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We've made a lot of progress as a society in many of the areas that we needed to in the last few hundred years. But one thing that has not changed enough is money. If we want to be able to tip the scales towards the favor of marginalized people, we need to understand the secrets to making money in small business.
The more we talk about money and the secret. That usually stay at the golf club, the more likely we are to be able to make money. My mission is to get more money into the hands of good people, specifically good business people like you. This is Money Secrets, the place to learn about the money secrets of successful small business owners.
Because I believe small business can change the world, and in order to do that, we need to be making lots of money. Let's go.
This podcast episode was recorded on the lands of the Wie people of the KO nation, and I'd like to acknowledge them as the traditional owners and [00:01:00] custodians of this land and water that I live. Work and play on. I'd like to pay respects to elders both past and present, and note that sovereignty has never been seeded.
This always was and always will be. Aboriginal and Torres Strait Islander land.
Hey there, listener. What I'm hearing is that a lot of small business owners are really having trouble bringing revenue into their business. Right now, this can be a really common thing that happens when people feel that the economy might not be in its best place.
We start getting a little bit more scared. We start being less strategic and more desperate to make revenue, and it becomes a bit of a self-fulfilling prophecy. Now I may end up regretting being so generous with what I am going to be sharing with you today. I know some of you have been really interested in what it's actually like to be inside Good Money Club.
So what I wanna share with you today is 20 minutes [00:02:00] of what it is like to be inside Good Money Club. Now, in Good Money Club, we meet every Monday morning and other times during the week and month too. But every Monday we meet for Good Money Mondays. We have four themes that we discuss. What I'm going to share with you today is part of a session that we ran called How to Make More Money.
So this is your chance to have a bird's eye view into the sort of things that we talk about in Good Money Club. I really hope that this episode is super helpful for you and that you're actually able to take some of this advice and start implementing it right away in your business. I am always trying to find ways to give advice that make it easy to apply to your business rather than thought bubbles that get stuck there for months.
So please enjoy your sneak peek into what it's like to spend 20 minutes inside good Money club, learning about how to make more money. Who would like to be making more money? I'd like to be making more [00:03:00] money. What I really wanna do today is try to help you to get clear about how exactly to make more money in your business.
So here's where we're gonna run through. How to make that happen in the easiest way that I know. These are the topics we're gonna cover. So revenue equals price times volume for those two levers. Is the financial decision that you make daily making money is about communicating the value of your product or service.
This is why copywriters are so important to small business owners and why getting clear about who your ideal client is is actually the foundation of making money. And I'll explain why. So over Complicators anonymous, which I'm guessing we probably all members of, we women like to over complic because.
Sometimes we over complicate things that are actually more simple. So the only way to. [00:04:00] To make more money through your business, or maybe you are not making money right now and you'd like to be making some, is to think about, am I going to increase the volume or am I going to increase the price? In other words, will I sell more or will I charge more?
There's no other way of making more money. You either sell more or you charge more. And when we can think about it as being that simple, it actually really helps our brain to feel like we've got a little bit more power to actually do something about making more money. So how to break your income down.
So when you wanna increase your income, you wanna think about these two levers, price and volume. If you haven't used the pricing calculator yet, I implore you to use it. The reason why we wanna do that is to work out how much you actually need to make in revenue to hit the goals that you have around paying yourself.
But let me break down how we earn income. As a freelancer [00:05:00] or service provider, we have a certain number of hours a year and we have an hourly rate. Now, we might not be charging by the hour. That's not what I'm trying to get at here. What I'm trying to get at is we only have a thousand hours a year if we are full-time in our business.
If you are not full-time in your business because you are parenting or caring or have other things happening, the amount of hours you have is even less. Now, why is it important to know that? Because we can't actually hit our revenue goals when we don't understand what our capacity is. So for example, if you wanted to get to a hundred K and you are a full-time freelancer, you need to be earning a hundred dollars per hour of client work.
