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Small Biz Life

YOU STARTED A BUSINESS! YOU ARE AMAZING AT WHAT YOU DO. But there is a lot more to running a successful business: accounting, marketing, IT, sales, management. You wear so many hats. Add family, friends, health, home…no wonder you are tired! WE GET IT! We have been small business owners for the past seven years and have worked with small business owners for the last fourteen years. We know the challenges of finding the right solutions and juggling all the responsibilities. We know how hard it is to put YOURSELF on the to-do-list. YOU ARE NOT ALONE. COME JOIN THE COMMUNITY. TOGETHER WE CAN GROW AND THRIVE.
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Now displaying: June, 2017
Jun 26, 2017

Episode 87 - 5 keys to creating connections 

Scheduling client meetings, interviews, and other appointments can be time-consuming. In this episode, we discuss appointment scheduling apps that can help you save time and get paid faster.

Why should you consider an appointment scheduling app?

There are many reasons to use one of these apps. Here are some of the most important ones:

  1. Allows clients to schedule appointments with you without the back and forth of email scheduling.
  2. Allows clients to pay for appointments before the meeting.
  3. Automatically sends appointment reminders.
  4. Allows clients to reschedule if needed.
  5. Allows you to set up classes or workshops with multiple attendees.

You can also use these systems to book other types of appointments like discovery calls and podcast interviews. Really any situation where you need to meet with someone else, you can use one of these systems. 

Key features

There are a lot of apps out there. In this episode, we only discuss a few of them. When looking at different systems, you must determine which features you need. Most systems include:

  • Web and mobile apps
  • Payment processing (make sure to compare rates)
  • Appointment reminders
  • Online scheduling
  • Calendar management (some systems are better than others)
  • Checks your calendar for conflicts

Other features

These features may be important for some businesses. Not all systems have these features.

  • Group scheduling
  • Meeting room booking
  • Multi-location support
  • Free/trial version
  • Live support
  • Annual plan savings
  • HIPPA compliant

Popular options

SetMore

  • All key features
  • Free option
  • Annual plan savings
  • $25/mo (accept payments, reoccurring appointments, SMS, and other features)
  • No group/room/multi-location booking

Yellow Schedule

  • All key features
  • HIPPA compliant
  • A place for case notes
  • $29.95 for 1 user / $49.95 up to 3 users / $99.95 for a team of 7

Schedule Once

  • Starts at $5 per month (can be as high as $49 per month)
  • No reoccurring
  • No trial version
  • No mobile apps

Acuity Scheduling

  • All key features
  • HIPPA compliant
  • Starts at $10 per month (19/mo for up to 6 calendars and text messaging)
  • No mobile app

Is there another scheduling app that you use? Tell us about it in the Facebook group.

Links

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https://www.smallbizlife.com/blog/episode-87-5-keys-to-creating-connections

 

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SetMore https://www.setmore.com/

Yellow Schedule https://www.yellowschedule.com/

Schedule Once http://www.scheduleonce.com/

Acuity Scheduling https://acuityscheduling.com/

Free Daily planner to help with focus https://www.smallbizlife.com/Focus

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Jun 18, 2017

We spend a lot of time trying to simplify our businesses, but how often do you think about simplifying your life? In this episode, we discuss tips for simplifying your life. 

Simplify your home

  • Minimize your stuff
  • Automate your home maintenance
  • Have a cleaning kit
  • Pick up 15 minutes each day
  • Choose quality first

Simplify your money

  • Automate your bills
  • Pay off your debt
  • Have an emergency fund
  • Wait 24-48 hours for major purchases
  • Live simply
  • Be grateful
  • Find the root reason for overspending

Simplify your routine

  • Having a morning and evening routine
  • Create a monthly meal plan
  • Recreate leftovers
  • Have a few Plan B meals in the freezer or pantry
  • Don't get the mail until you are ready to deal with it

NOTE: This post contains affiliate links

Links

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https://www.smallbizlife.com/blog/episode-92-simplifying-your-life

 

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Episode 86: Finding your daily focus: https://www.smallbizlife.com/blog/episode-86-finding-your-daily-focus

Episode 33: Quick dinner tips: https://www.smallbizlife.com/blog/episode-33-quick-dinner-tips

The Life-Changing Magic of Tidying Up by Marie Kondo: http://amzn.to/2sH2jhT

72 ways to simplify your life by Zen Habits: https://zenhabits.net/simple-living-manifesto-72-ideas-to-simplify-your-life/

Dyson cordless vacuums: http://amzn.to/2rsYwB3

The Miracle Morning: The Not-So-Obvious Secret Guaranteed to Transform Your Life (Before 8 AM) by Hal Elrod: http://amzn.to/2sMyBrI

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Jun 11, 2017

There have been some significant updates to email list managers in 2017. In this week's episode, we'll discuss what to look for in an email list service and what the major small business providers are now offering.

