In this week’s column, Kehlan Kirwan looks at getting paid in your business and why it means so much more than just getting a wage. a
One of the biggest issues that SMEs face is getting paid.
In my business, every cent has an allocation. We know what’s coming in now and in the future and we plan accordingly. New equipment, wages, tax, bills, diesel and so on.
How we develop and work as a company is defined on how we get paid. An interruption to that process is an interruption in how we grow.
Recently we submitted to a client a proposal for costings on a project. In my estimation, I would say we were one of the most, if not the most expensive bid.
They had a budget and had gotten submissions that were obviously lower than ours. So we were in a dilemma. Do we drive down the price of our own bid to suit others or stick to our guns?
In the end, we stuck to our guns, but didn’t get the bid. It may have been a lot easier to relent and move down the ladder, but we decided not to. We value clients and customers, of course, but we also have a value on ourselves.
The past 12 months has been an immense learning curve in my own outlook on this. We were trying to give great quality at lower prices, bidding down to get business. It was a nightmare.
Every week was a constant task of money and wondering where it was going to come from. We were racing to the bottom. By Christmas I had made a conscious decision. We had six months to change how we did business or it was back to the world of PAYE.
Sometimes it’s only when you’re on the precipice that you find the way back.
So, I sat down and reworked our model. I knew the quality with which we could provide clients our services, but that our prices were way off.
We needed new clients and a new cost structure. I set out targets for the company. The targets weren’t financial, but psychological. It was a ladder to get us back up. One rung at a time, one day at a time, one month at a time.
We went after fewer clients for bigger money. Fewer clients, more money, and the quality to match. It becomes a cycle if you do it right.
More money in, means more money to invest in better equipment. Your standard rises and that standard is moved to the client to help keep them. Yes, we are probably more expensive than others, but our quality and what we can do is better.
We want to be one of the best in our field, but we can’t do that swimming at the bottom of the pond. So, we decided to make our own pond, customise what we do to suit our needs as well as those of our clients.
It’s definitely working. In six months we’ve made more money than in all of the last year. June broke the record for most business in a single month.
Clients interact with us far more than before. They want results and so do we. They want to be part of the bigger picture because they know it will benefit them in the long run.
So, getting paid and putting a price on what you do comes down to so much more than just money. It’s about developing the plan to match what you’re asking for. If people want you to drop your prices then ask them why you should.
Setting out getting paid is an important part of your business, but you have to do it with a lot more than wages in mind. It should be about the long-term goal of your company and what you want to achieve.
What you get paid is an image of the value at which you hold you and your company.
In order to survive and thrive it needs to be at the right place for progress. It’s not about how you get money from the business, but about how you are getting money to move forward.
The big picture costs money to achieve and that can only be done by striking the balance between your worth and what the client needs.
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