To hit that goal. If you are working three days a week, you've only got 600 hours, and a lot of moms probably float between 600 and 800 hours of capacity, right? So we really wanna understand what is your capacity? Then you can [00:06:00] work out how much you need to be earning per hour every hour. So all of you will have some clients that you are charging less and some that you are charging more.
Eventually, we're going to either let go of those low paying ones and move to the higher paying ones or some other version of that, but we need our average hourly rate to be the amount that actually gets us to our goal. If you are packaging your products and services, you wanna have the right hourly rate.
Underpinning that same thing goes for an e-commerce business or a manufacturer or a product business. I know a lot of you work with product businesses. It might not be that you are one, and we've got a few hybrid business models who have products and services. Same thing goes, there's a little bit more work to it, but basically an e-commerce.
Business owner makes money by understanding what is my average order size or cart or whatever terminology you wanna use. How much do people spend each time they come to my shop? How many orders a [00:07:00] week am I able to process or do I want to process? And how many weeks of the year do I actually work for?
Right? So when you know what these numbers are, you can actually achieve them. But before we get there, so many people tell me. Fee. I'm charging $250 an hour, but I'm not getting to 250,000 revenue. The thing that is almost certainly happening is that you are over servicing and over delivering your clients.
So this is a really huge thing for women because we are people pleasers. We're high achievers. We wanna do great work. We're scared to charge what we really should. For the work that we are doing. So instead of charging what we should, we just do all of these extra hours to get it to the point where we're happy with it, but we're not actually being paid for that.
Right. So over servicing our clients is exactly the same as underpricing. I'm definitely guilty of this one still. And my God, in my early days, oof, I was the opposite of what I'm teaching [00:08:00] in Good Money Club. I was over servicing everyone and sometimes I was charging $40 an hour. Yes. 40. 15 years ago when we're not charging enough per hour or per project or per client, or we're over servicing, we just can't ever get to the financial goal that we have because it's just physically not possible.
Or as people are now saying the math is not math. You can't magically put more hours into your year, trust me. And if your approach to trying to make more money is to work for more hours, that is not a successful long-term strategy because you will burn out and you won't be doing good work. Right? So some things to consider.
Do you have defined deliverables and scope that's easy to follow for you and your client? Do you have some simple boundaries in. Place. Do you actually talk to your clients about what's included in your fee or do you just put it in a terms and conditions document and then never talk about it?
Especially when you [00:09:00] are delivering a big project, it's really cool to actually go through your terms and conditions in the first meeting and get yourselves on the same page, allow them to ask questions, et cetera. And actually, what often happens is. We want to deliver the Gold Star service, but we're too scared to charge for it.
So we just deliver Gold Star, but charge silver, right? So I'll get to the packages in a moment, but we really need to make sure that our clients are actually paying for the value that we're delivering. And sometimes we're delivering things that our clients actually don't want. That can be something else that we can actually waste a lot of time on.
So your price is the financial decision that you make daily. It's also the the one number in your business that makes the biggest difference to your finances. Nothing has the power to change your business more than changing your price because it is out there every day. It's on your website, it's in your discovery calls, [00:10:00] it's in your tenders.
You make a financial decision every time you present your price, and I don't think we think about this enough. I think this goes for all of us. Did anybody here start their business because they wanted to deliver a really average or mediocre service? No, that's not why we go into business. We go into business because we wanna do something better.
We see a gap in the market. We see something that we could do really well. We think that we could do things differently that's going to make things easier for somebody or improve someone's life or make an impact on the world. And to do all of these things, we need to price our products and services at a premium and then deliver that.
Are you a female or lgbtqia plus small business owner who wants to make more money, but you also want to do that while changing the world. Good Money Club is the place for you. It is a six month program experience and [00:11:00] membership where you will get everything you need to build your bank account, grow your business, and increase your impact.
We have no more than 40 members, so you get lots of really tailored and focused. And the doors are open right now, so head to my website, peach bm.com au to find out all about Good Money Club. And if you are a good egg, a business owner who really wants to do great things for the world and make money and pay yourself more, good Money Club is for you.
