INSIGHT business coaching
It’s Time to Stop Undercharging Two methods to ensure you and your clients value your worth by LuAnn Nigara
Are you working hard every day, month after month, and your checkbook does not reflect the long days you dedicate to your business? If this sounds like you, pull up a chair. There are several things that need to be examined to correct this including, among other things, your business systems, your productivity (where and how you truly spend your time), your expenses, and your gross profit margins. All of these categories need to be assessed and addressed, however, today we are going to tackle your gross profit margins. Consistent undercharging is a huge factor in not having healthy gross profit margins. Make no mistake about it, healthy profit margins are critical to running profitably. In order to pay yourself and your team what you are worth you must be profitable. The Necessary Margin This issue is particularly rampant in the window treatment industry. In conversations at nearly every industry event and in conversations on- and off-air with podcast guests, I am often surprised at the beliefs that business owners hold when it comes to gross profit margins. You can and should be earning 50- to 58 percent gross margins for almost everything you sell. And, I know from countless conversations over the last 30+ years, dozens of you reading this just said out loud, to an empty room, “She is nuts.” But I’m not. Because this is our average gross profit margin at Window Works—since 1982. No exaggeration. This consistent level of gross profit margin is not only possible, it is necessary in order to maintain a healthy business. 14 | wf-vision.com | Jan + Feb 2018
Let Go of Self-Imposed Limitations In order to be able to set and achieve healthy gross profit margins, one of the first things to do is to analyze any limiting mindset beliefs that might be holding us hostage. Limiting beliefs play like a bad record in our mind, creating doubt and fear. This could including the following: • Why would anyone buy from me? • “Money doesn’t grow on trees.” • I need to make this sale to cover payroll, or the rent, etc. • What I do isn’t particularly skillful or valuable. • Do I deserve success? What we believe about ourselves, our clients, and our business becomes the truth simply because what we believe, in large part, will actually dictate how we act. When we believe we are deserving and capable of success and when we believe what we offer is valued by our clients, we instinctively behave in ways that support these beliefs. These positive actions ultimately create and perpetuate successful outcomes. For example, a confident salesperson is eager to go to each appointment, always grateful for the next opportunity to earn a new client. A business owner that really knows the value she brings to her customers looks for new ways to market her company, to make sure everyone she meets knows about her company, her team, and her services. However, the opposite is also true. When we doubt ourselves, we hesitate. When we aren’t sure of our expertise, we procrastinate. When we don’t value our worth, we undercharge. Then, the limiting beliefs trickle down to other areas, too. We delay in setting up our
website, we spin our wheels in executing marketing initiatives, and we tell ourselves there is nothing we can do to change things. We blame it on the economy, our region, our location, changes in the industry, etc. So how do we hit the erase button and create new, affirming beliefs that invite success and prosperity to our business and our lives? Work the Big Picture and the Little Picture Together Examine both a macro view and a micro view of your industry. Then go about becoming an expert on both. In becoming an expert you will gain confidence and you will easily begin to understand how you are truly valuable to your clients. Example of the macro view: As a window coverings specialist, your goal could be to learn every product with a better-than-average proficiency. Shutters, draperies, the various styles of soft shades, the various brands and styles of woven shades, hard wire and battery motorization, the list goes on. To be sure it happens, plan it out over a year. Assign a product category to each month and block three hours per week in each month to that category. Read industry magazines and websites, read vendor websites, take webinars, take classes, attend industry shows and conventions, go to regional industry meetings, watch YouTube videos—whatever it takes to know that product category inside and out. By the end of the year you will have acquired expert status in 12 product categories. By increasing your competence month after month, you will feel your confidence in yourself and your company grow.
