Business

  • How to price your product for the win

    How to price your product competitively.

    You have nailed your product/service and you know that it is going to be a hit. But you still need to figure out how much to price it…… Pricing can be a headache because there is no exact science to it; I find it to be a balance between an art and a science. This is one area that entrepreneurs do not always spend enough time on, and it can literally make or break your business. So, exactly how should you price your products?

    There are a few things that you need to take into consideration, so let’s look at those first:

    1. Your costs: How much does it cost you to produce each item?

    Your costs include overheads such as rent, your salary (which you can determine by reading this post), and office expenses. All these costs need to be taken into account so that your product is profitable.

    Use your monthly expenses to determine the total cost of delivering your offering. You can also use your expected number of items or services to be sold each month to determine the average cost per product/ service

    2. Your time: How much time do you spend creating and delivering your products?

    Often, entrepreneurs forget to add in the cost of their time. How much time did you spend producing the product? For a service-based business, how much time do you spend preparing your service and delivering your service to your client? If your time is accurately reflected in your salary, then you can skip this step. If not, then determine how much time you spend on each item that you are selling, and use an hourly rate that reflects rates in the market to determine the total cost of your time per product.

    3. Your target market. How much are the willing to spend?

    Do you want to provide a low cost convenient product or do you want to sell a high cost luxury item? There is no right or wrong answer here; you just need to know what type of product/service that you are planning to sell, and who your customers are, so that your pricing is reflective of this.

    4. Perceived value: How much value are you adding?

    You do not want to price your offering too low that people think you are selling something of low value; at the same time you do not want to price it too high so that people feel that you have overvalued your item. Market research would be useful in assessing how similar products/services have been priced before.

    5. Competitors: How much do they charge?

    It would be short-sighted to ignore your competitors when determining how to price your offering. If you have done your research properly, then you should be able to determine who your competitors are, and you can do mystery shopping to get a better understanding of their pricing. The pricing of your competitors will give you a good feel of an acceptable price if you are offering something with similar value. Of course, if you are giving higher value, then you can easily hike up your prices.

    How to determine the price of your product

    You are now ready to determine the actual price, and this does not have to be fixed forever. You can tweak your pricing as you get more information and feedback from your customers and competitors or if your costs suddenly change.

    You can determine your price using a top-down or bottom up-approach

    Bottom-up approach

    Add all your expenses, and then determine the profit percentage that you want to earn from your products. This profit percentage can be anything from 5-50%, but it is best to do some competitor analysis so that you are not so far off in your pricing.

    Add the profit percentage to your costs and that will give you the price of your product.

    * Remember to include tax costs, even if you are unsure of exactly how much tax you will be required to pay at the end of the year.

    Top-down approach

    Determine how to price your product, based on your competitor and customer research. After deducting your costs from this price, the amount remaining is your profit. You can then make a decision as to whether the profit is acceptable to you.

    Make sure that the price makes sense in both approaches, by testing it. You can market it to a few customers and request for feedback on your pricing. But don’t let this alone lead you to make changes in your prices. The best approach is to set your prices for a few months before reviewing them.

    How to price your product competitively.

    If you are not able to sell at the prices that you have determined, then you might need to look at a few other areas in your marketing and sales plan before changing your pricing:

    • Does the number look realistic?
    • What are your competitors doing?
    • What have you done in the past?
    • Do you need to market more? Do you need to reduce your price to sell more or increase the value of your offering to attract higher-value customers?

    Remember to be confident when setting your prices. Do not undervalue or reduce your prices with the hopes of selling to more customers. Instead, target the customers who will appreciate the value that you are offering in your products; these are the type of customers you want to keep. 

    Found this post useful? Please share with your business besties or pin it!

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  • How to pay yourself from your business

    How to determine how much pay yourself as an entrepreneur.

    There is nothing more stressful than putting up capital, running a business, and not getting a penny in return. Sounds crazy right? It is actually a more common practice amongst entrepreneurs than you would think. How much should you pay yourself anyway?

    There is a tendency to believe that you should either

    • not take any money from the business until it is profitable OR
    • use your business credit card to go on a spending craze

    Neither of these two approaches is the right way to manage your finances. And I can tell you from experience that neither will get you closer to your financial goals.

    How much you should pay yourself, is especially important if you have quit your full-time job to fully focus on your business. The truth is, your business might take months, if not years, to break-even. You would not want to go through sleepless nights of hard work, only to have to send around the offering plate for people to help you pay your bills.

    Here is what you should do, because you deserve to pay yourself:

    1. How much is your business left with after paying non-negotiable expenses?

    This will give you a realistic view of how much you could be paying yourself.

    However, remember that non-negotiable expenses include taxes, which are usually paid at the end of the year. So remember to make an allowance for these expenses when calculating how much your business can afford to pay you.