Can't wait to meet you in there. Your price is a huge part of the perception of quality and there is a whole science behind. How prices are presented, even the position on the screen that you place, your price makes a difference. So when we put a price against our product and service, we are telling people that that is the quality we are delivering.
If you are [00:12:00] pricing below the value of your product or service, a really great client is going to come and see your prices and make an assumption that you must be poor quality. And this happens all the time, like who's been to a website looking for like a gorgeous dress, and they get there and the dresses are like $59.
Or whatever price it is for you. Um, plus size dresses are really fucking expensive. I don't really know how much dresses cost for you guys, but if I saw a dress for $59, my first thought is this was made in China in an unethical factory, and it is not gonna last more than a few washer. It's not gonna breathe right, so that's gonna stop me buying that dress.
There might be another consumer who's totally into a $59 dress and maybe $59 dresses in your size are really good quality. It's just an example of like, sometimes when the price is too low, we decide not to buy it because there's no way it could be high [00:13:00] enough quality. So we don't wanna turn away our best potential clients by having a price that's too low.
And how do we increase our prices through branding, marketing, and communication, right? So I'm not a marketing expert, except through my own experience. I'm a business strategy expert, but marketing and business strategy are like. Sisters, you can't just put a price on something and expect that people are going to pay it without doing the work to actually make your brand marketing and comms match the quality that you are trying to put forward.
I wish that it was as simple as putting a number on a website, but it really isn't. We need to actually do the work to actually understand. How to present that. But the most important thing is that when you have the right client looking at that page on your website, it's always gonna be a yes, gives a couple of suggestions about literally how to present your offers.
We wanna give people [00:14:00] choice, but not too much. So in some instances I recommend just giving one option, but that would be a very particular client that you have a really strong knowledge of exactly what their business is and what they need, or you know, that they don't have the capacity to decide between options.
But for most businesses, what we wanna do is present three options every time, if possible. So making money is about communicating the value of your product or service. So how do we do that? We need to speak, all right? Using the words that our clients use to describe their problems. We wanna use our clients' language to paint their desires or goals coming true, but also, you actually need to be crystal clear about what makes your product or service valuable.
If you don't know the answer to this, you need to start digging into. What is it that makes my product or service valuable to my clients? [00:15:00] These are the kind of things that you might expect to see in a list of what makes something valuable. It's fast, it requires little time from the buyer, or it creates fast action, or maybe it's deep or well researched, or it goes below the surface and that needs deep expertise.
It might be that your product or service helps somebody to see themselves in a new way or brand themselves in a new way. It might be that it's high quality, it speaks of luxury, it's handmade, it's Australian, made it's natural fiber, et cetera, et cetera. It might be that it's cheap and cheerful, a quick win, a time saver or a quick solution to somebody's problem.
It might be that you help people to feel seen and understood, or that you help them to understand themselves. It might be that it's fun or creative or colorful or helpful, or it puts a smile on someone's face, right? There are lots of different ways that our products and services can be valuable, but it all starts with understanding [00:16:00] the needs, the desires, and the problems that your clients are having.
This is. A little bit of a complex idea, so I'm not gonna spend too much time on it 'cause I don't wanna overwhelm you. But product market fit is when our product and all of its inclusions actually matches the price that our clients are expecting to pay. And often with you ladies, I actually feel like we are over servicing and over-delivering and our clients are getting all of this extra from us.
We're getting frustrated, but it's because we haven't done the work to work out either how to decrease the inclusions or increase the price and product market fit is when the price and the value match perfectly. You might need a bit of time to think about that one. So do you know who your ideal client is when you know who your ideal client is?
And exactly what they value. You can charge premium prices, [00:17:00] and the best way to think about this is to think about who is the person or business who benefits the most from your product or service, because they're the one that's gonna pay you the most, right? So many of us are wasting so much of our energy trying to sell our high quality products and services to non-ideal clients.
This can be frustrating, exhausting, and ineffective, and it can make you think that your prices are too high, but it's so much more likely that you are talking to the wrong client, and that is on you if you have non-ideal clients coming to your inbox. You are the one who brought them there. So you need to go back and look at how did this person get here?
