Business Lessons from Tax Day

Next week here in the US we’ve got Tax Day for most people, so I thought today we’d talk about some lessons from this event as they apply to our businesses.

First, of course, money matters. You’ve probably heard the old saying that if you’re not making money on the work you do it’s a hobby. Hobbies are great, they’re good for stress reduction, exploring the world and enriching ourselves, but not so great for trying to make a balance sheet work or feed your family from it. While I always say that money is only part of a business, it definitely does matter and being a good steward of that money, both in being wise as it goes out and making sure it comes in, is essential.

Second, Tax Day is a reality check if you will for many who don’t look at their paychecks or don’t pay as super close attention to their finances. You can only hide your head from the facts for so many days during the year before you’re forced to face reality of what you’ve spent and earned in the past year. I know that business owners have a ton going on and a ton to pay attention to so it can be easy to not give much attention to anything that isn’t in the “on fire” (aka problem area) category. Thanks to technology though it’s much easier than it used to be to stay on top of more and to be aware of more of what’s going on in your business and how your business is doing than it used to be.

Which brings us to the third and final point: Tax Day is a reminder to be responsible. I have no problem paying the taxes I’m responsible for, but I’ve always said that I wish I could have a little more say in choosing where those dollars went to, in effect holding the government a little more responsible for putting money in certain directions where I think they’re not being as responsible as they could be. So when it comes to your business, choose to be responsible to the commitments that you’ve made to customers. Be responsible about your employees and contracts you have with suppliers (including any landlords regarding the spaces you use). Be responsible to your family and yourself and make sure that you do more than work your business 24/7.

Have you learned any lessons for your business from Tax Day?

Pay Attention for Success

April is here and for many people in the US that means Tax Day. It’s not something that most people enjoy, it can be a big headache and usually comes with stress and lots of work, but aside from the obvious benefit of making sure that necessary government programs get funded, there’s another benefit to Tax Day that isn’t exactly exciting but does serve an important purpose. The biggest reason why I can appreciate Tax Day is because it forces you to increase your awareness about exactly what’s going on in your life, as told by your finances.

One of the reasons people struggle with success is because they’re busy being an ostrich about some of the factors that could hurt, hinder or help their success. Sometimes we know that something’s not right but are scared to look any deeper because we don’t believe that there’s anything we can do. This is a decent start because it’s better to admit and recognize that there’s an issue, but not quite enough if you’ve got any hope or interest in getting beyond the issue. Using the finances example: it’s not enough to know that there’s month left at the end of the money, because it won’t get you to really understanding what’s going on and what you might be able to do about it. Other times we might get all the information but not know what to do with it or feel like it’s all bad news and just throw up our hands saying there’s nothing we can do about it. You may know people like this who are happy to complain about the issues they have in great detail but never seem to do anything that would change or impact those issues for the better. And then there are the people who know exactly what they need to change or things they can do to accomplish success and they don’t do it. Those might be the most frustrating people to know!

So go ahead and grumble about having to put together all your paperwork for taxes if you haven’t already, but then take some time to really look at what you’ve got going on and if you need to make some changes, do so. As for the other areas of success that you’re working on, if you’re at a stuck point, maybe it’s time to take a good look around and make sure that you’re not pointedly ignoring important information or potential (or actual) issues and take action on what you’ve been avoiding or ignoring.

What Do You Charge in Your Business?

Do you struggle with pricing in your business? It’s definitely not an isolated topic, it’s one that must take into account so many other factors, and at the end of the day we, as the business owner, still have to decide which factors matter the most to us because there are no hard-and-fast rules when it comes to pricing things. The only rule that is almost universally consistent between all businesses is that at the end of the day you have to turn a profit. There aren’t rules as far as every product/service having to turn a profit or how much profit is “right” or when the right time is to change your pricing. Which is why it’s such a challenging and frustrating topic for so many business owners. But if you’ve been in business for at least a couple of years, by now you should know that challenge and frustration are pretty much par for the course.

Pricing has been a very hot topic for the past few years with the pandemic and things not being available or being hard to get or having to add extra layers and aspects to your services as a result, plus the strong awareness that so many people were struggling financially. You had to find the balance between charging what you needed to get the products and services out into the world and what people were literally able to pay. People had to make hard choices and I think by and large many of the businesses did their best to be considerate about how much struggle people were facing when they adjusted their pricing and made decisions about costs. While it shouldn’t be unexpected, instead of coming out of the pandemic and being able to work ourselves to rights, inflation surged and costs for so many things skyrocketed and a second round of things being unavailable or hard to get happened on top of things not being completely right from the pandemic.

