Listen Now:
Whether you’re a coach or a service provider… chances are you’re still charging by the hour. And while there are better ways to leverage your expertise… the fact remains that you may still be charging too little for the hours you do spend.
Sylvia Inks will help us approach our pricing from a perspective that will root your pricing in fact – not just “what you think you’re worth”… but how much you REALLY need to get paid in order to make this business thing worth it.
If you want to truly take charge of your business, you've got to Master The Money. Sylvia's program will help you do just that.
Find Sylvia on Facebook
Connect with Sylvia on LinkedIn
Alyson Lex
There are a few ways that our business can grow, to get more customers, get them to buy more things, or get them to pay more for what they're already buying. It's that third one that we're going to focus on today, because so many people do not charge enough for their products or their services. And Jenny's waving, Hello. I'm not waving Hello, because I'm working on this. But today, we have Silvia inks with us business coach and financial expert, who is going to help us discover exactly how we can stop charging too little, so we can grow our income. Thank you for being here with us, Sylvia,
Sylvia Inks
thank you so much for having me.
Alyson Lex
Let's start with some of the biggest challenges that you see service based business owners, I'm talking coaches or copywriters, or funnel builders, or people who tend to trade dollars for hours. What are some of the big challenges that they struggle with?
Sylvia Inks
You hit it right on the head, right? Just charging by the hour? Definitely, there are smarter ways than trading your time for for money. So definitely, the biggest thing I see is that a lot of software service based business owners, they're just not making a healthy profit in their business. They're working more hours, and they had wanted to when they started their business or can. So they're working all hours that night. And a lot of it just comes down to not budgeting, understanding how much it takes to run their business. And that way, that's why they're not making a healthy profit because they haven't priced appropriately.
Jennie Wright
That makes me question and ask a follow up question to that. Which is because I'm in a service based business, and since its inception, I have treated dollars for hours, most of the time, starting as a VA, going into OBM, online business manager, coach. And I do have a little bit of one to many in terms of having a course. But for the most part, I'm still doing that charging by the hour, when you say that they're not budgeting and they're not understanding how much it takes to actually run their business. Can you tell us a little bit more about that?
Sylvia Inks
Yeah, absolutely. What I mean by that is that, when I asked probably nine out of 10 times, small business owners tell me they don't understand their operating budget, they don't know what their expenses are, their average expenses are to run their business. So this is, this includes monthly obligations of subscriptions and things that you're paying for to keep the lights on in the business. And the big ones are the gotchas or like those yearly obligations, sometimes there's, there's those things that you, you know, a lot of times we'll get hooked and say, Oh, if we play up front, well, you know, save X amount of dollars, right? And then all sudden, it's like, oh, well, I don't get billed for a whole year, and you almost forget about those expenses. So also when you put together your monthly bills that come out, but as well as those yearly bills, also, there's an average monthly obligation that you need to be making every single month to have enough cash just to pay basically, the subscriptions and bills and insurance premiums, whatever, you have to run your business. So whether or not you have clients coming in, you actually have a certain amount that you have to be making every single month.
Jennie Wright
I have another follow up question of that as well. Funny enough, a lot of people who are working online and who are entrepreneurs tend to be more of the creative space people, and may not be predispositioned. To working in spreadsheets and knowing their financials and knowing their numbers. Allison, I love knowing our numbers. We're very big on that. But what if you're not one of those people? How do you, Sylvia, tell your clients or get your clients on board? with understanding that they need to know their numbers was? How do you do that with
Sylvia Inks
them? Well, I definitely have a program that I work with my clients on to make it as simple as possible. And really, it's just coming down to just gathering all all the subscriptions that you have. And just put it in one place. Like even if you're not, even if you're not a numbers person, just seeing it all in one place is like the big aha, you know, I get clients that say, Oh, my gosh, I had no idea that these subscriptions were coming out or Oh, I never use this tool. So just even getting in the pocket of like, hey, let me just see what are the things that come out and just go to, let's say 123 months of your bank account or credit card statements and just take a look. Because those are where I you know, I've helped clients find almost $1,000 with their subscriptions or expenses, or, you know, networking events that they're like, I don't even use this anymore, I forgot that I signed up for it. Um, so just even just taking that baby step of like, let's just take an audit, just take a look at what things are coming out. And that's just really where I start with a lot of the creatives, because I do most of my clients tend to be the creatives they don't, you know, they don't look at numbers or they honestly they rely on my clients that have never come from families that talked about money. I actually came from a family that talked about money all the time. So like I you know, for me, it was always look at your numbers, look at your numbers. So it's you know, just really Taking that baby step and just say, Okay, let's just take one step at a time and see and gather on just one place where all our numbers were, where all the money's going out.
