12 Ways to Improve Your Business Performance

Are you looking to improve business performance and take your company to the next level?

We understand the challenges you face in today's business landscape. That's why we're here to help you maximise your business performance with 12 simple yet powerful strategies.

12 simple yet powerful strategies to maximise your business performance

1. Harness Technology

In today's world leveraging technology is crucial for improving business performance.

Evaluate your business processes and identify areas where technology can streamline operations, improve communication, and enhance efficiency.

 Explore the best software applications, automation tools, and digital platforms that align with your business needs. For instance, you can implement accounting software, such as Xero, to streamline financial processes, or customer relationship management (CRM) software to improve client interactions.

By embracing technology, you'll reduce manual work, increase accuracy, and free up time for more strategic initiatives.

2. Eliminate Distractions

Time is the scarcest resource for businesses, so it's crucial to identify and eliminate distractions that hinder productivity.

Start by evaluating your daily activities and pinpoint tasks or meetings that consume excessive time without yielding significant results. Consider reducing standard meeting durations, implementing efficient communication channels, delegating non-essential tasks, and eliminating any unnecessary administrative work.

By streamlining your workflow and focusing on high-value activities, you'll make better use of your time and energy.

3. Say Goodbye to Bad Customers

While it may seem counterintuitive, holding onto unprofitable or troublesome customers can drain your resources and hinder growth.

Take a close look at your customer base and identify customers who consistently delay payments, demand excessive support, or are simply not a good fit for your business. Whenever possible, transition away from these customers and redirect your efforts towards more profitable and mutually beneficial relationships.

This allows you to concentrate on clients who appreciate your services and contribute positively to your bottom line.

4. Invest More

Now that you've freed up time and resources, it's essential to reinvest them strategically.

Consider allocating the extra time towards researching and implementing new initiatives that will enhance your business performance. Whether it's investing in employee training and development, upgrading technology infrastructure, or expanding your product/service offerings, make sure to allocate dedicated time, key personnel, and funds to support these initiatives.

By investing wisely, you'll position your business for long-term growth and success.

5. Get a Plan

A clear roadmap is essential for navigating the challenges and opportunities of running a business.

Take the time to develop a comprehensive business plan that outlines your goals, strategies, and action steps. Start by defining your business's mission, vision, and values, then identify your target market, competitive advantages, and growth opportunities. Break down your goals into actionable tasks with specific timelines and milestones.

Regularly review and update your plan to adapt to market changes and ensure you're on track to achieve your objectives.

6. Reconfigure

Surrounding yourself with the right people is critical for driving business performance.

Evaluate your team and identify individuals who may not align with your vision, show resistance to change, or fail to contribute positively to the company culture. While it may be a difficult decision, consider parting ways with these individuals to create space for growth and success.

By nurturing a team of motivated, aligned, and talented individuals, you'll foster a positive work environment and maximise productivity.

7. Focus on Value-Add

Stand out from your competitors by focusing on providing exceptional value to your customers.

Take the time to understand their needs, pain points, and desires. Tailor your products or services to address those specific needs and exceed expectations. Look for ways to go above and beyond in terms of quality, customer service, or unique features.

By consistently delivering value and making a positive impact on your customers' businesses, you'll foster loyalty, drive customer satisfaction, and generate positive word-of-mouth.

8. Be Different

Differentiation is key to attracting the right clients and employees who align with your business goals.

Identify your unique selling proposition and leverage it to position your business as a desirable choice in the market. Assess your strengths, specialised expertise, or exceptional customer service that sets you apart from competitors. Showcase your unique qualities in your marketing.

By emphasising what makes you different, you'll attract ambitious, growing, and engaged clients who appreciate the value you offer.

9. Deploy Strategic Marketing

Developing a well-defined marketing plan is essential for expanding your reach and increasing market penetration.

Allocate a percentage of your budget specifically for marketing efforts. Leverage a mix of traditional and digital marketing strategies to amplify your brand presence.

