[00:00:00]Fi Johnston
I feel like I'm working all the time, but somehow I'm not making as much money as I want to. I've always got a full client load, and in fact, I don't even feel like I'm able to hit the deadlines that I have. I'm not as present with my family, my children, my partner, my friends, my parents as I want to be. I'm always working, but I'm not actually making as much money as I would like to be. So how can I ever get out of this situation? Somehow there just never seems to be enough money.
Money Secrets Intro
Are you a small business owner who'd love to be making more money while making positive change in the world? You're in the right place, friend. Hi, I'm Fi Johnston, a chartered accountant and money coach obsessed with small business. In The Money Secrets Podcast, I share strategies that you can use to make more money without working harder. You'll hear successful small business owners share what they've learned about money and business, and I'll help you to think differently and shift your [00:01:00] perspectives about money so you can grow your business and your impact. My mission is to get more money into the hands of good business owners, like you.
Acknowledgement of Country
This podcast episode was recorded on the lands of the Wurundjeri people of the Kulin Nation, and I'd like to acknowledge them as the traditional owners and 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 ceded. This always was, and always will be Aboriginal and Torres Strait Islander land.
Fi
Working harder will not make you more money. In this week's Money Secrets podcast episode, I wanna unpack this idea that I hear coming from the mouths of so many small business owners, which is if I wanna make more money, I need to work even harder than I already am. So these are the kind of things that I [00:02:00] hear people saying or writing.
"I feel like I'm working all the time, but somehow I'm not making as much money as I want to. I've always got a full client load, and in fact, I don't even feel like I'm able to hit the deadlines that I have. I feel like I'm working all the time. It's starting to interrupt my social life. I feel like I'm not as present with my family, my children, my partner, my friends, my parents as I want to be.
I'm always working, but I'm not actually making as much money as I would like to be. So how can I ever get out of this situation? I'm always doing client work or I'm always trying to get products out the door and somehow there just never seems to be enough money to pay me a decent wage. I never have time to do my own marketing either.
I don't even understand how other business owners find the time to do their marketing." So this is a little clue. So if it's not true that working harder is how to [00:03:00] make more money, how do we make more money? So there's actually a couple of really key things that we need to do if we want to make more money.
The first thing we need to do is understand what our capacity is. So how many hours a week or month or year can we spend working on client work without going round the bend? So how much capacity do we have in our week to actually do client work? Or how much capacity do we have in the week to be making products or getting products out the door or whatever it is that your business sells?
What I find is that most people grossly overestimate the amount of capacity they have to work. So let's say for example that you have 40 hours a week of work. That doesn't mean that you can do 40 hours a week of billable, productive, money-earning- Work. If you're a service provider, I think it's a great estimation to say that about half of our work time is actually [00:04:00] billable.
So if you have 40 hours in a week, you can probably sustainably expect to be able to earn for 20 hours of the week. If you're a product business or a maker, it's probably around the same because there is so much work that we need to do that is not, uh, something we're being paid for. We need to answer emails, we need to work on our business, we need to do our bookkeeping, we need to meet with our business coach.
All of the things that we do that aren't directly generating revenue, we actually need to account for that when we're trying to think about how to make money. So once we've uncovered or made an estimate of what our capacity is, now we can start to see perhaps the reason why you haven't been hitting this target that you wanna hit is because you're actually trying to do too much work.
And we really need downtime, we need rest time, we need free space in our calendar if we wanna be doing a great job for our clients and with making our [00:05:00] products and services. So once you've understood that actually you're probably trying to put too much client work into your week, and that is just not sustainable over the long term, it makes you start to think differently about how much you need to charge.
Because if you can only charge for roughly half the time that you're working, it kinda means that you have to charge double what you think you do. So that leads me to the key to making more money, and that is your price. So nothing affects your financial wellbeing as a business owner more than your price.
So you will hear me talking a lot about price on The Money Secrets Podcast, and it's all well and good for me to say, "Look, you need to increase your price if you wanna be able to make money." But how do we do that? And there's actually a couple of really key skills that we need to work on in order to be able to increase our prices.
So if you want to increase your price, you need to increase the quality of your [00:06:00] brand, your marketing, and your communication. What are the sort of things we're looking for? We want you to be able to articulate really well what is valuable or different or differentiated about your product or service compared to others, and why do people find that valuable?