NOTE: This post contains affiliate links

Links

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https://www.smallbizlife.com/blog/episode-91-2017-email-list-services-update

 

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Mailchimp http://mailchimp.com
Aweber http://aweber.com
Convertkit http://convertkit.com
GetResponse http://getresponse.com
ActiveCampaign http://activecampaign.com

Free Daily Catcher https://www.smallbizlife.com/focus

Dream Catcher: https://www.smallbizlife.com/dreambig

Small Biz HQ https://www.smallbizlife.com/hq

 

((((((((((((((((((((((((((( Rate and Review us in iTunes )))))))))))))))))))))))))

https://itunes.apple.com/us/podcast/small-biz-life/id1039595496 Small Biz HQ

 

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https://www.facebook.com/smallbizlifepodcast/

 

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Thrive Themes https://thrivethemes.com/affiliates/ref.php?id=3007

Jun 4, 2017

When you set the rates for your services, how much did you think about it? How did you come up with that figure? In this episode, we discuss how to set a rate for your services that allows you to achieve your goals and plan for the future. 

Are you a price taker or a price maker?

In the area of pricing, there are two types of companies: price takers and price makers. 

  • Price takers are businesses with lots of competition that do little to differentiate themselves from the competition. Because of the lack of differentiation, rates are set by the market. 
  • Price makers are businesses with little competition in their field or that have worked hard to differentiate themselves from their competitors. Because they create additional value, these businesses are able to set their own rates. This is where you want your business to be. 

If you have ever studied accounting, you probably know that revenue - expenses = profit. This is a commonly taught formula and is the basis for the income statement (also called a profit and loss statement). Unfortunately, this method also encourages us to think of profit last. This is a misguided strategy which causes many small business owners to stay broke or never achieve their dream of full-time, self-employment. 

There is a better way. Rather than settling for whatever profit is left over, we need to determine how much we want to make and develop a plan to get there. 

Price taker

If your company is a price taker, you should be thinking about your expenses as your bottom link. Your formula looks like this:

Revenue - Desired Profit = Expenses

Since price takers have little control over what they charge, they must work hard to keep their expenses in check or else profit will disappear. By staying in the mindset that expenses must be paid with what is left over after you get paid, your business will become more profitable immediately. 

Price maker

Hopefully, you have created differentiation in your business to become a price maker, even if most of your competition are price takers. Your formula looks like this:

Desired Profit + Expenses = Revenue

In this case, you will use profit and your expenses to determine how much you will charge for your services. 

Know your expenses

It's important to understand how your expenses behave as your revenue increases. There are four different types of cost behavior:

  1. Variable expenses: These are expenses that increase or decrease depending on your revenue. These are things like sales or affiliate commissions and pay-per-user software services. 
  2. Fixed expenses: These are expenses that do not change based on your level of sales. The total amount is fixed. These are things like your monthly internet bill, web hosting fees, and insurance. 
  3. Mixed expenses: These expenses have a fixed and variable piece. Therefore, even if there is no usage or sales, you will still pay the fixed fee. As your sales or usage increase, the total monthly amount increases. Most of your utility bills work this way. There is a flat customer service fee plus charges for your usage. 
  4. Step expenses: Step expenses look a lot like fixed expenses but they increase over large increments as usage increases. One of the best examples of a step expense is your email list management software. Typically, you pay a fixed amount as long as your list is less than 2,000 people. When you go over 2,000 people, you jump to the next plan which may cover you until you have 5,000 people on your list. The price does not increase as each new subscriber joins but rather when you jump to the new tier. 

Knowing how your costs behave allows you to plan better as your sales increase. It also allows you to more accurately set your hourly rate. 

How much do you want to make each month?

Have you ever asked yourself this question? Maybe you've thought about how much you would like to make to replace your income or pay off additional debt, but have you really developed a plan? 

When setting your rate you must ask yourself two important questions:

  1. How much profit do you want to make each month?
  2. How many billable hours do you want to work each week?

Most business owners just work, work, work without a plan to stop. Other business owners have no plan for how many hours they need to bill out each month and therefore can't understand why they aren't hitting their goals. Answering the questions above will create a lot of clarity in your life and your business. 

Let's say you want to take home $5,000 per month and have 25 billable hours per week. That's approximately 100 billable hours per month. 

