As I was preparing myself to file taxes, I noticed something once my November entries were added. At the end of the year I would have made half of what I made last year. I could be totally upset, scream and feel like a failure. However, I am far from being a failure. I know that in life you have your ups and downs but it all about how long you allow yourself to stay down. My down time is over and it’s nothing but up from here on out.
I sat down and look at what happened this past year to figure out why I ended up earning less. My strength came with being able to clearly pin point the weaknesses and developing a solid solution.
6 Reasons Why I earned less this year then in 2011
Reason #1 – Low prices & under pricing
Pricing is probably the hardest thing to figure out. You don’t want to be too low or too high. It’s all about knowing your worth and pricing according. My biggest fear is that if I increase my prices too high I will loose my current clients. The feedback from successful businessmen and women that I have gotten is that fear is holding my business and me back from greatness. There are options such as payment plans, pricing packages and the ability to say, “this is what I can do for your budget” or simply “no thank you”.
My solution – My price increase will take effect across all services I provide come January 1, 2013. For my web design services, I am putting in place 3 brand new packages at three different price levels with automatic payment plans. Also I am getting rid of my free consultations, no more picking my brain. I will save my free content for my blog.
Reason #2 – Refunds
“The customer is always right.” That is what we learn and practice. I personally try to please everyone, going above and beyond. However sometimes that may not be enough. At the beginning of the year I had to do a refund that bumped me out. I was able to bounce back from it and learned a huge lesson – to say in my own lane and not all business leads are worth taking. Since then I put in a refund policy in place.
Reason #3 – Took on less work due to lack of polices
Taking on less work wasn’t my plan. I let it happen in several ways. The first is giving out quotes with no deadline. So say I quote someone for a web design job in 2011 and never close the deal but he or she decide in 2012 that they are ready to start. I still have to honor those prices. Another example is when someone pays for a service in full but the work either doesn’t get done or never completed. Follow-ups are important but at what point do you just give up after hearing or receiving nothing. That time spent takes away from other things.
My solution – Plugging loopholes and having clear polices. When I give a project quote it will have an expiration date. If the project will start at a later time a deposit must be paid to lock in the price. My waiting list will come back. If and when a project stalls it will be bumped down and the next project on the list will take priority.
Reason #4 – Scope Creep
Scope creep is when extra changes and items are added to a project after it starts. More work should mean more money but when you want to keep a client happy you shut up and do the work. Sometime scope creep affects other things, such as the ability to keep the project on schedule and completed or takes on additional work. I get frustrated when I feel someone is taking advantage of me, but then I remember I let it happen.
My solution – When an extra request comes in on a current working project, I will remind the client what was agreed to and that this item will be charged in a separate invoice and will be completed after the already agreed upon work. I will also draw a line on how many revisions can be done.
Reason #5 – Unexpected bumps in the road
During the summer I was summoned and pick for jury duty. My business took a hard hit with the time away and trying to catch up afterwards. It was then I realize my business needs to be more mobile. Even though I am setup as an solo proprietorship I may need to think about adding a least one-team member. Until then I started to apply some techniques to help ease unexpected emergencies.
Reason #6 – I stopped working
I became overwhelmed and just needed a break. Consistently working maybe good for the bank account but not for your health.
My solution – In the new year I will be taking more vacations, even if it’s a staycation. I will be unplugging from technology a couple of days each month as well. I need time to recharge my batteries.
I can’t wait for the new chapter in my business. It going to be tough but I plan on rolling up my sleeves and putting in the work. Here’s to a new day, new me and new me.