Which brings us to where we are today and maybe even for the foreseeable future: navigating a very uncertain economy. If you’ve been with me for a while you know that I’m very much in support of business owners making a profit and having a comfortable living. I don’t expect or desire business owners to be practically destitute because they keep their profits so low and turn those savings over to their customers. But as we’ve said, there’s a huge range between being able to just cover your costs and charging people crazy amounts, especially for what you’re offering and compared to competitors. I understand raising your prices to cover your costs (especially if you explain the changes to your faithful customers), but I don’t understand when businesses choose to go with lesser quality products, shorter hours, or generally lack in supply of products or availability and raise prices significantly. Because time and again all I’ve seen happen as a result to those changes are a general lack of customers or a significant reduction in what your remaining customers are willing to spend with you as they take their needs elsewhere.

So don’t be afraid to raise your prices, but know that your customers will always notice that change first before anything else (unless you completely redo your brand or your store), so do it with care and careful consideration. And the ultimate reason that we should raise prices but do it with care is because we love doing what we do and want to provide the best to our customers, and sometimes that means making some adjustments. What have you been considering recently about pricing in your business?

Money Smarts for Success Part 2

Last week on the blog we talked about 3 ways to be smarter with our finances when it comes to success: be less wasteful, pay attention to details and ask questions first. Today we’re going to look at 3 more.

The first one is to shop around. Often there’s no way around buying stuff or hiring someone for your project because you don’t have the necessary tools, you don’t know how to do something or any efforts you would put into making or doing something would be far more costly than hiring someone or buying something. So when you have to make an investment you want to spend a proportionate amount of time investigating your options. Maybe that’s 10 minutes, maybe that’s 2 hours; it depends on the investment you’re going to end up making. Shopping around not only can help you get the best deal, it can also help you get the best items or people to help you.

Second, wait. I know, when we talk about success we think about action, but sometimes the best thing you can do is to slow down and wait a bit before making a purchase. As important as it is to be sensitive to the time that’s ticking away (and as the saying goes: “time is money”), it can be equally helpful to wait for the right time and people and resources to show up and make sure that you really need to make that purchase. It can mean that you don’t end up making a decision you’ll regret later or ends up not really fitting in with everything else or ends up being not the greatest working relationship. Often, while you’re waiting for things to truly line up there are plenty of other things you can work on, so it’s not like you have to sit around and do nothing while you wait for things to line up with both time and money.

Finally, always invest in things that will help you learn. While most people don’t end up on TV knowledge shows, I believe that the more you know, the better you’ll do with achieving success. One of the primary reasons has to do with one of the points we discussed last week: ask questions first. Because the better educated you are and the more you know, the better questions you can ask, the quicker you’ll be able to get to the heart of the matter, and the faster you’ll be able to gain an understanding of new things that show up along your success journey, all of which will save you time and money.

What tips have you learned about being money smart when you’re working towards success?

Money Smarts for Success Part 1

The world has been through several recessions, and people go through various points of financial challenges in their lives, so given some of the financial challenges over the past two years and those that we may be heading into I was thinking about some of the ways that we can be successful with an eye to finances. To be clear, anytime we’re working on success we should be considerate of our finances, as just like any other resource we’re tapping into, rarely is it unlimited (even if usually we’re counting the dollars rather than the pennies like people do when they’re facing financial challenges). So this week and next for our success post let’s talk about some of the steps we can take to continue being successful if we’re watching the bank a bit or just want to be smarter about how we’re spending our finances.

One of the biggest steps we can take is to be less wasteful. There are some scary statistics about the waste that many first world countries have, just think about how much garbage you put out on a regular basis and what’s in that garbage. Paying even a little bit of attention to what you buy and making sure that you’re buying only what you need, will use, or reasonably can sell can make a big difference to how much you’re spending and what you may be wasting your financial resources on.

Paying attention to details can also help you spend less or spend smarter. You’ll catch those extra fees that would be tacked on before agreeing to a purchase, be more on top of your supplies and be able to order before you need things rather than scramble and pay extra when you’re out, read the fine print and understand exactly what you are or aren’t getting if you make the purchase, or checking with people before making a purchase can mean you don’t make a purchase you will regret later.

Finally for today, ask questions first! I am a big question lover, I think it’s so important and helpful to take some extra time if necessary to come up with and really consider questions when you’re making a decision that will impact two of your biggest resources: time and money. Questions can be as simple as “do I really need this” or “will we really use this”, and can get into details about how long it will take to recoup your costs, if there’s another resource that might be a better fit for your needs, if you really need all the bells and whistles that come with what you might buy, if you have the right people in place to implement or use what you’re buying, and what kind of protection plans or warranties are available.

