Craft & Maker > Business > Price Your Craft > Invest In Your Business: Plan For Growth

Invest In Your Business: Plan for Growth

 

Price Your Craft

 

Lesson Info

Invest In Your Business: Plan for Growth

Listen to is going about and doing the exact same thing for your business, so we're going to talk about investing in your business, and this is again another place where I really see people kind of just not very intentional about it, because here's, the thing, if you want your business to grow, you have to plan for growth. You need to know what you want to invest in, to get there you wanted. You need to know where you're headed and what it's going to take in terms of investments in terms of improvements, new equipment hired help. What does it take to get your business toe where you want it to be? So to plan for growth? You, of course, have to know what you want your business to grow into and before this class of roadblock post for the creative live flog with not a misleading title, but also kind of, you know, purposefully provocative title about how she has been lying to us and it's not, of course, just at sea I love at sea. Please don't get me wrong, it's about all the different busin...

esses that are, you know, companies from very big to very, very small, they're selling a vision of what a thriving craft maker, designer service based business looks like, and a lot of times it's just a really you know it's it's somebody sitting in front of their computer or it someone sitting at their computer at the beach and it's just like kind of this one person show successful businesses are not one person shows my business is terry gentilly dot com and I have a whole team of people that work with me and for me to make my business function and I think that this this vision that we have of well all I have to do ever is payment self all I have to do ever is pay enough for my materials all I have to do ever is just you know, work it this after my job is not not true you can design a business that works really well on the side you can design a business that works really well just yourself but I actually think that a lot of us want mohr I think a lot of us want more I think we want to have a brand that people talk about I think we want to have a team that we're the leader of I think that we want to have you know, products that people feel passionate about and a lot of times that takes more and so if you kind of had that little nagging feeling that you're looking for mohr then just this vision that at sea or creative live or me have kind of given to you I want you to say today I want that I want more I want a team I want equipment maybe you want to studio maybe you want a warehouse maybe you want an e commerce site that just you know hums perfectly along what is it that you want your business to grow into because it's the same old story you have to spend money to make money you have to spend money to make money now you can spend less money today than ever before to make money which is fantastic if you haven't read chris gila both one hundred dollars start up you should do that you really can start a business with one hundred dollars I started my business with less than one hundred dollars and in that book that convenient but now I spend a lot more money than that every month my business can spend ten, forty, sixty thousand dollars in a month to keep humming, but we don't talk about that a lot and so a lot of people don't plan for it they think that you know their expenses they're going to stay at that hundred dollars a month mark for the foreseeable future. If you want your business to grow, you're going to spend more money but just like with your personal life spending it figuring out what you're going to spend it on depends on what you want your business to grow into and here's a question that we don't asked ourselves often enough how muchmore money could your business make if you were willing to spend more? How much more money could your business make if you were willing to spend more just like that one hundred dollars a month problem that I was talking about earlier, there was a long time in my business where I didn't spend more money because I wasn't willing tio it didn't see like I thought I could push myself past this stuck point that I was at because this is how much money it costs around my business, but you know, I want to I want to go here the moment I was willing to start spending more money every month, my profit by revenue skyrocketed not saying that that's not a guarantee, but you'll be surprised what you could plan for if you were willing to spend more money every month now, just like I asked you about what one big change you want to make in your personal life with the help of your business, I want to know what one big change you want to make in your business in the next five years so tweet me at terry gentilly hashtag craft week twenty fifteen what is one big change you'd like to make in your business in the next five years? What do you want your business to grow into yeah I would grow what I like to source for my product personally okay so it's right here oh grow up rohit yeah I mean the peppers I use are usually imported or grown by a specific person in in the states which is a few and far between so there really high priced yeah so you want to control more pieces of the puzzle? Yeah awesome and that cost you money but he could also save you money but the value added to the customer they're like they want to know their shift that I like to know where their sources and you know that that's really important to your customers but these days it's is very vital to them apparently yeah, absolutely awesome about another change yeah, I would love a design studio oh, nice big windows and lots of natural light and textiles all around and you have a home in your home found a home studio perfect. You have an idea of what that might cost you I live in l a so a lot. Ok, so one of your big pieces of homework is I want you to figure out how much that would cost you whether that means buying a new house so that you have a specific studio for that and of course there's something you want to talk to your accountant about find out how much of that is actually gonna be financed by the business but you know, if it's in