Category Archives for "Income"

Setting Your 2022 Financial Goals

Have you set big, lofty financial goals for 2022? And if so, how did you come up with those numbers?

Setting financial goals is incredibly helpful so you have something to strive for, but setting the right goals is vital. If they’re not realistic, you’re bound to feel frustrated mid-year, throw up your hands and give up.

Let’s avoid that by setting your goals with intention and research. Answer each of these questions and write down any numbers and calculations so you have them handy.

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Start Your Year on the Right Financial Footing

Every new year, do you go through the motions of creating a “new year, new you,” trying to overhaul your business and your life to make this year your “best year yet”?

Look no further than your social media feed and you’ll quickly find that you are far from alone. Everyone is encouraging us to be better than before by changing our diets, our exercise regimens, our reading habits, our relationship statuses, our home organization systems, our money management, you name it.

And so many of us buy into it. I’ve been guilty of this too!

Then when we can’t hold onto these new (unattainable) habits, we feel like failures.

What if we try a new way of making progress toward our best year yet? Instead of trying to change it all, try finding little things you can do to make consistent progress in your business. And let’s forget the major overhaul.

This applies to any resolutions and changes you want to make in your personal life, but let’s talk about how to do this in your business.

Do CPR on Your Business

We’re not trying to breathe life into your business, we’re doing what’s Consistent, Predictable, and Repeatable. CPR.

What are the little things you can do to make consistent growth in your business? It’s not about overhauling your finances so you can set yourself up to be profitable next year; it’s about consistently allocating to your Profit account—starting with just 1% a month, if that’s where you have to start.

Make it a habit: Twice a month, transfer 1% of your revenue to Profit. Once you’ve established this habit, increase that allocation to 2% or 3%—whatever works for where you are right now.

Not sure how much to allocate? Grab our free Profit First Overview and learn what your percentages should be based on your current revenue.

As you become more consistent in your allocations, they start to become predictable. You know that on the 10th and 25th of each month, you’ll have a financial date with yourself to make those allocations. And you’ll hopefully start to incorporate other pieces of the financial pie in those dates, like reviewing your balance sheet and profit and loss statements, checking in on your expenses to see if there’s anything you can let go of, and planning for future purchases.

Consistency and predictability will help you to create more systems so that everything you do is repeatable, without recreating the wheel each time.

Some ideas for systems around your financials include:

  • Create an allocation calculator that allows you to plug in your numbers so you don’t have to do the calculations yourself each time. (Our clients have access to a robust tool that does this—and a lot more—for them.)
  • Create a task in your project management system (or use a Google Doc), listing out what you’ll do on your finance dates. Then there’s no question about what you need to do and your finances are always up-to-date.
  • Even if your finance dates are only once or twice a month, make it a point to enter transactions more often so you’re not overwhelmed during your finance dates. Or, hire someone like us to do this for you!

You Can’t Do it All

One of the biggest challenges to setting new goals and intentions in the new year is that we want to do it all. We want to learn new things, launch new offers, set new revenue goals. But there’s only so much time in the day, especially if you have some personal goals and commitments you want to keep.

Joining mastermind groups and coaching programs and buying courses is fine, but know what you want to prioritize learning. Then do that and only that until you’ve mastered the concepts. Only then should you focus on doing something else that’s new.

If you want to lose weight, you know you need to focus on nutrition, fitness, and mindset. But if you’ve been off the wagon for a while, you really can only focus on one thing at a time. Determine what’s most important to start with and do only that for a month, then add in the next most important part of the process and so on.

Just like if you’re trying to overhaul your health, trying to do everything at once is a recipe for overwhelm. If you’re trying to “fix” all the things in your business at once, you’ll stress yourself out and not make progress on anything.

This really is an exciting time of year and it’s ripe with possibilities. What one thing will you choose to start with to become Consistent with, so it becomes Predictable, and then Repeatable? Where will you start your success in 2022?

How to Talk to Your Clients About Raising Your Prices

You’ve determined that it’s time to raise your prices. How do you communicate this to your clients and customers?