So How do you improve the lives or businesses of your clients? And who are your clients? Who is the client, the customer, the audience, the group of people, the business? What is your ideal client? Who is or what is the client that values what you do the absolute most? When you can articulate why they should choose you, so what your differentiator is, then you can start to actually attract the ideal client into your inbox.
So that one of the reasons why we are working too hard and not earning enough money is because we're not working with ideal clients, and we have to do more work than [00:07:00] we think we do in order to be able to reach the revenue goals that we wanna be hitting for ourselves. So rather than working harder or working more, what we need to do is change the sort of work that we are doing.
We need to be able to carve out time to be able to really work on our marketing, our message, and our branding. Now you don't have to get it perfect. If you go and have a look at my Instagram feed, you will not see a perfectly curated Instagram grid. If you go and look at my website, you will not see a perfectly curated website.
Everything is a work in progress every day.
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What Really made a difference to my business was when I started prioritizing my marketing. So it does seem very difficult when you're in the trenches of working so hard for your clients or in your making or in your product business. How the hell am I actually gonna find time to work on my marketing? And in fact, the answer is actually quite simple. You need to put your price up. When you put your price up, you will be able to work with less clients or less hours in the week in order to hit your goals.
Now, yes, when you start to put your prices up, you will find that the clients you are used to working may not be [00:09:00] prepared to pay the price that you are asking, and that is where your marketing, your brand, and your comms come in. What we need to do with our marketing is attract a higher quality client.
Once we start attracting a higher quality client who actually values what we do more than our other clients, we can easily start charging them more than we have in the past. And as you get better at what you do, you can charge even more for what you do. By the way, you are allowed to put your price up any day of the year and as often as you want to, but it's your client's decision whether to say yes or no to working with you.
And the way to get clients to say yes to your prices is to communicate the value that you have on offer, to explain, "Why should you buy from me? What are you likely to experience? What is going to happen? What will be the outcome on the other side of working with me or buying this product from me?" [00:10:00] We need to get really good at using the words that our customers relate to.
So many clever business owners are using words that our customers just don't understand, and we call it the curse of knowledge because you know so much about your chosen field, but your clients don't, and that is why they're coming to you to get you as the expert working for them. So if you have this idea running around your head that you're already working really hard, and if you wanna make more money you're gonna have to work even harder, I want you to stop and really think about it.
What is my capacity? How many hours a week or how many clients can I actually work with each week, each month, each year? If I'm a product-based business, how many orders can I reasonably get out the door, especially if you're making the product yourself? When you understand your capacity, then you can start to work out, well, what do I need to be charging for this [00:11:00] limited capacity that I have?
What sort of hourly or project or per order amounts do I need to be bringing into my business? And the more time that you carve out in your schedule because you are increasing your prices... So what I mean by that is a lot of people are scared to put their prices up because they m- Might lose customers, but that's the point.
We are trying to lose customers. Because if you put your price up, you can work with less people and earn the same amount, right? So the goal when we put our price up isn't to keep every single one of our clients. The goal is to lose some clients, work with less clients so that we are able to earn the same amount of money in less time.
But how do we do that? We do that through branding, marketing, messaging, and getting really clear about exactly who our ideal client is by increasing our prices as often as we are [00:12:00] able to, and just continuing to communicate that value. What I see is women especially who've been in business a really long time who've never increased their hourly rate.
Now, you get better at your work every single week. I am so much better at my work now than I was 25 years ago when I graduated uni, and if I were still charging the same hourly rate as I was able to earn then, that would be an absolute travesty. So I'm really thinking often. I am improving the work that I do.
Right now I feel like I'm doing the best work of my life, and I hope that I get to feel like that the rest of my career, that I'm always growing and learning and adapting and just getting better and more valuable to my clients. That is what we need to be aiming for as small businesses. So let's stop this idea that working hard is how we are going to be making more money, and let's instead take a few steps back, [00:13:00] work out how much capacity you have, what hourly project or average order size you need to earn to hit your goal, and then we work out how to actually increase the quality of our marketing so that we are bringing in clients that absolutely love what we do.
That is how to make more money. I hope that was useful for you, and I'll see you next week.
Money Secrets outro
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, could 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