your current house and you want to renovate some part of it or just, you know, rework things I want you to figure out exactly how much that costs that you can put it in your plan let me get one more. Yeah, kitty in addition to selling my jewelry on my website studio kitty dot com I would love to get my pieces into stores particularly kind of the higher end boutique style stores, and I would especially love to work with the owners to create a line just for them so every store would have different pieces that would really appeal to their specific people. Fantastic. So you need to budget for trade shows and trade shows are not cheap that's good, but you have to work that into your plan. Brilliant. Okay, here we go. So we have south east seamstress who says finer dream brick and mortar store and sister shop and then ray loves one says I want to add multiple options from my subscription boxes in the next five years with a retail store to match and the bubble ista who says that I want I want my business to grow and to eight global lifestyle brand in the next five years and stick all right, so I wanted to tell you a little bit about some things that happened to me in my business because the truth is, even when you're making plenty of money, your goals can feel out of reach. If you don't know if you don't have this plan for growth, even though you may have those goals, you're always going to feel like they're just a little further, like I just need to do a little bit more that's exactly what happened to me? I've been making kind of you know that golden six figure mark in my business for a long time that mark that everyone aspires to where they think all the problems go away, let me tell you something, one hundred thousand dollars doesn't make any of your problem go away. If anything, it's harder to run your business making one hundred thousand or even one hundred fifty thousand dollars a year than it is making sixty thousand dollars a year full riel, when you're making one hundred thousand dollars a year, there are all sorts of other expenses that you need to account for. It probably means you're getting a volume of emails where you're going to need to hire an assistant. It also means that there's a certain expectation from what your website looks like or how it runs. There's a certain expectation for how much access people get to you all of these kind of things that go that go into running a quote unquote six figure business and they're expensive and so even though you're making what on paper looks like this great sum the vast majority of that or even just a big chunk of it isn't yours it's not your income we're going to talk about separating revenue from income later but I needed to make investments in my business to get it from what is a hard place to run one hundred one hundred fifty thousand to what is a considerably easier place to run say three, four hundred thousand much easier to run your business they're not easy just easy on dh so I really needed to create a plan for growth but I didn't know where to start by finances were all a mess self admittedly they weren't actually as bad as I thought they were but they felt like they were a mess. I had lots of financial shame I needed to I needed to get finally get a handle on my cashflow one of the problems with running a really low overhead businesses that cash flow is always good and to them when you start spending more money and your cash flow isn't great as in phenomenal anymore you get freaked out so I needed to have a better handle on that because there were like really core investments that I needed to make, I needed to hire more people I needed to expand my programs. I needed to invest in graphic design and web design all of these different things and I always felt like those milestones those growth points were out of reach, so I hired people and I have them here to talk to you about how tio plan for growth with the finances in your business, how to invest in your business. And so my financial team is a company called evolved finance on and we've got corey whitaker and parker stevenson on the line evolved finance they are hey, guys involved finance is a bookkeeping and business coaching company and they do all sorts of amazing things like make tax time less scary. I have the least distressful tax time this year that I have ever had ever. It was, um amazing. It was wonderful. They also help provide financial clarity to entrepreneurs and of course they give advice on those things like cash flow and investment when it comes to planning for growth in your business. So guys, thank you so much for joining me today. So like I said, I want to just die right into this so what kind of business problems can be caused by not planning for the future I talked about, you know, just having some of my goals field insistently out of reach but what else kind of can crop up when you're not planning for growth in your business financially sharmila wave are part of that conversation and honestly it's cash flow cash flow is really everything because like you were talking about a little earlier when you don't have cash available for these plans that and the schools are striving for it becomes very difficult to try tio achieve those so obviously getting your your expenses under control and then obviously trying to pay yourself uh salary every month that that can make it feel like I don't have any extra cash to invest in the business and that's where you personally how to take ownership and say hey, I'm going to take a smaller amount out of the business for myself so I can invest back into it and have a much bigger much more robust and much more stable business down the line yeah or for me purse finally it was I'm going to make more money but take the same amount out of the business ondo that was a really helpful realization to make is that okay? My income actually is really really good I need to grow the revenue in my business without taking more out so that I can accomplish these things that I want to accomplish perfect so what kind was specifically now what kinds of things should business owners be budgeting for down the road yes, sure so I mean there's, some lobbyists, ones and some less august ones, so some of the obvious ones are obviously getting out of your home office and