First of all, don’t make it sound like you’re breaking bad news. Raising prices is a natural and recurring step in the life of a service-based business. Know your worth. Get confident and comfortable in your own head of the value that your business provides. If you can’t convince yourself that a price increase is warranted, then you won’t be able to sell it to anyone else.

Obviously, you don’t want to alienate your clients. You want to keep them happy. And believe it not, your clients don’t just want you to survive—they actually want you to be profitable. So this can absolutely be a win-win situation if you play it right.

You especially want to get your long-term clients on board with a price increase. If they’re unhappy, they have the potential to spread their discontent throughout your culture and community of members. This is the kind of water fountain talk you want to avoid happening at your place of business or on social media.

In this post, we offer some suggestions and thoughts on informing your clients about pricing changes. At the end of this post, you can find a link to our pricing increase template letter to help make this task easier for you.

  • For starters, always give 30 days notice when raising rates. You don’t want clients to feel like they’ve been rushed or ambushed into a new commitment. 

  • Put it in writing—at the very least, you should send them an email.

Keep in mind, your clients will view a rate increase relative to the price they’re currently paying. A $6 per month bump might seem like no big deal, but if their membership fee is already $80 per month, that’s a 7.5% increase in price, which may not go unnoticed—especially if they’re currently paying a higher-than-market price for your service.

  • Transparency in general can go a long way toward sweetening the news. Explain exactly what you’re doing, why you need to do it, and make it relevant to them. If you made a guarantee to provide a certain level of service as part of their membership agreement and now you need to increase pricing in order to maintain that level? Explain that. 

People get attached to their service providers especially in fitness and wellness. They care that they are compensated fairly and have good working conditions and opportunities. So your clients will usually get behind an argument for increasing rates that involves paying their service providers more, or investing in your team in some way. It’s more than fine to get a little personal about this in your email.

As I’ve said recently, I’m in favor of increasing prices regularly by small amounts rather than by large amounts less frequently. Clients are more accepting because they’re likely to see that you’re just keeping up with the rising cost of doing business. But there are times when a large price increase is justified—to you, at least.

  • If you’re implementing a small increase for the cost of doing business, say 2 to 3%, amounting to a few dollars more per month, it’s okay to simply inform your clients of this and invite them to contact you with any questions or concerns.

  • If it’s a bigger increase, however, it might be a good idea to sit down with your clients one-on-one, or give them a call, in addition to sending an email. 

The important thing here is to demonstrate how they’ll benefit from the improved services you’ll be providing with more funds in hand. Even better if you can tie it in directly to how this will help them reach their goals or soothe their pain point.

Maybe you’re going to improve the temperature control in your building so they won’t be chilly anymore while getting a massage. Or maybe you’re adding new equipment so they won’t have to wait in line to use the weight machines, and they can get home faster to their kids on gym night.

  • If you’ve been seriously underpriced in the past and now need to get in line with the market, you probably need to be adding more services to justify a very steep increase. I’ve seen a gym membership cost jump from $59 to $100, but they changed their business model to do that by adding new equipment and more programming at the same time, like additional access to coaches and classes. 

In general, if you’re not comfortable asking your clients to ride the increase with you, ask yourself if there’s something you need to add in to your services so that you ARE comfortable charging an increase. 

And because we know it’s hard to ask for money, sign up below to get a free pricing increase template letter you can use.

Your Black Friday Deal Probably Needs a Drip Account

Did your business promote a Black Friday deal this year? If so, now’s the time to set up a Drip account within your Profit First system—before you spend the revenue that you made.

What’s a Drip account?

It’s an account you create to help you manage the cash flow when you receive a lump sum payment instead of installments for a service or offering that you’ll be providing to your clients over a long period of time.

Maybe you’re selling a discounted annual gym membership to customers who pay upfront for the year in full. They’ll be using your facilities and your resources over the course of 12 months and your expenses to service them will be accruing over that same period of time. So it doesn’t make sense to treat their full payment as money in your pocket now.