By strategically deploying marketing tactics, you'll generate brand awareness, attract new leads, and ultimately drive business growth.

10. Ask for Referrals

Word-of-mouth referrals remain one of the most powerful and cost-effective ways to acquire new customers.

Actively seek out referral relationships and develop partnerships with complementary businesses or industry influencers who can recommend your products or services. Encourage your satisfied customers to refer their friends, colleagues, or business associates to your company. Implement a referral program that rewards customers for successful referrals.

By leveraging the power of referrals, you'll tap into a network of quality leads who are more likely to convert into long-term, high-value customers.

11. Keep on Top of the Numbers

Monitoring your business's financial health and performance is crucial for making informed decisions and ensuring long-term sustainability.

It's essential to have accurate and up-to-date information on your cash flow, revenue, expenses, and profitability. Regularly review financial statements, such as profit and loss statements, balance sheets, and cash flow statements, to gain insights into your business's financial position. Additionally, identify key performance indicators (KPIs) specific to your industry and business goals. These metrics may include revenue growth, gross profit margin, customer acquisition cost, or inventory turnover.

By tracking these metrics consistently, you'll have a clear understanding of your business's financial performance, identify emerging trends, and make data-driven decisions to optimise your operations.

12. Take a Break

As a business owner, it's easy to get caught up in the day-to-day demands and responsibilities. However, it's essential to recognise the value of taking breaks and having time away from your business.

Stepping away allows you to recharge, gain a fresh perspective, and come back with renewed enthusiasm and inspiration. This break can help alleviate stress, prevent burnout, and foster creativity. When you return to your business, you'll have a clearer mindset, improved decision-making abilities, and the energy to propel your business forward.

Prioritise self-care and ensure you schedule regular breaks to maintain your well-being and maximise your long-term productivity.

A holistic approach to improve business performance

Remember, running a successful business requires a holistic approach that encompasses financial management, strategic decision-making, and personal well-being.

By incorporating these 12 tips into your business practices, you'll further enhance your business performance and create a sustainable foundation for growth.

At First Class Accounts Ovens and Murray and Busy01 Consulting, we're here to help you improve business performance. Our expert services in bookkeeping, payroll, app integration, forecasting, and more can streamline your operations.

Let's maximise your success together. Contact us today.

Using data analytics to give your business a competitive advantage

Data analytics is rapidly changing the way businesses are operated. By making use of your financial and non-financial data, you can quickly start to gain a deeper insight into your operations, performance and financial management.

Data-driven decisions are quickly becoming the norm, for even the smallest business. Data analytics allows helps you spot the patterns, understand the data trends, and preview the upcoming threats and opportunities for improvement.

Taking a deep dive into your data

Data analytics has become a crucial tool for small business owners that want to stay competitive and grow their operations in the most informed way possible.

By collecting, analysing and making sense of data, you can gain valuable insights into your performance. This means you can quickly identify the areas that need improvement and the opportunities in the market – while making data-driven decisions about your future

Deliver the best insights from your data

Calculate which data and metrics are most important to the business

What are the key numbers and drivers of success for your particular business? By analysing your data, you can determine which data and metrics are most important to your business and track these numbers in your cloud accounting platform, like Xero, or forecasting app, like Futrli.

Track KPIs in your software stack

Your cloud-accounting platform can provide a dashboard that shows all your performance indicators (KPIs) key in one place.

To add to this, you can also integrate with industry specific or tailored reporting apps to create detailed management information and reports. Talk to us about integrating the appropriate apps for your business to help you dive into your data.

Tracking and reporting on these key numbers helps you analyse your data, create detailed breakdowns of your business information and monitor your sales, business and financial performance in real-time.

Look for the patterns and opportunities in the data 

What you’re looking for in your data is the trends, patterns and insights that will help you become a better business.

Pull out the trends in your customers’ behaviour, spot opportunities for growth and optimise your operations, to help push the company towards success.