What are your tips for saving money and not wasting it during your success endeavors?

The Business of Enough

How much is enough? This is the question that every business owner has to answer not only when they start their business but every day in many interactions and situations. Ultimately you have to decide if you’re trying to conquer the world with your business or just happy to be known within your city (or very specific niche) or where in between those two you fit.

I think part of the challenge in answering this question is that our growth potential is limitless. If you’re really committed and are able to get your hands on the resources, we’ve all heard the stories of concepts and ideas that are successful far beyond the dreams that were originally laid out. So it can be hard to stay smaller when it seems like all that’s being talked about is becoming the next multi-billion dollar success story.

To be clear I’m not saying you can’t or shouldn’t earn a good living through a business that will support you and any employees comfortably now as well as you in the future, just that you should know your numbers and what “just covered,” “making a profit” and “planning for the future” look like.

Why? Because not every business owner is wired to run a business as big as the household names we all but from or know of, nor do they have a potential client base that big. You certainly can have significant income from a few people if the industry and your offering supports that. You can also get creative and see how you can multiply or add to get where you want to be. And sometimes you have to accept what is reasonable for you to earn based on your business and offerings.

So what is enough for you today? Is your business enough for the future or what will you need to work towards to be covered or better prepared in our changing world?

Making Pricing Decisions

One of the choices that a business has to make is with regard to price. Some businesses dream of being an exclusive business and selling products and services to an elite group of people who can afford something that either has an expensive brand attached to it or the quality of products/services is such that you can charge accordingly. When that’s your choice you know that you’ll never work with thousands of people let alone hundreds of thousands and that the sales will be fewer and farther between, which is OK because you’re making so much from one purchase. The other side of things is to sell inexpensive or less expensive products/services with the goal of becoming a household name or being loved by the masses. Don’t assume that just because your products are inexpensive you can’t make a great profit, there are dollar stores that are very successful and have increased the number of store locations they have in recent years, which isn’t the case for many businesses.

There are two other positions to take on pricing. One is that most businesses can offer some lower cost products/services and at least one premier product/service that costs significantly more than the low cost offerings. The other is that you can offer products/services that are more of an investment but not cheap, which means they’re usually of decent quality and come from a respected brand. I think they’re all viable options, but even in this day and age I still think it’s much more challenging to choose to be an exclusive business than it is to be middle or mixed-stream. And while the low-cost businesses still can be successful, they’ve definitely gotten a bad rap over the years, often because customer service is where they cut back to keep their product/service cost low.

I got to thinking about profit options again because this week the news came out that Google has come up with their next iteration of phones and they’re apparently going to be more comparable to Apple, Samsung and other more expensive phones when historically they’ve competed more along the lines of reasonably priced, decent quality devices. I don’t have a problem with a company having a premier option, but I don’t know that it’s on brand for this company which has many free services and services that price reasonably for many (business) customers. I think we’ll have to see if Google keeps the current phones available but at a lower price or if they’ll completely ignore the many people who are more than happy with a less expensive phone with fewer features that has worked so well for them thus far.

I think it comes back to a question of decision making, considering your client base, and considering where you want to go with your company in the future. How did your company decide on the prices and price range that you have?

Success Through Small But Consistent Steps

Something I share about often with my clients and on my Life and Spirituality blog is the power of the little things. Little things aren’t big things, but how often in our lives, victory journeys and success journeys are we really at a point that we can make big leaps, take big actions, or go big places? Sure there are a few milestones that we hit throughout our lives and a particular journey we’re on, but those are usually few and far between. And there’s nothing wrong with that, because if we all lived for only the mountaintop moments, we’d be missing out on a lot of awesome stuff. Since success often has to do with money, let’s talk about a few examples of how even a few dollars at a time can really add up.

This week I’ve been getting a lot of emails from the author community sharing about one author who lost her husband at 45 from a sudden stroke. He was not only her best friend and significant other, he was a big supporter of her writing and helped with the marketing aspect. It’s been touching to read the stories from the authors who were able to meet him through conferences or other happenings, and a reminder that life is unknown and to treasure as many moments as you can. The reason I bring this up is because the authors are all encouraging their subscribers to pick up one of her books as a way of showing support (as one author lovingly joked, you can’t send casseroles through the mail so this is the next best option). Most ebooks are under $10, so that may not seem like a big help or make a real difference, but when you add up all those little purchases, quickly you get to hundreds if not thousands of dollars.