Instead, stretch their payment out over 12 months even though you’ve received it all at once. The sensible thing to do is to place the revenue in a Drip account, then take a proportional amount of the money and “drip it out” each month. So you’re matching revenue with expenses on the same timeline.

If you don’t allocate this money correctly, then it’s just money without a plan, and you’re in danger of spending it. We see this a lot: businesses in year-round “Black Friday mode,” trying to sell annual memberships, or offering other long-term, one-time payment deals, because they’re always needing a large influx of funds—to pay for services they sold months ago but don’t have the resources to cover now.

As one of the biggest spending days of the year, Black Friday is a classic time to offer special membership or subscription deals. But your business should use a Drip account for any similar payment structure regardless of the time of year. Retainer fees, sales of packages and bundles, pre-payments—these all might warrant the use of a Drip account. 

Here’s an example of how to use your Drip account for annual membership fees paid in full up front.

  • Put each lump sum payment into the Drip account.
  • Automatically transfer 1/12 of the amount to your Income account every month as if you just received the revenue (in two payments on the 10th and 25th as per the suggested Profit First schedule would be great).
  • Proceed as you normally would to allocate the funds by percentages—into OPEX, Owner’s Pay, Profit, Tax, Payroll, and any other advanced accounts you’ve created within your Profit First system (the Drip account is considered an advanced account as well!).

Of course, if the membership deal is six months instead of 12, or if it’s an unlimited package deal for three months, then you’d prorate the funds accordingly. You might need to create multiple Drip accounts if you have multiple levels of deals on offer. You can also book a call with a professional to help you determine how much to drip each month.

Trust the Drip account system. 

Don’t be tempted to move more than 1/12 of the Drip account funds into Income every month. Can you see how you will end up overinflating your Profit First accounts? OPEX will definitely be too high, and you will mistakenly think that you can spend more on expenses—which could topple your whole Profit First system.

With Owner’s Pay, this inflation can be especially dangerous. If you’re an owner who withdraws the full amount from your Owner’s Pay each pay period, you’ll be paying yourself prematurely for services not yet rendered. (And you know we advocate for building a buffer in Owner’s Pay. Determine a living wage for yourself and withdraw that every month, leaving the extra for when tough times hit. True, Owner’s Pay will grow as your revenue increases, but you should be making calculated decisions to increase your Owner’s Pay allocation percentage using accurate earned income figures from previous periods.)

Similarly, you might think the Drip account should only be for setting aside some OPEX monies, and you can do what you want with the rest. Which would be…? Putting it in Owner’s Pay? Or Profit? You can see how you run into the same problem.

Black Friday shouldn’t put you in the red.

When you do offer long-term, prepaid deals, you need to price them appropriately to cover your expenses that will accrue over time. You’ll probably need to pay yourself or a team member to work with the client, so factor in payroll expenses. Don’t forget rent, utilities, insurance, and anything else that falls under OPEX.

You may think of offering deep discounts for existing services to get people to sign up. But consider how you can add value to your product offering instead of discounting the price. Throw in a free month of a nutrition app with the purchase of a gym membership, or add a free massage for buying a bundle of ten at full price. We’ve encouraged you to get creative to incentivize your clients in an earlier post.

We caution you against relying too heavily on “paid in fulls” to sustain income. Monthly recurring revenue models are much easier to manage in terms of cash flow. As you head into the new year, what are some ways your business can create excitement around a monthly subscription rather than waiting for the next Black Friday to roll around?

Mindset of Paying Yourself a Living Wage

You are committed to the success of your business. Your business’s health and wellness allow you to live a full life, make your mark on the world, and help support the lives of your clients and team. You spend so much time taking care of the things and people who keep your business running, you forgot to financially support one of the most critical pieces of the puzzle—you!

The reality is that paying yourself a living wage is about MUCH more than dollars and cents. Creating a living wage for yourself (and paying it) reflects how you feel about yourself as an individual and business owner. Becoming aware of your money mindset and how it holds you and your business back is a crucial step towards your financial health, success, and freedom.

But do you know how to determine the right living wage for you? It’s important to examine why you’re waiting to pay yourself the big bucks and how to assess where you are now to create a brighter future.