Non-financial data about customer behaviour and experiences can also be invaluable. When you know your customers expectations and spending habits, that gives you the foundations to tailor your products and services to their needs. It also helps drive sales, revenues and get a better return on investment (ROI) from your operations.

Use AI to analyse your data

With the help of artificial intelligence (AI) and machine-learning applications, you add the ability to sift, filter and compare your data in superhuman ways.

AI can process and analyse data at a speed and volume that would be impossible for a human being. Software can measure progress towards goals or detect variances in budget numbers, flagging up these insights as notifications in your dashboards and management information.

Keep yourself ahead of the competition

With the right smart data-analysis tools at your fingertips, you’ll make informed decisions that help you stay ahead of your competitors and new entrants.

These apps and tools help you identify new market segments, spot opportunities for growth and optimise your operations to stay competitive in the market. In the fast-moving digital age, keeping on top of your data is the fastest way to give your business a much-needed edge.

Talk to us about integrating data analytics apps in your business

Data analytics is an essential tool if you want to stay competitive and grow your operations.

We’ll help you integrate the appropriate apps to track the right data, produce the most insightful management information and deliver the insights for your business.

Whether your goal is improved business outcomes, cost savings, increased revenue or improved customer satisfaction, we’ll help you delve through the data and make informed decisions that will drive the future of your business.

Is your 2024 planning leading you down the right path?

We’ve highlighted 5 important elements that your 2024 strategy needs to focus on.

As a business owner, CEO or managing director, it’s important to look forwards. Your job is to guide the course of the company and to provide the roadmap for a successful year.

But navigating the hurdles and driving the business to success is never easy – especially when you’re confronted with a market and economy that’s still in a state of recovery.

A business plan that’s tailored to your key 2024 challenges

So, what are the current and potential risks that you should be planning for in 2024? And how can you use innovation, leadership and forward-planning to sidestep these bumps in the road?

Key items to consider in your 2024 strategy include:

The impact of a global economic crisis

The business world has bounced back from the pandemic, but there’s no escaping the fact that we’re still facing a global economic crisis that looks to continue into 2024.

This means markets are slow, prices are high and keeping the lights on in the business is a challenge. This is the reality and it needs to be reflected in your goals, targets and long-term plan for the year ahead.

Finding new ways to overcome the supply chain crisis

While there are signs that global supply chain issues are recovering, finding the products and raw materials that you need can still be difficult.

Ocean freight is still slow and the logistics of getting goods from A to B is a risk that should be built into your planning. Where possible, it’s sensible to source local suppliers. This helps cut down on logistics times, reduces costs and makes your supply chain strategy more sustainable.

It’s also worth shopping around for the best deals, so you can source goods at the lowest possible prices.

Locating the right people during the ongoing talent shortage

Your people are a vital part of your growth strategy. So, when there’s a shortage of talent that can really hold back your plans.

To fill those roles and keep the company running smoothly, it’s a good idea to broaden your net. Think about promoting existing talent from within the business, or putting word out through your network that you need experienced new hires.

Using contractors or freelance workers can also be a good short or medium-term solution if you can’t locate the right permanent employees.

Embracing the very best in new technology

Business software solutions have jumped forward in leaps and bounds in recent times. Working the latest cloud apps, automation tools and AI solutions into your strategy can quickly give your business a competitive advantage. 

If there are manual tasks in the business that can be automated and tracked via software, get them automated ASAP.

Smart use of automation can speed up your productivity, boost efficiency and free up time for you and your team to focus on higher-value tasks – like business development, sales and customer service.

Talk to us about integrating apps into your business.

Learning to pivot when new opportunities arise (or threats appear)

Building agility into your strategy and 2024 planning is a must.

We live in unpredictable times where new opportunities can appear overnight, and unforeseen threats can rear their head without warning. Your business needs to be able to pivot, refocus and quickly adapt to these changes.

Planning out multiple ‘what-if scenarios’ can help you try out scenarios and pull together multiple strategies.