What was it on my website, in my marketing, or on my socials that they saw that led them to believe that they were the right client for me? So who or what is the client that values what you do the most? What are their [00:18:00] characteristics or demographics? How would you describe them? Where are they hanging out?
Online and in real life? And by the way, this might not be the client you love working with the most. You'll be really lucky if this is an alignment of, this is my favorite type of client to work with, and this is the client that will pay the most for what I do, but it's not always the case. So sometimes we need to prioritize working with the client that will pay us the most because our time is limited rather than working with the client we love the most.
Here's a little example I wanna give to you about when you have the right and the wrong ideal client standing in front of you. So if you sell mangoes. You are standing at a little fruit stall and somebody comes up to you and says, look, I'm really looking for apples today. And you say to them, oh, mangoes are so much better than apples.
These are all the [00:19:00] reasons why you should buy a mango. They're amazing. They're juicy. They're only available at certain times, blah, blah, blah, blah, blah. And of course, they cost more than apples because X, Y, and Z, all you are doing is pissing that person off and wasting your time. The better thing to do would say, Hey, I hear that you are looking for an apple.
There's actually an apple vendor, a couple of doors down, and they have amazing apples. Once that person moves out of your way, you will then be able to serve somebody who comes to your store saying, I've been looking for mangoes all day, and the only thing you need to say is how many trays of mangoes would you like?
Right? But we waste so much of our time and energy. We get so upset about people looking for apples when it was actually our marketing that brought the Apple person to us. So think about this in examples in your business where you've had the wrong person in front of you and you thought that that [00:20:00] meant your prices were wrong.
But I can almost guarantee you it's not your prices, it's the client, the wrong client. The best way to test your price is to ask the opinion of your ideal client. I don't give a shit what anybody else thinks about your pricing except what I think about it because I'm a pricing expert, right? I don't care what Uncle John or your neighbor Betty, or your best friend who doesn't work in your space, I don't care what any of those people think.
All I care about is the opinion of your ideal client and the best way to actually test their. Interest in your is to ask for their credit card. Asking somebody if they like something doesn't mean shit. Setting your prices and making money is about understanding how your price impacts your revenue with the two levers, getting product market fit, which is about setting the perception by matching the price to the value and then communicating that well.
And it's about understanding the client who [00:21:00] benefits the most from your product or service because. They're gonna pay the highest price for it. Final thought. It is not your job to be affordable. Small businesses cannot be affordable. So if you are using the word affordable in your brain, in your messaging on your website, please do your best to remove that from your vocabulary.
Multinationals and big, huge companies like Amazon are set up with scale and size to be able to be affordable. But small businesses have start, like we start our business because we wanna be personalized, customized, we wanna build relationships, we wanna solve tricky problems, we wanna improve people's lives.
So it is your job to be valuable and that is very different from affordable. I've got an extra little tip for you. Please don't stop marketing yourself when [00:22:00] things feel like they're a bit slow or a bit hard. What I see so many small business owners doing when they think that things are slow, or maybe they think the economy isn't going as well as they want it to.
Is they stop marketing themselves and it totally makes sense. We start to drop our confidence. We start to get a little bit shaky. We start to believe the things that we see in the media and on social media, which are designed to send us into doom spirals, by the way. So if you are finding that things are slow, the only way to build revenue in your business is to market yourself.
So please do not stop marketing yourself. Find the ways that are the easiest for you, whether that's marketing yourself on Instagram, working on your s. CO blogging, getting onto other people's podcasts, working on your email marketing, or even picking up the phone or sending emails to previous clients who have worked with you.
People will only be able to give you money if you ask them to. So [00:23:00] please do not stop marketing yourself when things are feeling slow. I really hope that's great advice for you too.
Thank you so much for listening right up to the end. I hope you enjoyed this episode of Money Secrets, where we talk about the money secrets of successful small business owners.
If you enjoyed the episode, I'd love it if you subscribe to the podcast, but leave us a review or share this episode with one of your friends. I hope you learned something. I hope you got a new perspective and I really hope you enjoyed the listening experience.