What is a living wage, anyway?

The first step to finding out how much money you need to make a living is to know what a living wage actually is. We’re not talking Ramen noodle living; we’re talking about normal everyday living. Spend some time thinking about what living really means to you and how much you need to finance it.

Ultimately, your pay is about more than numbers and spreadsheets. Mindset shifts around determining your owner’s pay can bring up feelings of guilt and even unworthiness. Depersonalizing your salary is a great way to sidestep any residual emotional issues around money. Determine what you feel is a fair wage for someone else, and pay yourself at least that much—minimum!

Do you want to work in your business for the rest of your life? If you are like most business owners, the answer is probably no. But if you’re not paying yourself a livable wage to do your job, how will you ever be able to hire someone to replace you in the future?

You can’t.

Check out our blog to learn more about how to determine your Profit First owner’s pay allocation.

Why should you pay yourself?

As a mature business owner, you might be waiting to pay yourself until you can sell your business for the perfect ROI. The truth is many entrepreneurs who have waited for the pot of gold at the end of the rainbow never see their payoff.

Living for what might happen in the future compromises your quality of life in the present. Putting Profit First in your business today helps you gain more financial clarity to help you reach future goals.

Fast forward to when you have your Profit First strategy in place. Your business fully supports your desired lifestyle, but you have “extra” money. Your first instinct might be to leave the surplus (the profit) in the business, but the best option is to pass the extra into your personal rainy day fund.

Transferring half of your business profits to your personal accounts on a quarterly basis and essentially paying yourself creates benefits to the owner. Moving your money out of the business and into your personal account creates a buffer if your business gets sued.

Additionally, the act of transferring your money into a personal account has the potential to make you more money in the future if you do decide to sell. On paper, a large portion of the financial value of your business is determined by the amount you have paid to yourself as the business owner. Typically, sellers can determine the sellable value of their companies by doubling or tripling the amount of income they received as the business owner.

By implementing Profit First and adjusting your money mindset in the short term, you are increasing the value of your business in the long term—and improving your quality of life!

If you’re ready to implement Profit First but aren’t sure where to start, reach out.

We’re happy to help.

Don’t be Eligible for the Next Stimulus

As I write this, the latest round of COVID-19 related stimulus checks are starting to hit bank accounts. People and businesses are hurting, and some relief is welcome.

My purpose here is not to debate the merits, the methods, or the size and scope of the bill that allows for these payments.

My purpose today is to start you down a path where your business is so solid, and your finances are in such incredible order, that next time you won’t be eligible for checks like these. To have a business that is resilient and able to weather the inevitable storms that come our way. A business that is able to generate the kind of cash flow that allows you to pay yourself and your team generously, pay your taxes on a quarterly basis, and build a “core capitalization” account that makes sure you have cash on hand when “stuff” happens.

It can be done, it has been done, and you can do it too.

At Fit For Profit, we contribute to building your business like this in two primary ways.

First is world-class bookkeeping. You have got to keep your books in order if you want to maximize the benefits of owning a business. Tax law favors the intentional and prepared. If every time April 15 rolls around you are running around like a headless chicken, stop it. Trying to get a business line of credit without good books? Yeah, good luck with that. Did you struggle to put together the paperwork for EIDL and PPP over the last year? A good set of books could have saved you a lot of hassle. And do you really want to do the books yourself? You could. There’s a lot of things you could do. But should you?

The second way we help you build a resilient business is through implementing the Profit First Cash Management system. Having your books in order is one thing. But having a system that puts every dollar to work in the right place at the right time takes your business to the next level.

When it comes to making strategic business decisions related to cash flow, cracking open QuickBooks doesn’t cut it. It’s a lagging indicator – it tells you what has already happened. At Fit For Profit, we guide you in implementing a system that allows you to see in real-time what is happening, and provide a logical way for forecasting what will happen. All while helping you create a more valuable business, for you, your team, and your clients.

Most of us have some mindset work to do when it comes to money. If you are getting a stimulus check, have you thought about how you are going to put it to best use? What will give you the most bang for the buck? Think invest, not spend. Some may think it’s a lot of money, and some not very much at all. But either way, it’s more than you had yesterday. How you use it can say a lot about how you view money.

