you don’t know what you’re doing.
Like hairy ugly.
The first thing you need to remember when getting into a business relationship with anybody is to draw up some sort of contract. Take your time to sit down with your client to talk about the terms of the business transaction, agree on it and put it to paper (or email as the case may be).
It doesn’t have to be fancy, just something in writing that clearly delineates the deliverables you’ve both agreed upon.
Remember to document everything, especially the terms of payment.
Also, don’t forget to put some sort of collection system in place. It can be as informal as casually reminding your client that the payment is due yourself (I find “Yo! Pay me or else!” works nicely), or as formal as an automated email.
Find a system that works and stick with it.
5. When and how to cut ties.
This is probably one of the most difficult things to do, but hey…
You can’t please everybody.
If for some reason you can’t continue with a business relationship—perhaps because nothing you do pleases the fracken client or because said client is just so much of a pain in the bleep that it isn’t worth your time or effort…
You need to know when and how to cut ties.
And trust me, it isn’t easy.
But consider how a problematic project may affect your business. A stressful situation may spill over to your other projects, which would then be totally unfair to your other clients.
There really aren’t any hard and fast rules on how to deal with such a situation.
But the key thing you should always remember is to keep lines of communication with your client open—take the time to sit and talk to them and assure them that you have done everything humanly possible to help them.
Let them know why the relationship just isn’t working and explain why you feel you’re no longer a good fit for the job. In other words, break up with ‘em already!
Rip off the band-aid!
People appreciate honesty.
So be honest with yourself and your client, cut ties and move on.