Talk to us about a review of your 2024 planning

Keeping your business plans up to date and refreshed is a big part of keeping your company ahead of the competition. We’ll help you review your 2024 plan and find the areas where you need to tweak, upgrade and refocus your strategy and targets.

Applying for a business loan

Applying for a business loan can be a daunting task, especially with all the paperwork and number-crunching involved. However, it's important not to take lending lightly, regardless of how easy it may seem to take on debt.

At First Class Accounts Ovens & Murray, we understand the challenges that business owners face when seeking financial assistance. So today we're sharing some valuable insights and tips to keep in mind throughout the business loan application process.

Present a clear business case

While banks are experts in money, they’re not necessarily knowledgeable about your area of business.

It's crucial to present a clear story that connects the dots for them. Show the bank how the loan will unlock business growth, ultimately ensuring that they will be repaid. By presenting a compelling business case, you can make the bank's job easier and increase your chances of securing the loan.

Essential documentation

To support your loan application, you will need to gather certain documents that demonstrate the financial health and viability of your business. Make sure you have the following:

Income statements and balance sheets 

Provide financial statements from the past two years to showcase your business's financial performance.

Up-to-date financial statements

Keep your financial statements current and accurate. These documents reflect the financial position of your business and help lenders assess its stability.

Business plans or project plans

Outline the direction your business is taking, including your growth strategy, market analysis, and future plans. This will demonstrate to the bank that you have a clear vision for your business's success.

Tax returns 

Provide recent tax returns to verify the accuracy of your income statements. This helps the bank evaluate your income stability and repayment capacity.

Bank account statements

Include bank account statements to validate your business's financial transactions and cash flow.

Leveraging accounting software

Using cloud-based accounting software, like Xero, can significantly simplify the loan application process. These platforms generate comprehensive reports and financial data on demand, providing essential information to support your loan application.

With features such as income and expense reports, growth trends, and forecasts, you can present a well-rounded picture of your business's financial performance and potential.

Talk to us when applying for a business loan

Navigating the complexities of the business loan application process can be overwhelming. At First Class Accounts Ovens & Murray and Busy01 Consulting, we are here to support you every step of the way.

From organising your financial documents to analysing your business's financial health, we can help position your business for success. 

Secure Your Business Loan with Confidence

Applying for a business loan requires careful preparation and attention to detail. By presenting a clear business case and providing comprehensive financial documentation, you increase your chances of securing the loan you need to take your business to the next level.

At First Class Accounts Ovens & Murray, we understand the unique challenges faced by business owners, and are here to assist you throughout the loan application process.

Contact us today to get the support you need and put your business in a better position for success.

Getting more from your procurement spending

Keeping the wheels of your business turning can be expensive. As part of your ongoing business cycle, you’ll need to buy the goods and services that keep you operational. This might be subscriptions to business software, raw materials for production or even accounting services.

But if you’re going to get the maximum value from this procurement process, it’s important to be fully in control of what you’re buying and how you manage these costs.

Managing your procurement in tough economic times

There’s no escaping the fact that cashflow is tight for many businesses at present. Globally, we’re experiencing a worldwide economic slowdown, alongside the pressures of a supply chain crisis that has pushed up prices and reduced margins.

Because of this, it’s important for you to keep a close eye on your procurement, so you can find the best prices, strike the best deals and keep your business in a positive cashflow position

If you’re using the most expensive logistics partner, or spending too much on raw materials, this can start to have a big impact on your profitability and your ability to grow.

5 key ways to enhance your procurement spending

Keeping your business in a positive cashflow position is all about ensuring your cash inflows (your income) outweigh your cash outflows (your costs).

When your procurement costs are high, it makes it a real challenge to maintain this positive cash position. The answer is to examine your spending and to proactively reduce your costs, improve your supplier terms and generate a tighter and more effective procurement process. If your procurement process helps you cut down on your spending, you’ll also improve the overall financial health of the whole business.