Alyson Lex
You touched on something, I think that's really important. And that's kind of how you come up how you're raised, how you grow up, really begins to affect the way that you interact with money. I used to be a big time avoider. Like I remember one time I was so broke, hashtag transparency, I was so broke, I didn't have money for bills, I was really like, shameful of it. And so what I did was just not check my mail. Because if I don't check my mail, the bills don't come. And my mailman, couple of them knocked on my door one day to make sure I was okay, because my mailbox was so full because I was not getting my mail. And that was kind of my wake up call, like, Okay, awesome. It's time to maybe not avoid so much. And I had to work to change my money story. And so when you brought that up, but that just really resonated with me. Do you think that that kind of money story is maybe why service based business owners don't charge enough for? Why do you think that is?
Sylvia Inks
Absolutely, it really does have to do with your money story growing up, whether or not you avoided money. Or if you heard money scripts, like, Oh, you know, being rich is, you know, a bad thing, or being rich is greedy. So then all of a sudden, I see a lot of small business owners, they feel bad charging a lot, right, they want to price themselves so that everybody can afford them. So definitely the money scripts that you heard growing up really do affect you. So there, there's a lot of money mindset, just scripts that you know, changes similar to what yourself like, you know, making sure that you understand the value that you're providing, as a business owner, and just slowly start changing that money script for yourself.
Jennie Wright
Think that money script plays into a lot of people's way. You know, I when I was growing up, money wasn't really talked about it was a bit of a taboo, like, don't ask what we make my parents were entrepreneurs. My dad was a, I don't know, if it falls into the entrepreneur, my dad owned his own business, he was a mechanic, and my mom ran the books. Right? So we had four gasp a story for her bays and a gas bar and 12 pumps. And that's the war, the world I grew up in, but money wasn't really talked about. And I do understand completely, because I've worked with many entrepreneurs who feel like, the pricing thing is a big deal. They want that, you know, they want to be able to serve everybody and they undercharge profusely, right. So what is what else is holding people back because they, they really want to help everybody. And they really want to help everyone to buy their stuff.
Sylvia Inks
Yeah, again, it really comes down to really understanding the value in the transformation you can give someone right or the service that you're providing to someone, because people are going to pay for things for your services, if you're going to save them time, or help them make money. So if you can show someone, okay, if I'm charging $1,000, you know, let's say for the service, but you're going to make the ROI up in three months, and then you're going to continue to make money. Like I think that's where, you know, if you're, if you've been in business for a while, take a survey of all your customer testimonials and results and start tallying those up and seeing are you saving people, you know, months of times three months, four months, six months of time? You know, can you put them number behind that? Or can you say that you've helped, you know, your clients have an ROI, they were able to get an ROI, 100% ROI within three months of hiring you so if you can start pulling those numbers, that's where you're gonna start getting more confidence in raising your prices because you're gonna be able to say, hey, by hiring me, you're gonna get this transformation or you're gonna have this result.
Alyson Lex
How does one go about raising those prices without alienating or affecting or pissing off your current clients? How do you make that happen?
