First off, realize it’s a problem and make this issue a priority! Second, the key here is to bill in advance and get paid in advance. Our system is to get paid first and work second. This eliminates the issue of ever having to go after payments! If the clients have an issue with this business model, then there’s probably one of two issues here. First, this is a sign they’re probably broke and the wrong customer for you. Second, it could mean you haven’t built the right amount of trust and rapport with this customer.
The first thing to do is to get a business account set up for yourself. You DO NOT want to co-mingle business and personal accounts! In most states you need to get an LLC set up in order to get a business account. Even if you’re a sole proprietor, you can open up a personal business account. The main thing is that you want to start off by keeping that business account and money separate and then paying yourself from that business account when you need to. As you grow, you can put yourself on salary. When you want to retire, you then put someone else on salary to manage and you can make owner’s withdraws.
This is a really important question because if your pricing model is broken, your BUSINESS is broken. The short version of an answer this question is to charge by hours. We want our cost of goods sold to be 50%. If you start to charge by square footage, or unit, or anything else, this can start to get wonky, so keep it to charging by hours. So in other words, figure out your cost, then double it. Of this 50% profit, 20% of that will go towards your overhead and the remaining 30% will be your profit. Once you get this model right, it’s way easier to grow and scale the business model! If you want more details on this, check out our YouTube playlists here.
The beautiful thing is that we just mentioned the first step, which is getting your pricing right. The second major step is to make sure you have the two core funnels set up: employee and client attraction. You need systems and processes set up to attract clients. You also need an employee attraction system set up that takes you out of the hiring equation as much as possible – keep it automated! The key takeaway here is that you need the systems and processes working well before you need them. They also need to be scalable!