Look, you can’t change what has already happened. If you are in a hole, put down the shovel and stop digging. Truth be told, I used to be horrible with money. Truly terrible. Debt out my ears, owed 5 figures to the IRS, the whole thing. There is a way out if you are willing to do the work.

And next time?

Personally, I’d rather there never be a “next time” for pandemics, or business shutdowns, or stimulus checks. But if there is, what are you doing now to be better prepared? To be “not eligible”? Building a better business means building a better future for you and those you care about.

We can help you make it happen.

Revenue Streams or Trickles?

There is a lot of thought/opinion/advice when it comes to diversification and creating different revenue streams within a particular business model. The “don’t put your eggs all in one basket” theory. And it sounds good. If one “stream” starts to dry up, another one will help mitigate total disaster.

Here’s the rub. Too often in a business, I see “multiple streams of income” become “throw a bunch of stuff on the wall and hope some of it sticks”.

When it comes right down to it, how many Revenue Streams does it take to have a great business?

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Steady Salary Amid Uneven Revenues

I started my business as a tax preparer before I started serving as a Profit First Professional. One of the major issues of my business was the uneven revenue throughout the year.

From January to April, revenues were strong, so I paid myself a lot–and frequently. But after April 15th, revenues would drop dramatically. I’d be able to pay myself from the excess throughout the summer. But fall and winter months, I was barely able to pay myself anything from the business, if at all.

Here’s how Profit First allowed me to pay myself a steady salary throughout the year WITHOUT having to earn extra revenue:

Set-Up

The Profit First system required that we set up our 5 core accounts, and allocate predetermined percentages to each account. The core accounts are income, profit, owner’s pay, taxes, and operating expenses. Here, we’re going to focus on owner’s compensation because you deserve to be paid for the work you’re doing!

Lifestyle Lock

It’s important to establish a lifestyle lock amount, the amount you need to maintain the lifestyle you want to live. It’s what you will pay yourself each month, consistently.

The lifestyle lock puts a limit on how much you will take from your owner’s compensation account, no matter how much money is in there, to support your lifestyle. My lifestyle lock number was $3,500 a month. So, during tax season, even though my owner’s compensation accounts easily had more than $10,000 in there, I’d only pay myself my lifestyle lock number ($3,500).

Slow Months

Revenue would still come after tax season, but much slower. But because I only paid myself the lifestyle lock number, I was able to pay myself consistently throughout the year from the owner’s compensation account, well into the fall.

The post-tax-season revenue, although much slower, would make sure that money was still being allocated to my owner’s compensation account. And there was extra revenue built up there from tax season to make up for that lower revenue. The end result was being able to now pay myself year-round, as well as greater confidence in my business’s finances, and a much happier wife (true story).

No-Revenue Months

Every year, especially since implementing Profit First, I have at least one month where I do not generate revenue. Using the lifestyle lock helped (and still helps) me to take a month off, but still be able to pay myself in full. This is huge because typically when solopreneurs stop producing revenue, the impact on the salary is normally felt immediately. The lifestyle lock helped me to break the month-to-month, check-to-check cycle.

Conclusion

Profit First works and paying yourself with your own lifestyle lock works wonders for any business owner who experiences high seasonality with their income. It offers peace of mind for yourself and your loved ones and takes the stress out of the question, “Where’s my next paycheck coming from?”

If you’d like to learn more about how to even out your salary or take-home pay using the Profit First cash flow management system, we’d love to see how we can help you. Schedule an appointment, and we’ll talk about it!

Why You Need to Reverse Engineer Your Cash Flow Goals

As a gym owner or someone working in the health and wellness industry, you know that revenue fluctuates throughout the year.

During the fall and the holidays, clients aren’t as responsive or working out as much–either because they’re busy with work and family or because they don’t want to feel bad about not following their health plan. At the beginning of the year, things pick up as people set resolutions and goals…but then taper off after a few weeks or months. Then, of course, there’s beach season where clients are ready to dive back in. And around and around it goes.

