One of the hardest things about owning a business is making the heart-wrenching decision to invest money into your business. You probably started your business on a shoestring and are counting the dollars that come in. It is hard to see them going out!

My story is that I have a money anxiety thermometer and there is a certain level of cash I need to see in my account for me to have a feeling of safety. This is an emotional thing really, because that level has changed over the years.  When I began it  was $500 and then $1000 and then $3000.

Looking back I can see it is a good barometer of how my business has grown. However, recently I made the decision to re-build my website, re-do my branding, hire someone to help me, re-print my books and more. This is all good stuff and in theory will help my business in the long run. The problem is in watching the money level go down, down, down and my anxiety go up, up, up.

Money management has never been my favorite thing but seeing the affect the stress has had on my health has forced me to confront this issue.

The only solution is to be able to predict my return on investment. This is a question my new clients ask me all the time so I get it. They want to know that by shelling out money to  hire me, their business will improve. They need to see the benefits in dollars and cents. Regardless of what you invest in, you need to be able to perceive the benefits.

Just spending the money and having my work done, is not enough to show the return. I already have a lot of people visiting my website, however I want to see that the new site will engage people more, offer even more value and build relationships. All those things will bring in more money as long as my programs are high quality and I give what I say I will give. So, there is a lot more to it.

My Whole Business Circle in my book and the questions accompanying were created for myself, as was everything in the book. It provides a way to evaluate each part of your businesses strength and shows where you need help.

Your business is a wholistic creature and the parts are not really separate. They affect each other and overlap. Money is related to marketing which is related to your products and services which is related to your systems and follow-through.

So, in order to accurately predict your return on investment you need to outline a whole plan. In my case, I need to use the new website as an opportunity to up my marketing, present some new tools and products and re-do my whole business vision.  When I do all those things, I will ensure the roi and I will see that money level go up to a new comfort level.   I guess my goal is to eliminate any anxiety forever!

ps. New website will be live in about 10 days!

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Like most small business owners who are selling a valuable service, I have gone through the painful process of  thinking if my prices were too high people wouldn’t buy from me and I would starve.

Based on that fear, I charged too little at first. Too high was a subjective emotional thing and not based on anything to do with a business plan! I have learned so much the hard way, and hope I can help you to avoid the same mistakes.

It’s funny because my very first business 35 years ago, was making and selling hand-made pottery. I had no problem figuring out the correct price based on costs involved and how much I needed to have as a profit. It was easy. If people liked my work they would want it. If the large pieces were beyond their budget they bought a smaller one. I had a variety of choices and my work sold itself.

I have written before about the difference between selling a product and a service. So many more fears and self-doubts come up when you are selling your own service. That fear is immobilizing and can propel you to charge way less than you need to have a sustainable business.

The irony is that you will starve then for sure, because the only way to bring money into your business is by having prices based on value and your business plan. It needs to be the same process whether it is a pottery mug or a coaching program. If you are offering a service like acupuncture, massage or health services you will relate. If your service is designing websites or gardens you will also relate.

A business plan for a small service based business is not that difficult. It’s simply asking yourself what bottom line you want, where it will come from and how many  programs or sessions you need to sell each month to make your goal. But that process, in itself can be challenging.

When I ask my new clients that question, they usually don’t know. They are too busy just trying to get by and, “make more money.” It is scary for people to even put a figure to what they want to gross per year. I tell people to just guess. Inevitably it is too low of a figure and a reflection of their fear and self-doubt.

People have all kinds of mis-led reasons they give for under-charging. Here are a few I hear regularly.

•  I have only been in practice a short time.
•  People can’t pay any more than this.
•  I’d rather get paid something than nothing.
•  I don’t want people to see me as being expensive.
•  I am uncomfortable charging more until I am more experienced.

No one actually cares how long you have been in practice. They only care about their problem and the help they need. If you focus on your short time in practice then it sounds like you are saying you aren’t that good yet. If you aren’t that good, why would someone want to pay you any amount of money for help. People who need help are shopping for value.

Some people do make decisions on price and it usually backfires. I did that when I had my first website built. I shopped around and assumed that the person who was giving me a good deal would be as skilled as the guy who was charging a higher price. I learned the hard way that you get what you pay for. Now I only go for quality. I am still conscious of my own pocket book but I will always hire the person who is offering me the highest value.

I encourage you to:

• Give more value to your clients.
• Determine your prices based on your business needs.
• Pay yourself first.
• Acknowledge your expertise.
• Focus on growing your confidence.

Read some of my related blog posts:  Be willing to receive large amounts of money. Running a business is all about giving and receiving!
5 Keys to Correct Pricing.

Please share your thoughts on this topic. I would love to hear from you.

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I first heard this phrase, “Pay yourself first”, about twelve years ago when I had a part time business and often felt like I was just scraping by.

I had a separate bank account for my business, however I really didn’t understand how to manage it. I never really paid myself, I just earned money and spent it. Sound familiar?

At that time just about all my earnings got transferred to my personal account and I put every little money into my business. Many solo-business owners operate this way, by juggling money because of inconsistent income.

A year or two later I moved back to USA and decided to turn my business into a full time venture. This meant building a website, paying for hosting, printing and countless other expenses. It was a big shift!

I had lots of money going out and I began to pay myself in little bits and pieces just to keep my personal account above water.

It went on like this for quite awhile. I worried about not having enough, not bringing in enough income and was anxious if my bank account dropped below a certain point.

Then I again heard this phrase, “Pay yourself first.”  I didn’t know how to do this but I delved in and began to learn more about money management and how to run a business. Now I understand  what this means and the reasons to do it.

