79% of Canadian self employed people earn less than $22,000 in income (Stats Canada 2005).
That’s below the poverty line (according to CTV, September 13, 2017, the low income measure in Canada for single person is $22,133).
Paints a rather bleak picture – doesn’t it?
Okay – some of you savvy money people are going to notice that I said $22,000 of income (as opposed to revenue).
I don’t want you to think that this whole blog is going to be about numbers but bear with me for a minute…..
So let’s take some general figures, do a little math, and convert that income into approximate revenue figures. Remember, income is what you pay yourself; revenue = sales.
So considering that the average cost of doing business for a service based business is between 30-50% (cost of business expenses, taxes, etc). For ease of calculation, we are going to use 50%.
$22,000 x 2 = $44,000 revenue/sales
Let’s be generous and round that up to $50,000! It’s easier to calculate!
$50,000 in sales!
Over the years, I wondered what was keeping women entrepreneurs, especially coaches & consultants, from breaking through from 5 figures to 6 figures?
The answer seems to be that the feast – famine cycle is keeping their businesses from growing, and holding them back from a predictably profitable business.
What does the feast-famiine roller coaster look like?
- You start out marketing like crazy to bring in new clients – hustle, hustle. You spend all of your time marketing and talking to potential clients.
- Finally, new customers enroll and then you’re in feast mode; you have to deliver the work they hired you for.
- During feast mode, you run out of time to do any marketing.
- Your client work is coming to an end and you realize that money is coming to an end again.
- You start the hustle mode all over again.
I’ve experienced that whole cycle myself when I had my Typing Service back in 1986. Market, market, market get new clients. Work, work work. OMG client work is done; nothing new on the horizon. Time to start marketing again.
It’s so disheartening and a little scary! You celebrate finally achieving $2,000 or $5,000 or $10,000 months — then the bottom drops out!
So it would seem that the solution to smoothing out the feast-famine would be more consistent marketing. While that would certainly improve the situation, it’s not the whole answer.
The answer is that for most businesses trapped in feast-famine is that they lack a strategy to properly price, package and position their products and services. This holds true whether you are a coaching business; a freelancer or any type of service based entrepreneur.
Let’s look at one example which is a done-for-you service (freelancer/consultant)
Web designer whose goal is $50,000 in annual sales.
With each website priced at approximately $2,000
That would be 25 websites per year.
But the truth is that new clients don’t come in regularly spaced out.
There’s a feast – famine roller coaster!
3 Steps to Break Free from Feast-Famine Roller Coaster
1. Create an annual Revenue Roadmap to even out the ups & downs. You need a plan, a strategy, a roadmap to help you generate more consistent profits. Create an annual marketing and sales strategy can help you shift out of inconsistent sales. We’ll dive deep into this during our upcoming Best Year Yet Planning Sessions! Keep watch!
2. Raise your prices (OMG – scary right?) But after coaching hundreds of entrepreneurs, there is one thing I know for sure – most entrepreneurs are dramatically UNDERPRICED for the value they truly provide to their clients. Raising your prices can significantly impact your profitability!
Let’s look at the web designer. If she raised her prices from $2,000 to $2,500 per website; that would mean instead of having to work on 25 websites to reach her sales goal, she would only have to work on 20 websites to generate the same sales. If she averaged 40 hours of total client work per website, she’s given herself a HUGE raise on her hourly rate.
Simply increase your rates 25% could be an easy way to improve your profitability but if you really want to break free from feast-famine roller coaster – consider what it would take for you to DOUBLE your rates!
That’s one of my favorite conversations with my clients – because when you start considering what it would mean to DOUBLE your existing rates, now we’re really looking at how you package and position your products, programs or services! Are you ready to have this conversation?
3. Manage your money to even out payments! I’ve noticed that many entrepreneurs ask for lump sum payments, especially in the done-for-you industries such as web design, photography, interior design, etc. However, what if you could even out those payment such as:
25% at contract signing
25% at half way
25% 3rd milestone
Or even offer a monthly payment plan! A simple payment plan like these can help solve the challenge of consistent cash flow. Could you make changes to how you manage your money to help even out cash flow?
Did the last 2 suggestions raise some concerns for you? Did any of these ideas resonate with you? Wish you had a better idea of how to implement them?
During SHIFT-the money event, we are going to dive much deeper into MONEY issues that face smart entrepreneurs just like you! And I’m going to share some secrets that I’ve learned that will help you not only break free from the feast – famine cycle but also make your business so much more profitable!
Don’t delay – tickets are selling fast! Remember, as part of my reading tribe, your investment for the day is only $20 by using discount code DL20 at the checkout!
Seriously – at that price – it’s a no brainer! A full day of learning proven strategies & mindset shifts, networking nirvana, nutritious lunch and perhaps some dancing on stage! Who wouldn’t want to be there! Bring your best business buddy along! Be nice – don’t keep the secrets to yourself!
Find out more – Register today — https://dianalidstone.com/shift-money/
I only want you to be able to share your gifts with the world AND be well paid for them!
GO OUT & BE UNSTOPPABLE