All this fluctuation in client commitment results in a fluctuation in revenue. And it’s enough to give you a headache.

After all, your operating expenses don’t fluctuate that much, and you’d like to collect a regular paycheck that you can count on.

That’s why reverse engineering your cash flow goals can help you stay on budget month to month and ensure you’re spending (and saving) the right amount to meet your operating expense needs.

This is why it’s so incredibly important to have a bookkeeper on your team to help explain your financial data to you and what your financial reports mean. A bookkeeper can also ensure that you’re staying within your budget each month, even on those slow months.

Here’s how reverse engineering works:

First, you’ll need a profit assessment to determine exactly what you’re making in your business right now.
You also need to take a good look at your P&L statements–over the course of a year. Determine what your average operating expenses are each month (total OPEX for the year ÷ 12 = average OPEX each month).
Are you making your average OPEX each month?

Typically, the answer is no. But the idea is to allow your busier months to make up for your slower months.

And if you’re spending more than 45% of your revenue on OPEX, chances are you’re not paying yourself enough. It’s time to find ways to lower your operating expenses.

But I can’t lower my expenses any more than I already have.

That’s what you’re thinking, right? I get it. Ask yourself this: Are you legitimately getting 100% value out of everything you’re spending on right now?

Do you need two team members covering the front desk when the gym is slower?
Is it necessary to buy that equipment this month?
Can you negotiate a better rate on your insurance?
Is it possible to let go of some of your equipment leases?
Can you reduce the frequency of equipment maintenance because usage is lower?

With your Profit First advisor, go through your expenses line by line and look at ways to reduce spending so you can get your OPEX more in line with where it should be. You’ll be surprised at where you can find money!

We’re happy to help you with this process. Schedule a call with us today and let’s reverse engineer your cash flow so you can start hitting your goals.

Pricing Tips from Erin Haag’s Success Story

In this week’s post, we are going to be catching up with Erin Haag, whom I have known for a couple of years now. We met when Erin owned a fitness studio and she needed to implement Profit First to make her business better than ever. 

Erin’s Success Story

Erin owned a pilates and yoga studio in South Florida for nine years, but prior to that she worked for a whole bunch of different companies in corporate sales. You name it, she did it! We’re talking the weight loss industry, wellness centers, nutrition, medical spas, cosmetic surgery centers, and laser hair removal. She helped make millions of dollars for other people and then she was laid off during the financial crisis of 2008. 

At that time, she decided she was done making money for other people and that is when she used all of her strategies to open her pilates and yoga studio. Erin had a pretty successful business. She paid herself from day one and her business was profitable. However, about five years in, she had two kids under the age of two. She was working 50 plus hours a week and hadn’t taken a vacation, let alone a day off in forever. 

The final straw for Erin was when she was hospitalized twice within four months. The first time was for a kidney stone that brought on an infection and the second was for viral meningitis. She was released from the hospital on her oldest daughter’s second birthday and she realized something had to give. 


She began to make shifts within her business. She did that mostly with her pricing and by automating her systems, but she basically changed everything. When Erin and I began to work together, she went from a 4% profit margin to a 47% profit margin. She also started to pay herself a six figure income and began to work only five days a week. 

Erin began to work with me about eight or nine months before she sold her studio. In that time, she saw her biggest growth. In the six months from the time she listed her business until the time she sold it, her business became completely debt free. Erin also sold her business for forty times her original investment. 

That was all cash in her pocket! 

Since that time, Erin has been helping other boutique fitness studio owners, gym owners, and people within the wellness industry do the same within their business. 


I love hearing success stories like Erin’s! But you know that she had to have a few points in her story that were not all that glorious! And that is what allows everyone else to relate to her story! 

Making Changes to Your Business Model

One thing that Erin loves telling people right now is that if you are planning to start a business, now is the time to do it. She started her business during a financial crisis and everyone thought she was insane. But her business thrived and the businesses that are lucky enough to make it through and get to the other side are going to be so profitable and successful. 

