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There are many solopreneurs out there that think they are doing well but still cannot afford to scale and grow their business. Why? Lack of profitability.
In this episode of Solopreneur Money, I will show you exactly how you can price your services for value and profitability. You became a solopreneur to create a life you love. Learn how to ensure you are pricing your services correctly so that you can build the life of your dreams.
You will want to hear this episode if you are interested in…
- Making sure your business is not a job [1:22]
- An example of profitability [5:36]
- Finding a guide to profitability [7:13]
Is your business profitable?
You didn’t quit your day job just to start another job, did you? As a solopreneur, you have the opportunity to take your business to the next level, but only if it is profitable.
Oftentimes, solopreneurs start their businesses as consultants. Many of these people left their day jobs to strike out on their own, but instead of charging what their old company did for their work, they decide to slash their prices to beat the competition. Sometimes they only charge half (or less than half) of what their old company did. What they don’t realize is that their business will never become profitable using this model.
Successful businesses use the ⅓ rule
When you charge a low amount for your services you are only accounting for the job part of your business. You are failing to account for the business part. You must consider your expenses, salary, and profit if you want to create a successful business.
Successful businesses use the ⅓ rule. Of your total revenue, ⅓ should go to profit, ⅓ to payroll, and ⅓ to overhead. You can learn more about using the ⅓ rule by listening to episode 16.
Understand proper pricing for your business
To create a profitable business you need to have an understanding of how to price your services. To do this, examine your expenses and your goals to get a clear understanding of the true cost it takes to run your business. Think about your profit, overhead, and payroll. Price your services for value but also so that you can make money and grow your business. Ultimately, you are a solopreneur not to have a job, but to create the life of your dreams.
Check out my FREE guide to profitability
To help you understand how to properly price your services I have created this guide to profitability. Check it out to help ensure that you price your services for value and profitability. My goal is to help you discover how you can create a successful business so that you can live the life that you truly want.
Resources & People Mentioned
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