•  It is always good business practice to pay your employees first and foremost, so why would you treat yourself with less respect?

•  It is impossible to budget and plan your personal life if you don’t have a pay day and an amount you can count on.

•  If you don’t pay yourself first, you are nurturing an attitude of lack instead of abundance.

What you need to do:

1. Come up with a figure of what you absolutely need to pay yourself to sustain yourself and to feel good!
2. Divide it into two payment amounts. 
3. Schedule your paydays and write it on your calendar.
4. On that date write yourself a check or transfer the funds online.
5. Give gratitude for your business and your abundance.

If you want to add one more positive bit, decide on your next pay increase and plan and schedule it ahead.  Watch your income increase to meet that intention. It is like magic.

Most of us who began solo have learned how to  cut dollar corners by doing virtually everything ourselves!  It is really a crazy idea but in fact almost all self-employed solo-biz owners begin this way.

The focus is on cash flow and the idea of hiring someone to do anything translates to money going out.

I coach my clients to set prices for their services that allow them to get paid what they need in order to run their business and make a profit.

I see way too many service based new entrepreneurs under-charging and falling into the trap of wanting to help everyone.  But, I am getting side-tracked here. The point is, I can never complain about anyone’s prices. If anything I know people are under-charging not over-charging.

There comes a point though, where you must bring in a team of people to help you run your business because it will become impossible to do it yourself and still grow your company larger. You need to pay people for the help they give you.

I am just in that place now and I am excited about the changes happening and the amazing people who are helping me. I feel  blessed by  my team. They are all people who have been my clients so what comes around goes around. I love hiring my clients. But I am still putting out a couple thousand dollars for  my new website and design and the help to get it all happening!

In order to do this I needed to see your return on my  investment. How do you know if money you spend will bring you more money in the long run? You have to map it out and  ask, “If I do this, what will be the expected outcome?”  Trust your instincts as an entrepreneur and get valued opinions. I did wait until it was the right time.

The biggest mistake I see people make is to wait too long and cut too many corners, not invest in their business and and end up staying small and struggling.  Here are possible issues have that I have seen:

• Your prices are too low and you are under-valuing yourself.
• You feel self-doubt and are making decisions from that place.
• Your marketing is poor and there is no plan to follow.
• You are lacking a  vision for your fully developed business.
• You are trying to to sell something that has no driving need.

There are other reasons and maybe some of you can share.  I’d love to hear from you. Really the term solo-business doesn’t truly mean  ”solo.”

I talk to lots of entrepreneurs who say they don’t like selling and they won’t acknowledge this important aspect of their business. They figure that people will just gladly offer them money and they won’t have to ask for it.

Most of these people are also struggling to make ends meet because regardless of what kind of business you have, selling is always a part of the process and although it would be fun, people are very unlikely to chase after you to give you money for your services.

Most people are careful about what they spend money on. People who are generally spender types, will buy spontaneously and on a whim, but that is usually “toys,” or material things, not services that are higher priced and involve a relationship.

If you are offering a service, like coaching, healing arts, web design, graphics or another way of helping people, your potential clients will not be in any hurry to hire you. They want to be crystal clear sure and know they are making the right decision.

Example:

Last week I signed up for an eight week seminar. It is a series of classes that will hopefully give me tools to be more in control of my money; a very worthwhile focus. However, I was unsure about the return on my investment. It will be a big time commitment and although the $350 was not a lot, I have to be mindful of where I spend. I was cautious. Very normal!

In order to keep the cash flow happening in your business, you need to understand the psyche of your target client. In my case, even though I was interested, I was also very wary and almost didn’t register.  What helped me decide was that the tutor spent time talking with me about the benefits and she helped me make the decision. She invited me to join.

Here are three important and essential parts to successful selling your service.

1. Connection. Connect with your potential clients.  Listen to them, who they are, what they want, why they are interested. Paraphrase back what you heard. Make sure you understand their situation and give empathy. Empathy goes a long, long way.  People want to be understood. If you don’t demonstrate that you get where they coming from, you will never make the sale. People need to feel that connection first and foremost. The key is to learn to listen and provide empathy before anything else.

2. Confidence.  You as an entrepreneur need to be super confident about your specialty and your ability to provide the benefits your client wants. People want to work with experts and specialists who are secure in their ability, trained and skilled as this emulates a sense of trust that you will be able to provide what they need.

If you are operating from self-doubt, your potential client will feel it instantly and back away. They have enough of their own self-doubt and what they want is someone who  is self-assured. If this is your challenge, ask yourself what you need in  order to feel confident and then make doing that a priority.

3. Converting. Helping your potential client to make the decision and actually sign-up for your program, schedule a session or hire you for their job is a huge part of the sales process and where many people slip up.

There are two reasons why entrepreneurs drop off at this point.
One, you are uncomfortable about asking for money. This might have to do with your own self-worth or unresolved money  issues.

Two, you are worried about being pushy. You don’t want to be like that archetypal used car salesman and have people not like you. As a result, you  disappear and cannot help your client to make a decision at this important time.  In both of these cases, you are focusing on yourself and your inner blocks.

It is impossible to be dealing with your own stuff and also being there for someone else. Ultimately you need to determine which of these two issues are getting in your way and then come to a place of resolution so you can be there one hundred percent for your client and not be focusing on your fears.

If you follow my seven part marketing circle, selling is in pie piece number six.  What happens before that makes the selling part easy once you have resolved your own blocks. People will be ready to hire you if you follow the steps in this circle. These three points will help you to stay focused and on track.

Which of these points are the easiest for you and where do you feel you drop off?  I would love to hear your comments.