Sylvia Inks
This is a great one that comes up a lot. A lot of times I see business owners they will give an ample notice right they'll say and they will you know don't chart don't just surprise your customers and say hey, next month your prices are going to go up especially if they're longtime customers I would give you know three months to six months and say you know as a courtesy you know, just wanted to let you know my pricing has increased but for existing customers. You know, since your longtime existing customer my price, you know, this won't go in fact until x date right and give them plenty of notice. So that way it's not a surprise. Another way you can do it is you know again show the value show you know put in well what are things did you get an extra certification or you know, are there things that you're bringing to the you know, the package the pricing that they are the services that they're buying in, to in? Are you going to be delivering extra things So just being able to translate that to like, why why your price is going up. And sometimes you may just have to say your, you've decided that that customer is worth it, and you're grandfathering the men and they're gonna, you're gonna let them stay at that price. But then you need to make sure that it's very clear that new customers are going to be paying another price. So that's a really good habit, like, especially a service based business owner is making sure you know, when you're quoting prices, say, you know, your pricing is good through x date, right? Like when people hire you, and then say, Hey, this is you know, this pricing is for you, but may change for future clients. So, you know, really making sure that people, you know, don't, you know, especially if they love your services, don't have them going to like, you know, other people and say, Oh, well, you know, Jenny's only cost this much for the service, go hire her, but maybe you've doubled your prices since then type things. So I
Jennie Wright
actually ran into that exact situation. The weird thing I'm hearing, it's not really weird, but it's very interesting to me, is that this whole thing about pricing, what your worth, is not necessarily so much about the money in some ways, it's actually about the mindset. And I find it very interesting that, because I used to do accounts payable and receivable for a large company. So I have the understanding of a p&l, and I have an understanding of that. And I actually have documents built into my business, where I'm future casting on my, you know, my projected earnings for the next month, in the next month, and etc. And I know what my burn rate is every single month, like I know what I'm churning through every single month, including my year lease, because I don't want any gotchas. But the mentality around this, it must be really interesting coming from the financial background that you have, or the understanding that you have to also have to coach people on the mindset. And I'm just wondering, what is the what is something that you can share, that helps people embrace, raising those prices, because I tried raising my prices in the VA. And the pushback made me feel horrible. And it just it really, it really stopped me from doing it. And to Allison said, raise your frickin prices?
Sylvia Inks
I would you know, I have a colleague who recently called it a brag book, so but really having a list of what are the testimonials or the huge results that you've gotten for people, and then when you do get those push backs, you can say, Oh, well, you know, I helped, you know, I recently had a client that had XYZ, they were able to get an ROI, or they were able to do XYZ after hiring me. And just keeping a list of that. So it really is kind of your brag book, and, you know, can help you with sales conversations with pricing conversations, maybe even for marketing copy, as well. And just really reminding yourself, hey, here, you know, I am awesome. Here's the things that I've been able to do for my clients and being able to, you know, use that as proof point of, you know, here's how much value you can provide to your customers.
Alyson Lex
I think two, there is an element of being okay to lovingly let them go. And that's, I think, really hard for a lot of people, it's hard for me, especially because I tend to be friendly, or even friends with my clients. And I don't want to lose the relationship, but to lovingly let them go and say, I totally understand if this isn't gonna work for you anymore. Sorry about your luck. I don't know how. Right, but I wish you the best. And I hope that we can stay friends, you know, is there. Is that an option?
Sylvia Inks
Yeah, that's definitely an option. And, you know, certainly I'm hoping that those people will still say on your email list. So hopefully, you've got an email, you know, a consistent email marketing, where they can still get tidbits or tips from you on a weekly basis. So if for some reason something changes in the future, you know, they may or you have another program that comes out that there, they'd be willing to, you know, hire you again, but definitely, to your point, you know, it is being okay to let go some of the customers that you you know, have were undercharging yourself for because the next time What if the next client that you you know, next prospect is double, you know, would pay double what that client was paying, so then all sudden, your times freed up, and now you're getting paid two times more.
Alyson Lex
I love that. And so earlier, when we were talking about the monthly budget and the yearly gauchos, we were really talking about the operating what it costs to run the business. We didn't talk about the profit. And I know that the temptation is just to take that whole chunk of profit and say, Hey, payday, is that the right thing to do? Do you have a better system for actually managing money when it comes in, in a healthy, proper way?