into a bigger studio space or riel office, you know, operating your website, upgrading congress platforms. I know new equipment in hardware, you know, increasing advertising spend especially you're trying to generate more business, so facebook ads and google adwords things like that, and then employees are always a big one, too, like you had mentioned you universal assistant or maybe need some marketing support, I mean, help shipping more more product or warehouse type support so those, I think, the obvious ones that feel more natural to a lot of entrepreneurs because it's just seems like that's what you need to do to run your business now, some of the less obvious ones that people don't always plan for are, like let's say, upgrading your cia ram a lot of people don't understand how expensive you know working in croom software can be, especially as your business gets bigger ah, financial team much like ourselves, you know, even in a county, obviously the more your business grows, the more complicated your finances gets. So having someone help you with that crucial andan, their stuff like insurance your business gets bigger, you want protected having the right type of insurance for your business? You're looking at legal fees if you want to trademark anything, or maybe you want to get in cooperated, those are things to plan for. Travel is a big deal, and I know I'm sure there's a few people here who do with inventory on dh a big thing to save money force fish if you're hoping to sell maura, whatever you're selling is having open to buy dollars an opening, my dollars essentially just money you put aside t either by more inventory to sell or by war supplies so you can create more inventory to sell on, then last but not least, just business savings, it's something that we see, you've seen a lot of their clients, which is just not putting enough in the betting to kind of help you through maybe a down time or a slow month, and just having that extra money in the bank to prepare you for where her, you know, it's going to come your way is an entrepreneur. Entrepreneurship is all about taking risks, and if you don't have money in the bank to take risks with, it can be really hard to make those big weeps ahead in your business, and having that really clear financial picture allows you to be able to do that, okay, so what are some of the expenses that often hinder growth? What are those things that we're spending money on that could hold us back if we're not careful yes, our kind of touched on it to use them already but more specifically there's basically four main categories simply cease or there's a common theme for our clients that come up the first one is software among these descriptions you know they had a fast and so you want to make sure you're monitoring that at all times and keeping track of what you're spending money on every month it's re occurring so it you wait a second one is contractors and employees contractors in place are a vital piece central piece of any business and they're also one of the most expensive aspects of any business and so you want to make sure that when you hire someone that their roles including to find and that they're they're supporting new business and go and or generating your business the third thing is travel this looks kind of self explanatory in my opinion if you're not going to be closing a deal or doing some kind of emotional so promoting your businesses some way or networking in some way don't do it there has to be some for return investment you're traveling on my last scene is marketing marketing is it's a little bit there's? You know we're talking about direct marketing the website via google analytics our facebook it za little bit easier to track what's going on but when you're having to do magazine ads or you're having to print flyers say it's a lot harder to really figure out is this really worth it? So when you when you are making those kind of judgment cultures make sure you're doing the research you're taking this time to consider is this really going to help my business? Similar expense that these guys might be thinking about too is just pr publicity which could be incredibly expensive and also very difficult to really analyze whether it's a return or not but I love that every single thing that you brought up has the capacity to actually go grow your business not just be an expense I think we think about how expensive are businesses is businesses are but forget that every single thing we spend money on really does have the capacity to help us bring more money and in the end yeah no absolutely and all those items we talked about are definitely there definitely over filing messing in it's just making sure teachers were teaching in their thought through so one thing that's kind of unique about a lot of people who watch creative live that's unique about the people in my audience is that a lot of us run really kind of low overhead businesses we don'thave storefronts or we don't have huge stockpiles of inventory what to businesses with kind of running on lower overhead have to take special consideration of when it comes to investing in their own businesses. Yes, sure. So I was a lot of the low overhead businesses like you talk about the tend to revolve around the owner having a skill sets that they essentially provide as a service, so maybe to designer photographer coached blogger wherever it may be if and when you get into that position, if that's your main revenue stream, you really only have two ways you roll your revenue. At that point, you either charge more money or you take on your client's obviously there's a max on how much your client you're gonna be willing to pay for your service and then there's obviously a massive amount of clients that you can actually have time to service. So it gets to a point where you as the entrepreneur you need toe have ah plan and a strategy for what's that next revenue stream what's that next way that you're going to help to generate income for your business that's not based around your service, so for instance, maybe you need to provide a digital product and online proctor maybe you want to write a book or maybe you want to hire employees to take some stress off of you running the business and the unemployed and help take help you