It's Episode Three of my blog mini series with the really long and awkward name:
What I've Learnt in 14 Years of Self Employment
Today I'm talking money, which is an uncomfortable topic at the best of times but a really important one when it's your responsibility to generate it. I'm going to start with a great and wondrous realisation that I made 14 years ago when my first $200 payment dropped into my bank account...
I abandoned a decent corporate salary to go out on my own and while I occasionally wish that those same dollars came as easily now as they did then, I value every single dollar now in a way that I really didn't when I was paid a salary. The connection between the work you do and the money you make is so immediate when you work for yourself that it's still a thrill when invoices are paid, even after 14 years.
There's something else I've learned while working for myself, and I wish I'd learned it a whole lot earlier. It's the value of experts. It's tempting when you work for yourself to be the 'Jill of all trades'; to do your own web design and your own bookkeeping and your own administration and your own marketing. But do you know what? There's a full time job just there. I was putting all of the hours into keeping all of the balls in the air and then discovered that there was no time to work with clients and coach and write and design and develop courses and new programs and do the stuff that I do best - the stuff that can't be outsourced.
One of those experts is my business coach, the very switched on Melanie Miller. I've learnt a lot about the money side of my business (and I keep learning every day) from this lady so rather than write about what I've learnt I asked her to share her wisdom directly with you. So here she is with her tips on money.
1) Ignorance is not bliss, it’s stressful
Many women come to me because they feel overwhelmed by their businesses. One of the first questions I ask is, “How are you doing financially?”. More than 90% have no clue and often respond with “I am too scared to look”. The unknown is scary, it is also very difficult to improve if you’re not sure where your starting from. Those feelings of over overwhelm often come from fear of the unknown.
Don't fear the numbers, even if they're horrible. At least you know what you're working with and you can only go up from there.
2) Know what comes in and what goes out
If you’re just starting out with the money side of your business (you’re new to this or you have been avoiding it and want to embrace it) don’t try to learn everything at once. Take it slow and start with the basics. Go through your last month's back statement and receipts and write down exactly what came in and what went out. I have started clients out with just a sheet of paper with a line down the middle, a pen and a calculator to get them comfortable with tracking money in and money out. Once you have the basics down you can get a little fancier. Don’t overcomplicate it.
3) Start where you are today
If you're months or even years behind it is tempting to tell yourself that you need to put a couple of days aside to tackle it all at once. In my experience you will never find that time. Start where you are today. Don't let the problem get any bigger than it already is.
4) Value yourself
You have worth, you need to respect yourself and charge an appropriate amount for the product or service you provide. Many women under price because they are so concerned with what others can afford and worried that people think they are being greedy. I always take clients through the exercise of calculating what they have earned over the past year and dividing it by the number of hours they have invested in their business. It is not unusual to see women quite shocked by what they are earning per hour.
Create a pricing schedule that will help you achieve your goals, provide a good income and cover the costs of your business and stick to it!