Have you ever struggled with what to pay yourself?
This has been a constant battle for me since I started my business. I had heard all of the stories that most businesses weren't profitable in their first few months or even for a couple of years. So I didn't mind not taking a salary because I felt the tax benefits were LIKE getting paid and I invested every dollar I made into building my company.
HOWEVER, I recently began taking a harder look at what it would take for me to quit teaching and work for myself full-time. There's a lot of early mornings, late nights, and low energy days when it comes to my family and I want to fix that ASAP.
Here's a couple of problems with this approach that I wished I had fixed sooner:
1. My pay should have been included in my expenses. Period.
2. My pricing should include my pay. Period.
There are a couple of books that address this, and one that I recommend is Profit First. But because I sell a variety of items at a variety of price points, it was...
I'm a teacher first, not a business person. I'm also more into language arts than math but even I could tell something was wrong with my bank account.
My sales continued to double. My revenues were up like crazy on every platform I sell - but my bank account remained the same. It's like the money was dissolving into the digital universe!
What I realized felt like a punch in the gut: I was not profitable. Every sale that came in barely covered the expense to make the item and ship it. I had been working essentially for free since, well - the beginning of my business.
To put it even more bluntly, at my current prices, I could sell ZERO wooden cutouts in 2020 and possible show a greater profit at the end of the year. OUCH!!!
Just thinking about it makes me cringe. It was a finally a no-brainer to raise my prices.
So, because i love sharing my failures and my successes with you, I want to share the TWO revelations I've had when it comes to raising prices.
The first sign:
You get so busy...
Well, the amount of information from influencers, coaches, and podasters is certainly abundant on the internet these days, #amiright ... and that "abundance mindset" is creating some sticky scenarios.
In 2018 I decided to start listening to Rachel Hollis' podcast, back when it was called "Dais" or something like that. Through her podcast I discovered Jasmine Star and Social Curator (a life changing discovery, to be honest), Amy Porterfield and her podcast (Online Marketing Made Easy), Jenna Kutcher and her podcast (Goaldigger), and so many more....
Amy led me to Stu McLarin, Jasmine led me to James Wedmore, someone led me to one of my all-time favorites, Cathy Heller and her podcast (Don't Keep Your Day Job).
As I have consumed these messages like a turbo-charged emotional eater at a buffet, the ideas started to overlap - who said what, and who said it first? Where was the original idea originating FROM?
Add in all of the self-improvement books and I am regurgitating...