Episode 533 – Are you SELLING yourself BROKE?
Owners of cleaning companies work super hard and make half the money they should just because they don’t know something is even wrong.
It’s not just a lack of profits for you, but it’s a lack of profit for your company. This costs you your ability to serve your client properly, to take care of your employees, to grow and eventually it will drain your love for your business! Let’s take a look at this problem in detail!
False Belief: As long as I’m getting new accounts, I’m doing well.
The Truth is:
- This is the same bad logic that is behind common thoughts such as, “I’m losing money on every unit, but I’ll make it up on volume.”
- Gross sales is a vanity metric. It’s actually better to have a smaller company with bigger margins, not the other way around.
- Net profit is the key to EVERYTHING in your business (growth, happy customers, good employees, better skin 🙂)
False Belief: Even though I’m not making money now, when I get bigger, I’ll make money.
It actually gets HARDER to maintain profit percentage the bigger you get NOT easier! We love gross sales only when the net profit is good! Also, it is harder to maintain margins the bigger you get.
False Belief: If I just had a million dollar company, THEN I would be rich forever.
- Interesting fact: I don’t even remember my first $1M year. It’s really about a bigger profit year to year – that’s what I focus on.
- You would rather have a $250,000/ year company in sales making $100K in profit than a $2.5M/ year company making the same $100K.
- Many people think they will make 50% profits and many make 10% and don’t understand why- they are both wrong!
- Also don’t be afraid to get a CPA and/or a bookkeeper to help you work through this. Just remember it’s not the accountant’s job though to tell you if you’re making money. You have to be on top of it! They supply the data.
False Belief: The amount of work you put in dictates the profit you make and life is fair.
- You have to get over the bad connection between the work you do and what you get paid.
- It makes no difference of the AMOUNT of work you do, it’s the VALUE.
- There is a WORLD of difference between an employee who comes in and leaves and the owner who thinks about the business all the time, works 100 hours/ week and risks everything.
- Cleaners have chosen a job where there’s limited value to what they do, there’s only so much they can bring to the job before it literally gets dirty again.
- You create the systems and the systems create money. You have to be ok with that!
False Belief: Raising prices is immoral.
Let’s break this down:
- 20% net profit is NOT unreasonable. Anyone who thinks you should work for less is unreasonable!
- Proper pricing is good for your business, your employees, AND your GOOD customers. You just have to help them understand that!
False Belief: If I raise prices, my customers will quit and I will go out of business
The reality is a lack of profit is a GUARANTEED way to go out of business, I’ve never seen one company go out for raising prices. BAD customers will quit, good ones will understand. It’s your job to communicate!
Get this right and you will be SHOCKED at how little work you can do for MORE money
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