$5,000 / 100 hours = $50 per billable hour for profit

This does not mean that you will bill $50 per hour. This $50 is just to pay yourself. You must add expenses and other items to get your full billable rate. 

What about taxes?

if you want to bring home $5,000 per month, you need to make more than that to pay your taxes. To calculate the total amount of profit needed to take home the amount you want and pay your taxes:

Desired Take Home Pay / (1 - Effective Tax Rate) = Total Desired Profit

 

What is your effective tax rate?

Your effective tax rate is the percentage of your income you pay in taxes, both federal and state. Typically, you can get this off a summary or comparative report on last year's tax return. Add your federal and state effective tax rates together to determine your total effective tax rate. Typically for a small business owner, the effective tax rate is 20 to 35%. 

Calculating your total desired profit

Let's use our $5,000 per month tax home pay and an effective tax rate of 30%. Let's plug these numbers into our formula:

$5,000 / (1 - .30) = $5,000 / .70 = $7,145 rounded

 

 If you want to take home $5,000 per month, you will need $7,145 in profit. By building your hourly rate with your taxes included, you should never be short to pay your taxes again. 

If we divide this amount by our 100 monthly billable hours, we need $71.45 to cover profit and taxes. 

How much are your expenses?

Most of your expenses are probably fixed costs, which makes this much easier. Calculate your average total monthly expenses. To do this, look at all of your expenses each month and add them together. Don't forget to budget for your annual expenses as well. You can also look at your total annual expenses and divide by 12 to get your average monthly expenses. 

What about variable expenses?

There are two ways to deal with variable expenses. You can either directly bill client-based variable expenses to your clients (like software fees or mileage) or you can calculate the average annual amount and add this to your fixed expenses. 

Let's say your average monthly expenses are $3,000. If you bill 100 hours per month, you must add $30 per hour to the $71.45 we calculated for profit. 

So far, we have an hourly rate of $101.45 but we need to add one more thing to get our final rate. 

Allowing room for growth

All small business owners need to set money aside for upgrades, education, and new equipment. Imagine what you could do with $10,000 per year to improve your business. Does that seem impossible? It's a lot easier than you think. 

$10,000 / 12 months = $833 per month

$833 per month / 100 billable hours = $8.33 per billable hour

That's right. If you want to save an additional $10,000 per year for upgrades, expansion, and education and you bill 100 hours per month, adding $8.33 per billable hour will get you to your goal. If you only want $5,000 for growth, it's a little over $4 per billable hour. It sounds much more reasonable now, huh?

Adding it all up

$71.45 + $30.00 + $8.33 = $109.78 or $110.00 per billable hour. 

This would be your hourly rate based on the numbers we used. This would allow you to take home $50 per billable hour, set aside $21.45 per billable hour for taxes, pay your monthly expenses, and set aside $10,000 per year for growth and education. 

Do you think this is something you could do? Frankly, it's something you can't afford to not do. 

But it's too much...

When we do this calculation with new businesses, we often hear, "But I can't possibly charge that much!" 

Before you go there make sure that is really the case and it's not just your fear. Often, we undervalue our services. Jeff tells an awesome story about how a fellow author increased her sales by raising her prices. 

If you do find that your rate is too high, there are ways to still achieve your goals:

  • Increase your billable hours: if you bill additional hours you will lower the rate needed to achieve your goals (but you also need to work more which is not ideal).
  • Decrease your expenses to lower your rate.
  • Sell affiliate products to increase your revenue without additional hours.
  • Decrease non-billable hours through automation so you can increase your billable hours without working more hours.

Make sure you know what you are worth and what others are charging. You might be surprised that you are charging far too little which may be hurting your sales. Don't set your rate low in the beginning. It's hard to raise your rates later. 

NOTE: This post contains affiliate links

Links

((((((((((((((((((((((((((( Visit Show notes )))))))))))))))))))))))))

https://www.smallbizlife.com/blog/episode-90-pricing-your-services

 

((((((((((((((((((((((((((( Mentions links )))))))))))))))))))))))))

YouTube Video https://youtu.be/6JRMo_cxoGI

Free Daily Catcher https://www.smallbizlife.com/focus

Dream Catcher: https://www.smallbizlife.com/dreambig

Small Biz HQ https://www.smallbizlife.com/hq

 

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https://itunes.apple.com/us/podcast/small-biz-life/id1039595496 Small Biz HQ

 

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https://www.facebook.com/smallbizlifepodcast/

 

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https://twitter.com/JefferyWIngram

https://twitter.com/KristinLIngram

https://twitter.com/SBLPodcast

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