Sylvia Inks
Yes, I do. And I do talk about that a lot in my own program, but certainly, I could talk about it high level here. You know, definitely having the money coming in making sure that you have your money set aside for those operating expenses. Also, making sure that you save aside money for those yearly expenses. So making sure you know What those, what that total number is that you need to save aside monthly so that when those yearly bills come, do you have the cash to pay for it? The one thing that a lot of people small business owners tend to forget is taxes. So again, you have to have an accounts where you set aside all the money for taxes or taxes that you owe, whether it's for your services or products, because certainly, especially especially if you're in a state that collects sales tax, that's money that's already accounted for, you need to be able to pay your state back for those taxes. Right. So certainly, you know, and then once you cover that, there's also the emergency fund. So I see a lot of small business owners who don't have an emergency fund set up for their business. So if you don't have one of those setup, you know, certainly you don't want to take all the profit from the business, because really, you need to be saving some money aside for your small business. For those, you know, emergency cases, let's say you know, you have to take a month off for your business because something happened, whether personal or business wise, those operating expenses are still going to be due. So you want to make sure that you've got money set aside for that.
Jennie Wright
Trying to find the unmute button. But don't worry, I'll edit that out. That makes a lot of sense. And I actually love that you're talking about the profit side, when I first started doing this, nobody teaches you about this. And if they are, they're not doing it in a way that makes it feel like it's something I want to learn. Right, there's, I always call this the wet cardboard sort of stuff, right? Nobody wants to learn about the financial success of your you know how to build up the success of the business. That way, they're more focused on the other things, the marketing and all that kind of stuff. But nobody looks at the fact that if you don't have a strong foundation, that this is going to suffer. And this is something that my partner and my mentor, same person has helped me figure out and you know, build spreadsheets on and stuff like that, which is great. I do suck at the emergency fund. I'm going to work on that. I think that's a really, really great thing. actually want to ask you about the program that you've kind of like, slightly mentioned twice, but haven't really talked to us about. Can you tell us a little bit more about that?
Sylvia Inks
Yes, it's my master the money in your small business program. It's built for exactly all the things that we're talking about here. All the kind of mistakes or gotchas that small business owners have found in running their business, it's the things that you're not you had bitten learn, right, because it's kind of like the entrepreneur one on one, you know, some of the business skills as well as financial skills that you need to be setting up so that your business does have a strong foundation. So everything from you know, making sure that you budget for the right tools, that's going to help you save time and money in your business. Because in order to grow your business, you can't always DIY everything. So really like the bare minimum is here, the tools that you're going to need. And I do talk about the money mindset, as well as pricing in there. So it's really, you know, how do you make sure that you've created the right prices? And that all starts from the budget, right? So it's the walking through? How do you get comfortable? Okay, I understand you may not come from a background that was great, you know, handling money, but here's a simple way to you know, be able to find out how much your your business spends on a monthly basis. And then that way, that's the bare minimum that you need to be able to feel confident with your pricing. Because once you know that number, you're gonna have more confidence and know, okay, I can never dip below this number, or I can't give discounts because if I do a discount, it's an I'm not gonna have a profit margin after that. And then I also teach, I kind of go beyond and teach you how to think like a CFO, like how do you, when you look at those numbers? What does it mean? Because one of the biggest mistakes I see small business owners do is that they think hiring a CPA or a bookkeeper means that the CPM bookkeeper has their best interest and will tell them what to change when they look at their finances. And that's really not the case, right? Like your CPA is there to help you from a tax perspective, but they're never going to be like, Oh, you're spending too much on marketing? Or Oh, you know, it looks like your profit margins aren't that high, there might be something wrong with your pricing, like they're never going to go deep into that level. So it's teaching you how to think like a CFO, CFO, and how do you look at your p&l and say, Hey, here's some flags here, things that I should look into that, you know, some of the numbers look off, or it looks like I'm spending too much here and not enough in other categories.