    2. There is a difference between a salary and a dividend

    This is rather obvious, but I believe that it is the reason why a lot of us in business wait until their business is profitable, before paying themselves.

    A salary is what you pay yourself to reflect the value that you bring to the business every day. A dividend is what you pay yourself as a shareholder for investing your funds into the business. A dividend is usually paid out when the business has made profits (income made is higher than the money spent on expenses).

    Whether your business is making money or not, I believe that you are adding value and putting your time and effort into growing your business. Just like any other person that you would employ, you deserve to be paid.

    Leave the dividends until when your business is profitable, but in the meanwhile pay yourself a reasonable salary.

    So the question remains: How much should you pay yourself?

    3. How to determine your salary

    There is obviously a limit to how much you should pay yourself. Because the income that you make from your business will first need to cover

    • all non-negotiable expenses
    • taxes (if your business is profitable)

    Basic-worth approach

    You can determine how much to pay yourself by using your basic worth as a starting point:

    • How much do you believe is your basic worth? You can use the last salary you earned from employment or the salary of people in your area of expertise as a starting point
    • Add inflation so that your income is protected from an increase in the cost of living for at least one year.

    So for example, if your previous employment salary was $30,000 per year, then you can use the same salary amount and add inflation of 6% to determine the salary to pay yourself -> 30,000*1.06 = 31,800. Divide this amount by 12 to get your monthly salary -> 31,800/12 = $2,650.

    It is important to make sure that you have enough funds to put back into the business for growth and any unexpected eventualities after paying your salary.

    As a rule of thumb, try and keep your salary within 20-30% of the money you earn from the business.

    Personal expense-based approach

    Start by determining your monthly expenses, that your salary needs to cover. Also factor in your annual and quarterly expenses into this monthly cost.

    In the early phases of your business, it is important to be as prudent as possible with the funds that you have, so try and cut down on your discretionary personal expenses.

    Once you have determined your total monthly expenses, you can use this figure as your salary, as long as it is not an extremely high percentage of your expected income (between 20 and 30%).

    How to determine how much pay yourself as an entrepreneur.

    4. Allowing for your salary in your business budget

    As part of running your business, you need to have a budget at least 12 months ahead of time, so that you are always in the know of how much income you need to make in sales in order to cover your costs (create a budget). Make sure that your salary is included in these costs so that even if you need to raise capital or take a loan, your salary is already factored in.

    Download this profit tracker to start tracking your income and expenses, including your salary expense.

    [mailerlite_form form_id=9]

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  • How to track your income and expenses for a thriving business

    How to track your income & expenses for your business to thrive.

    Do you know how much money you made last week in your business? Last month? The uncomfortable truth is that numbers and finances are the backbone of any thriving business. Knowing how to track your income and expenses can seem overwhelming with all the responsibilities that you have as an entrepreneur over and above the million and one things on your “mom” to-do list, especially when starting up.

    The good news is, you can end your overwhelm right now, pick up your pen and notebook, and start taking these notes on how to get your finances in order and to start tracking your income and expense, like a boss! Or, you could hire someone to do it all for you. BUT, you are better off learning the basics of your business finances (like I mentioned in this post) because an understanding of the hard-fact numbers could help you in making better business decisions.

    Heard of the phrase “numbers don’t lie”? The numbers from the financial performance of your business will tell you whether:

    • you are making enough money given the investment that you have made in your business
    • which products/ services are profitable
    • you need to set money aside for taxes (if your income is higher than your expenses)
    • you have reached your financial goals for your business

    Either way, it is important to put in a routine on how you will track your income and expenses. Otherwise, how would you know whether you have a 7-figure business if you can’t tell how much money you made (or lost) last month!

    Here is a step-by-step guide on how you can start tracking your expenses and income on a weekly basis, starting today!

    Step 1: File all your receipts, invoices and payment documents

    The first step is to create a method for filing all your business-related income and expenses. This could be an online file, e.g. if all your transactions go through your bank account and an online version of your bank statement is available. Make sure you update this file at least weekly; this way you will not get to the end of the month or year and experience overwhelm in trying to find where you kept all your financial records (which are very expensive and time-consuming to retrieve from the bank I must say!).

    Quickbooks is one of the most widely used online accounting/ bookkeeping systems for recording, uploading, tracking and reporting of financial data. They also have an app which you can use to

    • Take photos of your physical receipts;
    • Upload them to Quickbooks;
    • Record the expense or income item and store it in your account

    Step 2: Open a business bank account

    Open a business bank account or a new personal account if it’s not feasible to open a business account immediately. Remember to still open a business account as soon as you possibly can. Separating your personal expenses from business expenses will make weekly tracking and updating so much easier. You will also be thankful you did it when tax season comes, and you need to show your bank statements if asked about certain transactions.

