How much is your time worth? So many small business owners under value their time and end up earning less than a shift at McDonalds / hour for their efforts – Have you reviewed your pricing lately to ensure that you know that your time is valued correctly?
Your business strategy should start with how you set your price, therefore having a good understanding of the key factors you need to include in your cost model and pricing models is essential. Reviewing these regularly as your business grows and changes is important as the cost of doing business can creep up. If you aren’t keeping up with your costs, you’re potentially making less margin than you think.
Knowing if your new idea or enterprise has commercial value and will make you any money, and when you’ll start to see a profit, are critical factors in your future success.
Here are 5 key factors to work through, to determine your actual cost of business before you set your pricing:
When setting their price, most businesses consider their core income stream. However, there are potentially other passive and active income streams that can be created, which could help keep the price down, without reducing overall business income. Exploring these as part of your business income model, pricing options and packages should be an action every business takes to maximise their income opportunities.
Unless you’re running a charity, you’re in business to be profitable. To be profitable you need to make sure you know your costs thoroughly and that your income is greater than your costs. This week, make it a priority to set aside some time to double check that your business is on track for profitability.
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