5 ways to increase your pay when you work for yourself

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1. Increase your customers

Here are some questions to consider…

  • Do you need more customers?
  • How can you get them?
  • Does everyone know what products and services you offer? When I say everyone, I mean all your friends and family and your business network. Do you tell people what you do?
  • Is it clear what you have on offer on your website, social media pages, in your newsletters?
  • Do you have a business network where you find people to work with? Are you part of any business communities or membership groups? Are you active in them?
  • Are you visible on social media?
  • Do you have a regular newsletter and a mailing list?

If you need more customers, are you doing all the things above to find them?

There are lots of people who can help you with all of the above, coaches, marketing experts, business advisors.

Clear Day and Your Happy Customer are two fantastic small businesses who I work with to help with all of the above. You can find out more about them here

www.clear-day.co.uk

www.yourhappycustomer.co.uk

If you are already fully booked then bypass this one… you don’t need more customers, you need to do one of the other things on this list.

2. Increase your prices

I always advise price increases as a good option if you feel like you are working hard (too much?) and not achieving your income goals.

Prices are based on value and demand.

  • Are you more experienced than your prices suggest?
  • Are some of the people you are working with not your dream clients?
  • Is there more demand for your services than you can cope with?
  • Has it been over a year since you last put your prices up?
  • Do you have feelings of resentment towards the work you are doing?

If the answer to any of these questions is yes, think about putting your prices up. Lucy Green has a great pricing calculator on her website, give it a go.

Most people feel icky about raising their prices. Here’s a few things to help with that…

If you were employed and didn’t get a payrise year after year, how would you feel? Being self-employed you have the freedom to give yourself a payrise. Don’t be that mean boss to yourself.

Don’t assume your clients can’t afford the increase. You putting your prices up will encourage them to do the same. If they don’t want to pay your worth, they are not your ideal client. And there are an abundance of potential customers out there, they just need to know about you!

Whenever I’ve put my prices up, my clients have accepted and even responded with a testimonial!

If you charge more you can work less, have less clients and provide a better service. Everyone is happy!

Charging your worth is essential to creating that much sought after work life balance.

3. Manage your business expenses

A. Cut back if you are overspending.

As a general rule your operating expenses should be 30% (or less) of your gross profit.

Gross profit = sales – cost of sales.

Cost of sales are the costs that your absolutely need to make the sales… so if you are a greengrocer, the cost of your fruit and veg is your cost of sales. If you run a marketing agency, the cost of your subcontractors is your cost of sales.

Operating expenses are everything else… consultancy costs, subscriptions, office costs, mobile phone, bookkeeper and accountancy fees etc.

To work out what your current operating expenses are you need to get your profit and loss report and divide operating expenses by gross profit to see what % you are currently looking at. When you know this you can work on getting it down to 30%.

Print off a list of all of your expenses (you can do this from your bank statements but the best place is from your accounting software as it should all be clearly categorised and you can see what you are spending and where more clearly). Which of these expenses do you really need to run your business in the way you want to? Do you even know what all of your expenses are? Or do you have some historic subscriptions that you don’t even use anymore? Have you signed up to pay for something without realising (those sneaky free trials when they take your bank details!)?

B. Outsource to create time and save money.

For some business owners, your operating expenses will be way less than 30%. You may think this is great, you are running a lean business model and it is great if you are happy with your current income. However if you want to grow, it’s probably time to outsource… to let go of control and trust others to come into your business.

From experience, every time I’ve done this I’ve been pleasantly surprised… as a self-confessed control freak I needed coaching to help me with this… Rebecca Levene was my coach on the Enterprising You program.

https://enterprising-you.co.uk/about-enterprisingyou/?https://enterprising-you.co.uk/about-enterprisingyou

Rebecca gently encouraged me to take on some bookkeeping help so that I could free up my time to grow the business. I now have a team of 10 women – mostly freelancers – helping me with admin, marketing and bookkeeping and my business is thriving and I honestly couldn’t do it without them. Yes my expenses have increased, of course! But my sales have doubled in 12 months and as long as you are tracking expenses against gross profit and ensuring that % stays under 30%, you will be fine too…. which brings us nicely on to the next point.

4. Get your cash management under control

I use the Profit First cash management system.

Moving %s of my income every Friday from my main business account into my Starling spaces and Mettle pots.

My pre VAT registration %s:

5% profit bonus.

50% wages for you.

30% operating expenses.

15% save for tax.

My post VAT registration %s:

5% profit bonus

40% wages for you

25% operating expenses

30% save for tax

To read more about Profit First, see the blog I wrote recently for Clear Day… https://www.clear-day.co.uk/blog/profit-first-next-level-cash-management/

If you are a client of mine or a member of the Organised Entrepeneurs Club, ask me about this system and I’ll be happy to discuss it more more how it can specifically work for you and your business.

5. Pay less tax

Notice this is last on my list here and I think it should be the last thing to think about once 1 to 4 have been considered. As an accountant I’ll advise and help you to ensure you are claiming all the expenses and reliefs that are available to you but my focus for your business isn’t on getting your tax bill down, it’s more about getting you more clients, encouraging you to know and charge your worth, curb the spending (or spend more to save more, encouraging the right outsourcing) AND to save for tax in advance – switch your mindset to “this isn’t my money, I’m holding it for the government until it’s due to be paid over”.

If you need help with any of the above, get in touch with me by email info@carolineboardmanconsulting.co.uk. I have client intakes in Spring and Autumn each year or you can book a one off 1:1 consultation via my website www.carolineboardmanconsulting.co.uk/book-an-appointment

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