take on more clients but whatever you plan to do to either increase your revenue or generate new revenue it's going to take an investment it's going to take some money just like you were saying about you know, operating the website created an all new website or gender cream a new product that's going to take some money and investment to develop create but either we do it if you're going to generate a new revenue stream and it's probably going to cost you some money to create it absolutely and that's something I think you have to plan at least a few months in the future for if not longer than that yeah for a lot of our audience members I think it's even just planning to take the time off from delivering their service or making their products for designers you know they need to have maybe even a whole month of creative time where they're developing a new collection you've got to be able to pay yourself while you're doing that so that's a serious point of investment all right let's talk about the upside to all of this once we've got this all humming and we've got this process serious amounts of profit coming into our business what do we do with that? Oh, it is actually really simple terror it's really actually I'm excited that it's simple but it's one of the few things in business that are is relatively simple the person you always want to do is you want to make sure you're saving for taxes. That's the most important thing, generally speaking, at the minimum, you should be saving twenty percent. If you're doing really well, or you're seeing exponential growth, some of our clients even are even saving up to forty five percent between let's take a living, so make sure you're saying for taxes second thing is, you want to make sure that you're you pay off your debt, you require me that as a result of doing business, and you have the prophet of capital available, failed at that, pay it off, get it off your way. So that is, you need to use allies again in the future. You have that resource there again. Third thing is, you want tio set aside three to six months and three months at a minimum of your operating expenses, which is basically you're faced expenses is things like rent and payroll for employees or contractors, or somewhere. You want to make sure you have three men in three months of that reserve to be able to help you through a slump if you have one. Ah, now you don't those three things you say for taxes, you pay off your debt, and you have the three months that aside then you take out distributions out of business you take out either you can look at a quarterly perhaps of your account since your bookkeeper but the point is you're taking out money after you do those three things and bonus in yourself for all the hard work that you've obviously put into creating the business which is ultimately why you know we all want to be entrepreneurs as did yeah and then and another little just little things is your I'm building a time strategy with your accounts into your bookkeeper you want to make sure you're working with somebody help you you know get an idea of how you're spending your money what you're spending your money on image and helps of helping having someone help you remain accountable and then the last thing I guess is the is retirement planning a lot of you once you start doing well, you know a lot of corporations talking take care of that you're on your own jin entrepreneurs so you know, look into getting setting up a sapphire are or a self employment for a one k thank you for sharing that amazing amount of information and I know it was a lot of information you you guys have actually prepared a hole ah white page for us, right? And people confined that evolved finance dot com slash creative life yeah, just a little more detail what we just discussed if you missed any of that you can grab that there and I highly recommend checking it out I got a little sneak peek kenna we do have a couple of questions coming in if you think we have time yeah, maybe one or two okay you guys cool it taking couple question shot you guys thanks for being with us and let us know if anyone has a question in here as well. So a question had come through from n j are there any guidelines on the percentage of income that you should spend on your online online stats and analysis website creation how do you go about even starting to know where to spend their yeah it's a good question it's kind of client by client bases independently industry around what you're trying to you're serving I have seen clients stand and he's ordered amount of money on content creation and analytics and just making sure that there african babies converting that's normal because they have capital so that the answer is kind of open into the hands really off and do you have a question to you minds men I'm visual scribe I have a question regarding when youth thinks best tio bring on a finance team in terms of you know what is their benchmark in terms of sales revenue that you should have before you bring a person where team on yeah yeah just really depends on the type of well keeping support you wouldn't wanna accountant counting support because there are services out there that even if your business right now is a side business and you have full time employment somewhere else and this is just a side thing you can have, you know a bookkeeping person that maybe you find online like a bench dot com or something very expensive and they can get your finances ready for you and take some of the stress out of you know, obviously getting to tax time with a lot of our clients just because the specialized obviously bookkeeping for online off yours and we provide some some business coaching and extra support we tend to tell our clients once you start to get close to that six figure total revenue generation then it really starts to make sense because then you can start maximizes a tax write off on really start doing some things to limit that tax bill because when you have your first really successful year, I get very excited and then you get not so excited you're yeah still that kind of turnover to think about that first year success is there there are some things you have to pay or as you become more successful so that's again having that that team someone who feels like they