Just because you’re great at what you do, doesn’t mean you’re automatically great at building a profitable, successful business around what you do.
It’s OK not to know how to run a successful business, and it’s OK to ask for help.
In fact, that’s exactly what I did when I met a local builder who was struggling to get control of his finances… After helping him, and answering his questions I realised some of the tips can be applied to most industries.
Here are the best ones:
1. Charge for everything. At the start of a project, share your pricing for all the possible extras that are not included in the initial project scope.
2. Think pricing. Aim to make 20-30% profit per project so take all expenses into consideration when pricing for the project.
3. Get a deposit. Ensure you have 50% of the project cost from the client upfront before starting any work.
4. Have a specialism. Don’t be a generalist or you’ll never get to grips with profitability.
5. Use accounting software. The best accounting software all talks to each other so you can stay on top of profit and see it at a glance.
6. Think long-term. Identify what you need to earn personally then put a financial plan in place for your business to give you that.
One last thing to remember is to always protect your profits:
Imagine you’re doing a £50k project and you want to make 20% profit. The client asks for a £2.5k discount, then uncontrolled costs eat away another £2.5k, suddenly you have HALVED YOUR PROFITS.
You need to do TWICE AS MANY PROJECTS to make the SAME MONEY.
Protect your profits like your life depends on it, because it does (or certainly your livelihood does).
Don’t worry, you’re not meant to just know this stuff.
Reach out and ask for advice.
Don’t know where to start?