Here are 5 key ideas to help you get in control of your procurement:

1. Reduce your base cost per item

If you buy goods into the business, it’s important to think about your basic cost per unit. Your unit cost is difficult to control, but there are ways to reduce it. Try getting multiple quotes from a variety of suppliers so you can source a provider that offers the best mix of value, quality and reliability, at an economical price. Negotiation can also be an effective way to bring prices down.

2. Cut your logistics and delivery costs

Physical goods have to be transported to your premises and to your end customers. These logistics costs are an integral operational expense, but they can still be reduced as part of the procurement process. Search for carriers and logistics providers that offer the services you need and then see if they open to negotiation on prices. Ask if discounts are offered if you offer shorter payment terms or if you join a preferred customer program to help reduce prices.

3. Nurture the best supplier relationships

Nurturing good relationships with your suppliers sets the best possible foundations for your procurement management. Building that stability into your supply chain deepens trust and makes it easier to negotiate favourable terms. Put some effort into nurturing good relationships with your supplier and make sure you always pay on time. This helps to build a good reputation with your supplier, making your procurement process simpler and more cost-effective.

4. Reduce tax and duty costs

Whether you’re selling nationally or across borders, there are likely to territory-specific taxes and duties to pay when buying and transporting your goods. Working with a tax adviser who knows your industry and/or territories helps a great deal. They can check you’re paying the right taxes on your goods/services and that they’re correctly categorised for taxes like VAT or GST. Working with a customs broker also ensures you pay the correct duty on all your imports and exports.

5. Using tech to get in control of procurement

Business software is transforming the efficing of procurement. There are plenty of cloud-based procurement solutions available, giving you the benefits of 24/7 accessibility in the cloud and one point of truth for all your procurement data and reporting. This helps to streamline your internal processes, manage risk more effectively and keep a close watch on spending against budgets, cashflow and expected expenditure. By keeping yourself informed, you can manage your expenses by putting caps on spending, or switching to new suppliers that can offer you a better deal or cheaper prices.

Talk to us about your procurement management.

Taking the time to improve your procurement management is a no-brainer in the current climate. You’ll improve your cashflow, supplier relationships and your ability to ride out the slowdown.

3 cloud accounting tips to save your business time and money

Keeping on top of your accounts is a big part of running a successful and profitable business. But you don’t want to spend ALL your time dealing with bookkeeping and accounting tasks, especially when that time could be spent building customer relationships, or developing new products etc.

So, how do you keep your finances in check, while also spending less time on your accounts?

1. Bringing your accounting into the digital age

Switching to cloud accounting can be a revolutionary step for many business owners, especially when you look at the ways you can streamline and automate the basic accounting tasks.

By using accounting platforms like Xero, QuickBooks, MYOB or Sage, you get all the basics of small business financial management, but with the benefits of smart automation.

With most modern cloud accounting software, you can:

• Automate the scanning and digitisation of your expenses and receipts
• Automatically reconcile your bank transactions with your invoices and bills
• Connect your accounts to other time-saving apps for mileage claims or staff expenses.

2. Getting paid faster and with less admin

With a cloud accounting platform driving your business, you also make it easier to send out e-invoices and get paid faster and more effectively.

Improving your payment times and cash collection can make a huge difference to your cashflow position, and also sets the right expectations with your customers – making it clear that you require to be made on time.

Using the invoicing function in your business software, you can:

• Quickly send out electronic invoices as soon as a job is completed
• Set up automated invoices to be sent out at pre-agreed points in a project
• Include payment buttons on your invoice, so customers can pay via PayPal or card
• Remove the barriers to payment and speed up payment times.

3. Getting a better overview of your important numbers

Using cloud accounting isn’t just about automating the time-consuming financial admin tasks.

By recording and tracking all the financial and non-financial data flowing through your system, your accounting platform can actually provide you with a goldmine of useful real-time information.

With cloud accounting providing your reporting, you can:

• Access totally up-to-date real-time information, to improve your decision-making
• Track your performance against targets to see how well the business is performing
• Monitor spending and budgets to keep your cashflow under control
• Understand your return on investment when it comes to sales and marketing activity
• See how promotion has driven sales but reduced your profit, due to discounting.