Another great example is a nonprofit I support that funds a significant portion of their monthly income on $10 donations. Sure you can contribute multiples of $10, but when over 1500 people contribute just their $10 each month, again, you’re able to realistically meet your funding needs without trying to tap people for large amounts, or rely on them to consistently donate large amounts (not to mention that this way you’ve got more people who are excited about what you do and can share with others who can also contribute).

The same is also true for coffee shops. Depending on where you shop and if you decide to get a treat to go along with your beverage, you’re paying between $3 and $10 per visit. Again, it’s not much, but when you get several hundred customers in the door each day enjoying your coffee and treats, those dollars add up. And speaking of dollars, the dollar stores (where everything is less than $5, and often around $1) are one of the fastest growing types of stores in the US right now. And finally, if you were to contribute a dollar a day to a savings account or other investment plan for the future, over the years you’d build up a decent financial foundation for your future.

So this week I encourage you to take the big steps when appropriate and make sure you celebrate them, but don’t overlook the power of small contributions either. What in your life or success journey would benefit from you giving it small but consistent actions?

Family Financial Freedom

Monday here in the US is Tax Day (delayed a month because of 2020 life and health challenges), so of course I’m thinking about finances. Most of us do pay taxes or have to file tax returns at the very least and all of us have to buy stuff like food and clothes and other necessities to help us and our kids survive, so whether we like it or not finances do play a role in our lives. While it can be a stressful topic for us, especially if we don’t have good plans or enough income, as adults we’ve got the responsibility of not only teaching the next generation about finances, but also preparing for or at least considering their future, our future, and our parents/grandparents future.

I think one of the reasons people get so overwhelmed by finances is because we build them up to be this big thing. But finances are a tool, just like our phones and the internet. They can be used to build up or tear down. They can be confusing and they can have a learning curve. They can also be really satisfying to stay on top of. Much of avoiding or reducing the panic and overwhelm is about devoting the time to managing the finances and learning how to manage (and grow) them. Just like other things if you ignore them or lie to yourself about them you’ll end up in a worse mess than you may already be in.

The best thing you can do for yourself, your partner and your kids is to get better at managing your finances. So start with being honest about where you’re all at and what you do and don’t know. Then put a plan in place to not only help you manage your finances but also grow them better too. You can and should do your own research, and also I strongly encourage you to talk with a financial professional at least once to get their guidance on your specific situation. Then talk with your household and get them all involved in putting the plan in place, however small the role may be. Having everyone including your kids involved in your family’s financial health will mean a less stressful tax time and less stress throughout the year as well (not to mention the ability to better plan for special spending like holiday presents!). What has helped your family reduce your financial stress?

Where Does Responsibility Start?

In recent years we’ve had a lot of discussion around both climate/environment and race. Both of these are important discussions to have because we don’t always realize the impact of our words or how we’re living on others and the damage that can be/has been caused. They’re not discussions that can be had overnight and things certainly can’t be fixed or addressed overnight, although they can be improved with each conversation we have. Yes, it is everyone’s responsibility to consider the impact that their words and lives have on others, but we sometimes put the majority of the responsibility on corporations or wealthy people or world leaders. Yes, they do hold a lot of power and therefore responsibility, but each of us are also responsible for how we live and treat each other.

While money often has a lot to do with the impact someone can make or the opportunities they’ve been given, it’s not the only thing, and if we’re waiting until we’ve got the position or finances to make an impact, it’s not likely that anything will ever get resolved. This weekend you’ll probably be hearing a lot about Martin Luther King, Jr. because Monday is the day that we honor him. He wasn’t a particularly wealthy person, and while he was well connected by the end of his life he was doing important and impactful work long before that point. (On a side note: I wish we were able to hear what he would have to say about all that’s gone on in the past year in the US!)

One of his famous quotes that you’ll probably hear a lot this weekend is “I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character.” I think it’s an important statement, and dream, because that’s where so much starts: with our children. And I don’t just mean the biological or (legally) adopted children you have, but how you act/live and the example you set in the presence of any children. As much as some issues can be addressed with money or with age and opportunity (i.e. the ability to vote or choose where/how you live), many of the issues stem or are sustained from how we were raised and/or how we’re raising our children.

While we may begin to address the issues our world has, much more of what happens next will be decided by the next generation. So if we want a different future for our children and grandchildren, we have to start with both ourselves and the children of the world today. We have to start showing them how to treat others with respect and suspended judgment. We have to show them how to care for the world even if you don’t have a lot of financial resources. We have to show them how to be considerate and make educated decisions. We have to show them how to dream and believe in possibilities. I know how hard it is to think about much of that right now with all the turmoil in the world and the US, but in many ways that makes this the perfect opportunity to do it. Why not choose this opportunity when things are being changed to choose to move forward in the best way possible?