    Step 3: Select a method of tracking your finances

    Select the method of tracking your finances. There is really no right or wrong option here. The key is to choose an option that you are comfortable with. You do not need to be an excel genie to master the art of tracking and monitoring your income and expenses.

    Choose the tracking method which suits your lifestyle, skills and comfort level

    • Handwritten
    • Printable
    • Google sheets
    • Excel

    Step 4: Select method of monitoring and maintaining your financial accounts

    • Manual
    • Quickbooks
    • Real-time finance system

    The more automated the system, the more expensive it will be. While many SMEs are embracing real-time finance systems to help them assess the performance of their business on a daily basis, it is not a necessity if you are just starting your business.

    Step 5: You are now ready to record!

    If you are using a manual method, then you can download this free printable below to help you record your income and expenses. It also includes all the important fields that you need to record for each transaction.

    [mailerlite_form form_id=9]

    If you are recording your transactions on a spreadsheet, you can create a column for each of the suggested fields below in a monthly income tracker, and start completing each transaction and its details:

    • Date
    • Name of Service/Product
    • Name of customer
    • Amount
    • Year to date total
    • Transaction number
    • Payment type – cash, check, credit card, etc
    • Account detail

    The columns required for expenses are similar to those required to record income:

    • Date
    • Description
    • **Category
    • Amount
    • Year-to-Date Total
    • Transaction/Check Number
    • Payment Type
    • Account detail

    Categories for expenses include:

    • Advertising
    • Mileage
    • Salaries
    • Your own drawings (or salary)
    • Meals & Entertainment Expenses
    • Office Expenses
    • Office Supplies
    • Professional Services
    • Rent, Utilities & Phone
    • Travel Expenses
    • Bank charges
    • Insurance
    • Depreciation

    Always indicate the category because of tax purposes. There are some expenses for which your local tax authority might not allow for you to deduct from your income for purposes of determining how much tax to pay.

    Step 6: Select frequency of updating your records

    e.g. Quickbooks allows automatic updates for specific banks that are supported on their platform.

    Otherwise, you can manually upload your bank transactions by using a spreadsheet or any other supportable format.

    If you do not have many transactions, and you are not able to upload your transactions, you could also record them in quickbooks, or even on a document which can be used by a bookkeeper for month end or year end preparation of financials.

    Step 7: Store all your financial information in one place

    There are many free online programs which you can use to store all your financial records, including Evernote, Notion, Quickbook and cloud drives, e.g. google, iCloud.

    The important thing is that you know how to track your income and expenses so that you know what type of information you need to save for all your financial transactions.

    What areas of tracking income and expenses do you find most stressful?

    How to track your income & expenses for your business to thrive.

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  • Systemize your business like a #bossmom using my 4S Method

    Systemize your business like a pro using my 4s method.

    What parts of your business are the most stressful? What if it was possible to stop getting stressed out about anything and everything in your business, and start working like a BOSS? Systemize your business using my 4S method; this is not a quick fix, but if you take time to put in the work upfront, you will reap the benefits and become the #bossmom that you truly are!

    I am sharing my 4S method with you because these systems have enabled me to

    • build a community from scratch during a pandemic
    • raise two babies and a toddler AT home and spend 24 hours of my day with them
    • share valuable information with you so that you can build a thriving business!

    If you do not systemize your business, you are going to spend so much time running around doing things that you should actually be doing on autopilot! 

    Remember, your time will always be limited and that is why you need systems to help you get over the overwhelm, burnout and misery that a lot of mumpreneurs endure unnecessarily.

    And don’t even think of hiring someone to help you out before you go through my method below. You can’t expect someone else to know what to do when you don’t have a proper system in place to show them!

    1. List down all your tasks

    What do you do every single day in your business?

    What have you done for the last 6 months in your business?

    List everything from marketing to product development to customer enquiries to social media communication to website development…… Whew, being an entrepreneur is werrrk!

    2. Split your tasks between once-off and re-occurring

    You should now have main categories and then a column for once-off and re-occurring tasks under each category. So for example, under CUSTOMER there should be a column “ONCE-OFF” and a column “RE-OCCURRING”.

    If you find yourself repeating the same task often, then the chances are high that part of the task can be automated.

    Tick off the items in the “re-occurring” list that you think can be automated.

    For example, if you find yourself sending the same response to your customers when they make a specific enquiry, then save this response in draft emails or templates on your email service provider’s platform, and use the template instead of typing out the response each and every time. This task should therefore be ticked as “automated” to indicate that you will work on putting a process in place to cut down the time spent on this task.

    Systemize your business like a pro using my 4s method.