Talk to us about setting up a more productive kind of accounting

If you want complete control of your finances and business decision-making, updating your accounting software and processes will be key to achieving that goal.

We can help you implement accounting software into your business, so you can maximise the benefits you get from automation and real-time data.

Get in touch to talk through updating your bookkeeping, payroll and more through cloud accounting.

Using your network to create business development opportunities

People buy from people. It’s an obvious observation beloved of salespeople, but it’s also why networking is such a powerful tool to create business development opportunities.

Networking helps build relationships with other professionals, share ideas and learn from each other. By connecting and partnering with the right people, you can create meaningful business relationships – relationships that may lead to new and innovative business opportunities.

Networking as your blueprint for success

Building a successful business network is essential. But how do you start developing these relationships with customers, suppliers and other business owners? And how does connecting with your peers help you broaden the scope of your opportunities?

Building up your network and connecting with people helps you:

Find potential customers and expand the reach of your brand

Attending trade conferences and industry workshops gets you in front of your target audience. It’s a chance to chat, find out customer pain points and understand your audience.

Meet new business partners

Networking at the right trade events also helps you meet other business owners in your sector, and in other complimentary industries. It’s an opportunity to forge new partnerships and create co-branded opportunities.

Get referrals from trusted members of your network

When you have trusted relationships in your network, these people are far more likely to recommend your business to their own network. Word-of-mouth promotion is the best kind, after all.

Locate the perfect mentor

We all have something to learn from more experienced members of our network. This is a golden opportunity to seek out a mentor who can give you advice, share their experience and improve your management skills.

By taking the time to nurture your network and build relationships with the right people, you can open up a world of possibilities for your business. As a business adviser working across multiple sectors, we can introduce you to new people, connections and opportunities.

If you’re looking for an introduction to a new network to create business opportunities, come and talk to us.

6 Warning Signs You're Undercharging & tips to increase your prices

As we head through 2023, business owners are continuing to face a challenging year ahead. With the cost of living increasing and the possibility of more interest rate hikes, it is more important than ever to ensure that your business is charging appropriately for your services. It's important to have clients value your worth and understand that your time and expertise are valuable.

If you're unsure if you're charging enough for your services, here are 6 warning signs you're undercharging & tips to increase your prices. 

1. Flat pricing for two years or more

In most industries, prices increase slightly each year to keep up with the market. If you've kept your prices the same for two years or more, it may be time to review your fees and make sure that they're competitive.

While it's understandable to want to keep prices stable for your customers, leaving your prices unchanged for too long could lead to missed opportunities for revenue growth and leave you vulnerable to competitors who are adjusting their pricing.

In today's dynamic business landscape, where the cost of living and interest rates are constantly fluctuating, it's important to periodically review your pricing to ensure that it remains competitive and aligned with your business goals.

One potential solution to flat pricing is to adopt a dynamic pricing strategy, where prices are adjusted regularly based on market conditions, customer demand, and other factors. This approach can help you stay ahead of the competition and maximize your profits, while still offering value to your customers.

Another option is to consider offering tiered pricing, where you provide different levels of service at varying price points. This can give customers the flexibility to choose the level of service that best fits their needs and budget, while also providing you with opportunities for upselling and cross-selling.

By regularly reviewing your pricing and exploring different pricing strategies, you can ensure that your business remains competitive and profitable in 2023 and beyond.

2. Your profit margins are shrinking

If you find that your profit margins are shrinking despite working more hours or taking on more clients, it's a clear indication that your pricing is not aligned with your business goals. While it's important to stay competitive, it's equally important to ensure that your pricing allows you to generate the profits you need to sustain and grow your business.

To determine whether your profit margins are healthy, it's essential to track your expenses and revenues regularly. You can use accounting software or work with a financial management professional to help you analyze your financial statements and identify areas where you can cut costs or increase revenue.