Alyson Lex
I really love everything you've outlined because like Jenny said, they don't teach you this stuff. And they don't teach you how to balance your personal checkbook. If people have I still use a checkbook, but I'm weird. They don't teach you how to do any of that in school, and certainly not when it comes to your business as a self taught entrepreneur or things like that. And I really like what you said about choosing your prices based on your budget, instead of just making something up. And of course, we want those prices to feel good, but it does feel good when they're rooted in a reason. Because it also it's like okay, if my operating fences are x, and I'm charging x times two, then I need to make whatever algebra sales each month and it kind of gives you like a built in goal at the bare minimum and a way to grow. So I really like that system. And that program sounds awesome. I would love for you to share how our listeners can find out more about your program, how they can connect with you find out more about you and all that stuff.
Sylvia Inks
Yeah, absolutely. So the the site for that is SME financial coaching comm forward slash mastered the money.
Jennie Wright
We'll make sure that that's in our show notes for sure. No worries there. Absolutely. And just to piggyback on what Alyson said, Where else can people find you and locate you online?
Sylvia Inks
Yes, so you can go straight to my website at SME financial coaching comm that's the best place to look for me.
Jennie Wright
Awesome. That's fantastic. Sylvia, this has been such a great discussion. It's sort of tickled my brain like I'm actually eager to go and start playing in my spreadsheets right now. Right?
Alyson Lex
I want to go make more spreadsheets, I love spreadsheets, I don't own any excuse, no,
Jennie Wright
no, I'll say you're totally forbidden. There are no more spreadsheets allowed for you. She has a cap, she's already gone past the cap. It's bad. It's a thing. It's been so much fun, though talking to you, it makes it sound really, really more just able to grasp the concepts when you explain it the way that you have, which I think is incredibly important. And it makes it seem doable versus overwhelming. Right. And I think that's the best part. And I just want to take a second to say that, there's three things I want you to take from this podcast, if you're listening, and implying it all apply in your own business. Number one that Silvia told us to do was to do a little audit, go back three months, if needed into your bank statements or your credit card statements. And take a look at what you're spending, see what's coming out and what's coming in, do maybe ellipses, a little mini audit on the things that you've got going on in terms of the expenses, and making sure that you're taking a look at the gotcha items. Right, I had one of those happen last week, but I plan for it. And it's my accounting software for the business, they charge on a yearly basis. So I factor that in by month. So that's the first thing that I want you to go and do from this episode. The second thing is I want you to take a look at your own money mindset. And I want to see how you react to your own pricing. Do you know you need to raise your raise your prices, but you're just not feeling comfortable? And what work do you need to do internally to make sure that you can make the money that you need, but also do it in a way that feels good to you. One of the methods that I employed is that I would raise it by $50 increments. When I was signing on a new client. That felt okay to me. You know, eventually I was like, Okay, I'm okay with raising it $100 until I knew that I was hitting a threshold. And the threshold was sort of what the market could bear for what I was charging for the product at the time. And that felt Okay, I didn't feel okay with raising my prices to 356 $1,000. That felt too much and very disingenuous. So find what works for you. And then the third thing is get the resources that you need to make sure this works for you on the long term, it's not going to be beneficial. If you get off, you know, listening to this podcast, go make a spreadsheet, and you're only in it for two days. And then you never touch it again, create a system where you're actually making this a thing in your business to go back in and revisit your finances on a regular basis. And that's going to be the thing that's going to set you up for future success. And also, as a last thing, a little bonus, go check out Silvia inks at the links that we're providing in our show notes. And make sure you there checking out the things that she has on her website that might be beneficial for you and your business. This is an incredible episode. And if you haven't already, please do subscribe to the podcast. so you don't miss amazing episodes for great experts, just like Sylvia. And also think about leaving us a review so that we can make sure this This podcast is completely tailored for you in the future. Thank you so much, Sylvia. We really appreciate you taking the time to be on with us today.
Sylvia Inks
Thanks so much for having me. I enjoyed it.
Jennie Wright
Absolutely. And we'll be back again soon answering another big question.