Are you even a creative small business owner if talking about profit still feels like taboo? #Guilty

You see, as creative small business owners, we sometimes tend to put our hearts ahead of our money mindset, leaving money on the table. 

I’m here to tell you that it’s a-ok to start thinking with a profit-first frame of mind within your business. After all, we’re in business to make money and there’s nothing wrong with taking pride in your hard earned profits. 

If you’re reading this thinking “oh my gosh, WHAT IS PROFIT AND WHERE DO I FIND IT?!” then buckle up. In this blog, I’ll walk you through the profit formula, how to win the pricing game, and ways to increase your profits. 

Profit Formula

Let's break down the profit formula: 

Income - Expenses = Net profit / loss

As a service-based small business owner, it’s imperative to monitor profit closely as opposed to only monitoring revenue. Why? Well, revenue is somewhat irrelevant if you aren’t managing your expenses. Some businesses end up spending more than they’re making, meaning they aren’t walking away with any profit. And believe me, you want to turn your business into a profitable machine because sweat equity doesn’t pay the bills!

Ways to increase profit 

There's literally only three ways to make a profit (without winning the lottery!).

1.  Increase revenue by increasing (a) prices (b) volume of clients you're serving.

2. Decrease expenses.

3. Doing both 1 & 2.

Increasing your Revenue 

Winning the pricing game comes down to finding the right fit customers who value what you're offering and are willing to pay the price. If you’re just getting started in your business and not sure how to price yourself, take a peek at what some of your competitors are doing. But REMEMBER: *looking* busy and being *booked & busy* are two different things. It’s easy to get caught up in the comparison game with your competitors and their pricing, so treat it cautiously before putting too much pressure on yourself to match pricing. 

Make sure you’re pricing yourself competitively, and also for profit! As your business continues to grow, you can always increase your prices slightly to increase your revenue. 

The volume game might require expanding your market/reach or experimenting with upsells/cross sells with your current customer base (i.e. increase the volume of products they're buying from you, which ultimately increases your income).

Before you focus on more, more, more, ask yourself what you’re really after. Is it more revenue, or is it to simply feel busier because that feels more productive to you? More doesn’t necessarily mean better, friend!

Decreasing Your Expenses

Expense management comes down to being more efficient with your current resources (doing more with less) and closely monitoring the ROI on your efforts (i.e. what activities are generating the best results - do more of that).

This requires a hard, honest look at your business activities and making peace with some things you may need to let go of. Sometimes our favourite things in business are actually costing us the most money with little ROI. Part of the money mindset is playing the long game and making strategic decisions that allow you to stay in business for the long run instead of only focusing on short term gratification. 

Become More Profitable In Just a Few Weeks

It doesn’t take years or months to become more profitable. It takes just a few weeks to get organized and start seeing your bank account rise. 

Here are a few easy steps you can take right now to cut your expenses:

1. Review your credit card statements and cancel recurring subscriptions that are no longer serving you. 

2. Review your pricing and offerings - can you implement a small increase this month?

3. Plan, plan, and plan some more! Create a budget for the next 30 days and stick to it. Avoid impulse business purchases (I believe in you). You don’t need another online course or workshop promising unrealistic results. Start with these simple steps for a more profitable future. 

And hey, if you’re totally lost, you know I’m here for you! For all of your financial consulting and money hype gal needs, shoot me an email! 

>> Learn how to build habits around organizing your money right here.