Do you make enough money from your business? How can you make more money from your business?
Most people will say that’s a personal question. Me – I’m gonna be honest and tell you that when I started out in business – I was working in a comfortable, well paid job. My little business on the side was paying me very well by most people’s standards – but on top of a good salary – I was raking it in.
I’m not telling you that to brag – just setting the scene.
If you don’t already know me, I was an electrical engineer. I worked for a pretty big company and I worked dam hard for them. I enjoyed my job – but it was an office-type job, and having grown up on a small farm, I needed to do some physical work too.
So I set up a small business installing alarm systems on Saturdays. I cold fit 3 in a good day. Pretty good going. I’m no slacker!
Anyway, my one small business evolved over time into an electrical contracting business. Then I added a soundproofing business. Then an automated entrance business (doors and gates). I was a busy boy and had a good number of fellas working for me.
But the more work and the bigger jobs I took on – the less money I was making. There were a number of reasons for that.
I was spreading myself too thin. I wasn’t able to manage all the businesses properly and work was being completed a quickly as it had been priced for. cost over-runs on our part. Labour costs rising fast. Too many expenses….
But one of the biggest reasons that I wasn’t making enough money – was that I was pricing too many jobs low. Hoping to get the jobs and be able to make the prices up on additional work. Or living in the hope of anther job on the back of one that was priced low to get our foot in the door! More fool me!
Looking back now – I have no idea how, or why I stuck it. Probably too close to it all to be able to see the wood for the trees!
I tell some of my clients – who are doing now, what I was guilty of then, this: “You are standing in a field covered in copper, silver and gold coins. You’re running around picking up all the copper and silver coins, and not looking out for the gold ones!”
That’s true of most small businesses.
Ten years ago – I shuttered all my businesses except the automation. But even then I was running around after every bit of work in sight! I worked 6 days a week and often went back to the workshop at night to do a few hours work. Madness. I was making less than minimum wage when I’d count up all the hours spent running around after little jobs – just to make other people happy.
I realised a few years ago – the only person that I have to make happy is Me (and my wife and kids).
Okay – I won’t set out to piss anyone off either. But I won’t take work on, just to please someone. I’ll take the work that I can make an acceptable profit on. There’s nothing wrong with making a profit – that’s what separates a job from a business. You go to a job to earn a wage. You start a business to make a wage plus a profit.
The thing that lots of people forget is that when you stat a business – you give up all hope of the social safety net. You take on a lot of risk and uncertainty with your own business. Making a decent profit is the reward for taking that risk. Don’t forget that. So how can you make more money from your business?
If you think that you can’t charge more than you do for your work – stop! Get that BS idea you have in your head about your prices (and what’s a fair price) out of your head. Think first about what’s fair on you, and your family. Think “how can you make more money from this business?” Think about all the hours that you work on your business each week – that is not being charged to a customer. book-keeping, doing wages, vat returns, prices, meetings, etc. Lots of business owners think they can only charge for the 40 hours that they may be working on the tools – but you’re probably spending another 5-10 hours, or more behind the scenes – unpaid.
I’ll ask you again – Are you making enough money from your business?
Yes or no?
Then have a think about it… How can you make more money from your business?