By paying close attention to your profit margins and adjusting your prices accordingly, you can ensure that your business is on track to achieve your financial goals and thrive in 2023 and beyond.

3. Overworking with no room for expansion

If you're overworking yourself and can't afford to hire additional help, it's a sign that your prices are too low.

While being busy is a good problem to have, overworking yourself to the point where you can't afford to hire additional help is not sustainable in the long run. If you find yourself in this situation, it's a clear sign that your pricing may not be aligned with your business goals.

To address this issue, you could consider raising your prices to better reflect the value you provide to your clients. Additionally, you could look for ways to streamline your processes and increase efficiency, which can help you get more done in less time and reduce the need for additional staff.

Another option is to explore different pricing models, such as performance-based pricing or project-based pricing, which can help you charge for the value you deliver rather than the time you spend. This can give you more flexibility to scale your business and increase your profitability while still providing value to your customers.

By taking a strategic approach to pricing and exploring different pricing models, you can ensure that your business is profitable, sustainable, and able to grow in 2023 and beyond.

4. No questions asked about your quotes

If all of your new clients accept your quotes or charges without any questions or attempts to negotiate, it's possible that you're charging too little for your services. Your clients may be thrilled to be getting a good deal, but it's important to make sure that you're not undervaluing your skills and time.

So, if you find that all of your new clients accept your quotes or charges without any pushback, it may be time to reevaluate your pricing. While it's great to have satisfied customers, it's important to ensure that you're charging what your services are worth.

To address this issue, you could consider conducting market research to see how your competitors are pricing their services. You may also want to look at your pricing structure and determine whether it reflects the true value of your skills and time. If you're consistently undercharging, it may be time to adjust your pricing to better reflect your expertise and the value you provide to your clients.

5. Clients don't treat you well

Do your clients take you for granted or fail to appreciate the work you're doing? If so, it could be a sign that you're undercharging for your services. When clients feel like they're paying too little, they may not fully understand the value of your time and expertise.

To address this issue, it's important to communicate the value of your services to your clients. This could involve explaining your pricing structure and the amount of time and effort that goes into each project. It may also be helpful to set clear expectations upfront, including deadlines, project scope, and any additional fees that may apply.

Another solution is to cultivate a client base that truly values your services. This could mean shifting your focus to a more niche market or simply being more selective in the clients you take on. By working with clients who understand the value of your expertise, you can build stronger relationships and increase your profitability over time.

6. Overbooked and turning away clients

If your business is thriving and you're turning away clients because you're fully booked, it's a clear sign that you're in high demand and providing valuable services to your customers. However, if you're not charging enough for your expertise and time, you may be leaving money on the table and missing out on potential growth opportunities.

One effective solution to this problem is to raise your prices. By increasing your rates, you can maintain your level of service quality while also boosting your profitability. However, it's important to be strategic when implementing price increases. Research the market rates for similar services and adjust your prices accordingly. You don't want to price yourself out of the market or lose your existing clients, so consider implementing the price increase gradually or only for new clients.

Another alternative is to outsource services like bookkeeping and payroll as an effective way to free up your time and focus on revenue-generating tasks. By delegating these tasks to professionals, you can ensure that they're handled accurately and efficiently while also reducing your workload.

Being fully booked is a great problem to have, but it's important to ensure that you're not leaving money on the table by undercharging for your services. By raising your prices strategically and implementing efficiency-boosting strategies, you can continue to provide high-quality services to your clients while also growing your business.

What should you be charging?

Setting the right price for your services can be a challenge. You'll need to do some research and evaluate the market to determine where your competitors are pricing their rates. Additionally, you'll need to take into account your level of expertise, the value that you provide to your clients, and your overall costs.

One strategy that many businesses use is value-based pricing. This approach involves setting your prices based on the value that you provide to your clients. By focusing on the outcomes and benefits that your clients receive from your services, you can set prices that are more in line with your worth.