And if you currently have a business, now is the time to make the necessary changes in your business. You now have the perfect excuse. One of the biggest changes you can make right now is pricing. You really have to analyze your pricing and take a look at it over the last eight months. 

Then ask yourself, “Have you really continued to maintain a profit margin? Have you continued to have a steady flow of cash?”. If the answer is no, then Erin and I can both tell you it’s due to your pricing. If you are still charging a per session class pack, then you must change it to a recurring revenue model. Switching your pricing model is the only way you can guarantee sustainability. 

You may not believe that your business problems are tied to your pricing, but ask yourself if you did the proper analysis when you created your pricing. Did you analyze your pricing or did you simply charge whatever your competition was charging or less than what your competition was charging? We have seen the latter so many times and those owners are simply not making a profit. 

Pricing Tips – How to Find Your Pricing

There is actually a formula for creating profitable pricing for your business. The first step you have to take is determining what your minimum monthly sales goal must be. You will find this number by adding in all of your operating expenses, your payroll, your liability, your debt, and your owner’s pay. 

This will give you your monthly sales goal. Once you have that number, you will need to do an analysis on your capacity. Then your capacity will tell you what your monthly client value needs to be. This is basically how much each client needs to be worth to your business based on your capacity. 

Let’s use $150 for an example. The $150 will be the pricing point for your mid-range package. You would then create pricing that has a weighted price for single services, which will be intentionally high. This will discourage people from purchasing a single class. 

The larger commitment packages will be your bottom line number. 

Conquering the Sale

Erin uses what she calls the client flow when conquering the sale. The client flow basically goes from when the client first contacts you all the way through to the collection of money. It’s going to be unique for every business and it must be individualized for every client. By the time you are collecting the money from your client, they will know exactly what you have to offer for their life, how you fit into their budget, and how you fit into their schedule. 

Remember, that your goal is to solve a person’s problem, not simply collect their money! If a client begins to object, answer their question, reconnect with their pain point, and position your service as the solution that will solve their problem. You’re only asking them to commit to solve their problem. 

Both Erin and I recommend using a checklist type script, so you make sure you remember to share everything with your clients. You don’t have to go down this checklist in order, but you do need to make sure you cover all of the points. This will ensure a potential client has all of their questions answered when it is time for them to make a final decision. 

A client will contact you because they are interested. Therefore, if a client ends up saying no to you, something happened within your client flow. A step was missed and you allowed the client to slip out. This is why you need to be confident that you have everything your clients need. 

Your Ideal Client and Pricing

You have the choice to be the best, the cheapest, or the most efficient. You can’t be all three though. When you are setting up your pricing, another pricing tip is to remember that you’re targeting your ideal client. Your ideal client is going to be able to afford you, especially if you are doing the right type of marketing. 

Profit Margins

Once you have your pricing in place, it is a good idea to do a profit analysis. Determine what your current profit margin is, so you know which direction you are headed in. This will allow you to make adjustments to your pricing and expenses, so you can be where you should be with your profits. 

As soon as you have everything where you want them to be, you can work on the systems you have in place. This will ensure that everything is ready for when clients are walking through your door. Those systems will also allow you to re-engage with existing clients and transition those clients into more profitable packages. Those steps alone can help you increase your profit margin by 95%. 

The reasoning behind that is those clients are your cheapest clients. They are already in the door and you don’t need to convince them of anything. They love you and want to continue to work with you. 

You may be worried about increasing your prices right now in our current situation, but Erin says now is the best time! People are actually expecting price increases right now. Since you may only be operating at 25% or 50% capacity, your clients understand that you need to charge more. 

Besides, you should have been increasing your prices every year since you opened and most likely, you haven’t been. A 3% to 5% price increase is normal. After all, your rent likely increases 3% every year and your taxes and expenses increase, so why shouldn’t your prices? So, now is the time to get your prices into current market value. 

Learn from Erin’s experiences and pricing tips and price your services properly. You will have a healthier profit margin, can pay yourself more, and hopefully have systems in place that will allow you to work fewer hours than ever before! 

It’s a win-win for you and your clients! 

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