Mastering Your Money in Any Industry

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5 tips for keeping your books in the green

Donna Stone, Business Coach

Money is the lifeblood and oxygen of any business. The more you know about getting money, the more money you get to keep. Here are my top five tips to help small business owners, builders and tradies succeed and thrive when it comes to keeping the books in the green.

 

1. Know your pricing

For many industries, pricing is a harder aspect of the job, particularly if you are new to it. In my experience, the No. 1 pricing mistake is often not being thorough enough. From missing or forgetting about materials, overheads and over or underestimating, the repercussions can be significant.

This, of course, is knowledge accumulated over time, gained from having your boots on the ground. But knowing your overhead costs on a daily, weekly or monthly basis is absolutely imperative to your ability to price your services accurately.   

 

2. Leads: Know the sources and track them

Do you know what’s helping bring in business? Lead tracking determines the source, whilst close monitoring will help generate more leads once you know what works and, hopefully, close more deals.

This is also a great way to understand the pulse of your industry, how your customers are choosing to spend and what they are willing to spend on—all of which are critical to the success of your business, from quotations to labour costing.

 

40 percent of invoices paid late

3. Ask for what is owed to you

How long is your business going to last if you can’t pay your staff, buy materials or pay your phone bill?  In the 2016 inquiry into payment times and practices in Australia, Ombudsman Kate Carnell revealed almost half of all 3,000 businesses surveyed had more than $10,000 owed to them, whilst 1 in 2 small businesses reported more than 40% of their invoices were paid late last financial year.

I know most business owners don’t ring up their customers and ask to be paid, but you’re literally holding your own business hostage by not doing so.

 

4. Make it easy to pay

Have variable payment options and seriously look at having an onsite debit or credit card machine. Imagine finishing a job, getting the customer’s nod of approval, then just swiping their card using a portable EFTPOS machine on the spot.

Some businesses pass on the cost (especially for larger purchases), whilst others (especially smaller invoices) just wear the cost of the fee. To me, getting paid and not spending time chasing the debt far outweighs the bank fees. Ultimately, do your due diligence before choosing what’s right for your business.  

 

5. Say “no”!mastering your time in the building industry

I get it. It’s hard to run a business. I’ve heard people say it’s better to have something than nothing at all. I disagree. If a prospective customer refuses to pay a deposit or is super difficult when you’re only at quoting stage, I call that a D-grade client and it’s time to say “no”.

What’s the point of doing the work if the customer is dragging out payments or not paying at all? Your time and energy are better spent elsewhere. Don’t suffer the consequences of being desperate. It rarely ends well and the consequences are great.

 


About the Author

Donna Stone is a business coach with three decades of experience. She grew her own business from a garage to a multi-award winning operation that spanned five locations nationally. Donna works with business owners and other business coaches, consultants and trainers to help them build their own success. Her Coach the Coach™ program has proved exceedingly popular. Donna is a prolific writer with hundreds of articles written and six books published.