can support you along the way could be really important because it doesn't have to be stressful and doesn't have to be exhausted thank you so very much again it's evolved finance dot com slash creative live and people can find you on twitter at evolved finance correct perfect we will be taking you out and talking to you they're awesome thank you guys so much awesome all right so let's look at your business spending plan guess what it look just like your personal spending plan this is not actually complicated stuff people this's again what do you want now what you have what do you want for your business and how much does it cost? It sounds really simple but what I find over and over and over and over and over again is that people aren't doing this math they're not looking at how much stuff this actually costs what I hired he evolved to finance guys I had in my mind an idea of what I thought a bookkeeping team that offers coaching and advice would cost me I was completely wrong it was so much less expensive than I thought it was going to be but I had blown it up to this number that I couldn't afford well how could I afford it if I didn't actually find out how much it was going to cost and when I finally did it's like ok great I could afford that and then you're going to tell me all the other things that I can afford to fantastic you have to know how much this stuff costs now, what I want to ask is, what are some of the things that korean parker talked about that you want to invest in? Maybe what were some of the surprise is that you're like, oh, yeah, I haven't thought about that before, but that would really help me grow my business. What is that? Some of the things that they talked about that you would like to invest in soon? J, um, the fact that he said that I'm the one he's talking to me, of course, but I'm the one making my products all the time. Yeah, so that could be a really, you know, that really could cut into my traveling and, you know, people experimenting time, food experiments in all that time that you play in your kitchen, spending money on food? Yeah, totally, totally awesome. So production assistants that you and maybe even outsourcing production to a certain degree, yeah, yeah, perfect. What are some other things that you want to invest in to grow your business on the track? One things that they said that was really interesting was thinking about what your next revenue stream is going to be a digital or book are those things that can offset kind of a compliment, what you were saying, so that if you are traveling there other mechanisms and work that are still bringing in money yes if you can't physically be there to make it yeah absolutely so meghan almond who is going to be hosting the last day of this craft week conference she's rolled out a number of new revenue streams over the three years and she really does wait until she gets one humming and can plan for adding on that next one before she brings it on so whether it was starting designing an mba or whether it was bringing out her textile collection or her fine art collection each of these new revenue streams required planning before that could happen so that she knew you know her expenses were still accounted for she could still pay the people she needed to make so that she could still pay our mortgage so that's yeah great wonderful about one more yes I think definitely marketing because especially with online it's so vast you should be able to really hit everything that you can hit takes a tremendous amount of time which takes away from making yeah and I really encourage you to look at advertising spend as well I think that's one thing that makers designers crafters could do a lot more of you you know you say that what you really want to do is spend your time making but then you end up spending copious amounts of time on social media some of which is productive and let's face it most of which is not because you're not willing to put money into advertising. We like to put time into bemoaning how facebook has reduced our reach, but we don't have we're not flexible enough with our money to advertise in the way in the channels that they've created for us that are truly incredible ways to get in front of customers so I'd love to encourage everyone maybe think about upping your advertising budget for twenty sixteen or even for this this upcoming holiday season that could be a place where you want to invest more money to create growth in your business. So just like I asked you what is it going to take to live the life that you want to live? I'm gonna ask you now what will it take to run the business you want to run? How much money does it cost every month to run the business you want to run if you don't have a dollar figure for that, how are you going to plan for it? So I want you to know exactly to the let's see to the ten dollars not to the one dollars I want you to know tio teo even to that point of ten dollars what it's going to cost to run your business every month that's the business you want to run not just the business that you have

Class Description

Pricing your products isn’t just about covering your expenses and making a profit. Learn how to set a pricing strategy that tells a story about your business and helps you reach your goals in Price Your Craft with Tara Gentile

Tara is a respected strategist and author who helps her clients make their businesses more profitable and brands more compelling. In this class, she’ll explain both the tactical and strategic aspects of pricing. You’ll learn how to: 

  • Set a price that positively impacts how your brand is perceived 
  • Identify buyers who are into your products 
  • Uncover how your products are really used and why they are purchased 
  • Set prices based on your personal and professional goals 
Tara will share her must-use pricing formula and help you tailor it to the way you do business. She’ll help you account for the many details that go into fine-tuning your price story and help ensure that you turn a healthy profit on every sale. 
Your price matters! Learn how to develop a pricing strategy you can apply to everything you produce in Price Your Craft with Tara Gentile and achieve your big financial goals.


Click here to download the Kickstart Your Profit Bonus Material.