    3. Systemize the tasks marked as “automate” in the list of re-occurring tasks

    If you think it can be automated, chances are that someone has already developed an app or program to automate the task. Let Google be your friend in doing the necessary research, and hit me a reply if you need help on finding solutions to systemize your business.

    Technology can be your best friend if you make time to find simple solutions and apps to help you thrive! The best part: a lot of them are FREE!

    The apps I use (almost daily) the most to manage this community:

    • Notion – planning & keeping all my processes and biz resources in 1 central place
    • Canva – DIY graphic design
    • Mailerlite – Free customer email management tool
    • Planoly – Plan my social media posts

    4. Prioritise tasks that cannot be automated

    There will be tasks that will need your unique attention, and some that not even an assistant can help you with.

    This is when you need to prioritise. The items on the top priority should be revenue-generating, customer-nurturing items.

    Everything else should either be:

    • outsourced
    • batched (find a time(s) during the week to complete these activities in one go, instead of trying to do them everyday)

    You are the CEO of your business! Do not spend your time completing tasks. Actually, not more than 20-30% of your time should be spent on these tasks.

    You should be spending 70-80% of your time thinking about how to grow your biz, build trust from your target customers and improve your product/service offering and promote your business.

    Like and share this post with your fellow bossmom friends if you found it useful and you are ready to systemize your business using my 4s method!

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  • Overcoming overwhelm as a mumpreneur

    How to overcome overwhelm as a mumprene in five simple steps.

    Last week, I surveyed a group of around 15 women online and the results were astounding; 85% of these women mentioned that their greatest challenges as mothers with businesses was lack of time and burnout! So if these are feelings you often experience, you are not alone. It is very easy to experience overwhelm as a mumpreneur, with so much to do and the same amount of time to do it as everyone else in the universe. The truth is…..

    Time will never be on your side! As a working mom of 3, I often find myself working at weird times of the day (or night), trying to literally burn the midnight oil before my kids stop my work mode!

    That’s why creating and committing to using a system to make the best use of your time, will get you from constantly feeling overwhelmed as a mumpreneur, to becoming confident that you are in control of your business.

    Here are 5 hacks that have helped me to build a business as a new mom of twins, while being able to spend quality time with my newborns and toddler.

    1.CREATE TIME SCHEDULE

    I created a time management planner for bossmoms, which you can download below. It has been a timesaver, and helps me to focus on my action plan for the week without becoming derailed by other “urgent” things that come up during the week.

    [mailerlite_form form_id=3]

    2.USE PRODUCTIVITY APPS

    You can view my post here to see the apps that I use frequently to keep me on track with my goals and action plans every single week. The app that I use the most from this list is To-Doist.

    I stopped taking mental notes of things I need to do, and started documenting everything. The minute I have more than 5 things on my daily to-do list, I start prioritizing and rescheduling, to avoid the overwhelm as a mumpreneur that eventually turns out into burnout.

    3.BECOME AWARE OF HOW YOU USE YOUR TIME

    If you have an iPhone, then you know that the new screen-time functionality/app can either be a sore eye opener or a lifesaver, depending on how you look at it.

    This app has helped me to be aware of how much time I spend on unproductive activities, excess time on social media and chatting on Whatsapp which never seems to be an activity that has an end to it.

    If you are on Android, you can try an app like Moment.

    Once you are aware of how you spend your time, then you will be able to easily pivot and make new decisions on your time-spending habits.

    Trust me, you do not have to reply to every single whatsapp or Instagram comment within 5 minutes of receiving them. The world can wait. Be intentional about how you spend your time, so that

    • you can have more time to build your empire
    • you can have more free time to do the things you love
    How to overcome overwhelm as a mumpreneur in 5 simple ways.

    4.KNOW WHEN TO OUTSOURCE

    Depending on the stage in which your business is, and your budget, you might be at a point where your business will not be able to grow if you do not get help.

    If you already have a good system to make your tasks efficient and you are managing your time well, and still experiencing overwhelm, then this might be a sign that you need help.

    HOWEVER, ensure that all your processes and systems are in place so that your team member can perform her tasks efficiently and in a way that does not require your constant monitoring.

    5.KEEP EVERYTHING IN A SINGLE PLACE: SYSTEMS

    I have detailed post on how I systemize my business so that repeatable tasks are efficiently completed.

    The point is, if you are organized and know where to find things easily in your business (whether online or in your physical files), then

    • hiring someone to help you will be so much easier
    • your company can actually function without your presence
    • you will save yourself A LOT of time that would otherwise be wasted by trying to find where you saved your brand logo, or what to check for when creating an Instagram post

    In conclusion,

    You do not have to experience overwhelm as a mumpreneur. Commit to taking a week to doing the groundwork of putting systems in place, becoming more self aware of how you are spending your time, and committing to 3 time-saving habits for 3 months.

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