At First Class Accounts Ovens and Murray, we understand that finding the right pricing strategy for your business can be challenging. We're here to help, and we can provide guidance and support to help you determine the right rates for your services. Our team has extensive experience working with businesses in a variety of industries, and we can provide insights and advice that are tailored to your specific needs.

In addition to helping you set your prices, we can also provide support with other aspects of your financial management. From bookkeeping to payroll, we can help you streamline your financial processes and improve your profitability.

Staying sustainable

As we enter 2023, it's more important than ever to ensure that your business is charging appropriately for your services. By keeping an eye out for the 6 warning signs you're undercharging and implementing the appropriate tips to increase prices you can improve your profitability and ensure that your business is sustainable in the long term.

At First Class Accounts Ovens and Murray, we're here to help. Whether you need assistance with pricing, bookkeeping, payroll, or other financial management services, we have the expertise and knowledge to support you and your business. We understand the challenges that businesses are facing in 2023, and we're committed to providing you with the guidance and support that you need to succeed.

Get in touch to discuss how we can help with your pricing, bookkeeping or payroll today.

Understanding your breakeven point

Understanding your business breakeven point is essential to know how much money you need to make to stay in business. It can therefore help you make well-informed financial decisions and practical business plans.

The breakeven point is the income or sales needed to cover all costs. Any earnings above this point generate profit. So your breakeven point tells you the minimum sales required to continue operating a viable business.

Understanding the breakeven point in conjunction with financial reports can give you valuable data to analyse fixed and variable costs and set sales targets for the business or individual staff members.

Fixed and Variable Costs

Fixed costs

Fixed costs remain the same regardless of how many sales you make. Expenses like rent, equipment lease repayments or full-time staff have to be paid whether you sell any goods or services or not. Fixed costs are often called overheads.

Variable expenses

Variable expenses, (sometimes called production costs), fluctuate based on sales. For example, cost of goods sold, production labour, and commissions paid to salespeople will vary according to the number of goods or services sold.

It's helpful to work out an amount or percentage of variable costs compared to the sale price of your products or service. This may not be exact initially, but even if you get a rough figure to work with, this will help calculate your breakeven point. Over time as you analyse your financial reports, you’ll be able to refine the calculation and adjust your selling price accordingly.

How to Calculate Breakeven

You’ll need to know your fixed costs (overheads), selling price and production costs.

One common method of calculating breakeven is overheads / (selling price – production cost)

For example, let’s say overheads per month (rent, vehicle lease, administration staff) are $20,000, and you sell a coaching program for $3,000 with variable costs (coach fees, handout materials for participants, advertising) of $1,500 per program.

Your calculation would be: $20,000 / ($3,000 - $1,500) = 13.33

You would need to sell over 13 programs per month to break even, which equates to $40,000 worth of sales.

If the same program had variable costs of $1,800, you would need to sell 17 programs per month to generate $50,000 worth of monthly sales just to cover costs. Variable costs of $1,000 per program would mean you only need to sell 10 per month to break even.

With these examples, you can see how important it is to understand your fixed and variable costs. Then you'll know exactly how much you need to make to remain in business and the resulting impact on your financial position.

Once you have a reasonably accurate breakeven figure, you can quickly calculate your profit before tax for sales above the breakeven point. In the example where variable costs are $1,500 per program, let’s say you sell 20 programs each month. This would result in an extra $10,000 in profit (before tax) after paying for overheads and variable costs.

Can breakeven help with your pricing?

Understanding your breakeven point can give you some deep insights into your selling prices, helping you understand if they’re realistic.

For example, if your variable costs are high, how much more income will you need to reach breakeven. Is there a fair price for consumers that covers your expenses in a reasonable time frame? Do you need to raise prices to account for fixed and variable costs accurately?

Talk to us about calculating your breakeven point.

There are different ways of calculating your breakeven point to confirm the viability of your business, and the ideal pricing point for driving both sales and profitability.

We'd love to help you understand your business financials in more depth, so you can plan for long-term sustainability, enjoyment and profitability.