Medusa

Business Advice – Don’t be Small-Minded about Money

Think big. Remember that you will probably have to type all your own invoices and do your own VAT return, so don’t waste time with bits and pieces that don’t get you anywhere. When quoting and invoicing, stick to units of hundreds or thousands of pounds. It is difficult to generalize here, but the basic rule is not to mess about with small fractions that do not really add to your profit. Keep it simple and round the figures up or down (preferably up) in order to get the job done quickly and efficiently. In some instances you may lose a little on price, and in others you may gain a little, but you will save hours of fiddling about with pounds and pence or dollars and cents.

This is an extension of the ‘successful people buy in bulk’ principle, and applies to anyone who works on their own. Successful business people buy in bulk so that they don’t have to waste time perpetually buying individual small units of a given item. This applies to pretty much everything: paper, paper clips, printer cartridges, stamps, envelopes – that rather irritating list of stuff which has to be done but doesn’t really seem to have a bearing on anything. Time-wasters (who are never successful working on their own) repeat the process mindlessly again and again, usually failing to notice that the time spent on constantly doing this is detracting from their ability to do much more rewarding and profitable things. Put another way: have you heard the one about the person who never got anything done because they kept writing out lists of ‘Things to do’?

Expenses are a case in point. No matter what your business, do not be petty about expenses. If at all possible, you should never charge them to the customer. If appropriate, build a suitable margin into your prices to allow for any extra services that you would normally wish to provide them. In a service business, be generous and broad-minded. Buy the client lunch, and pay for your own travel. Simply get on with it in a way that befits a well-paid successful person.

Here is just one example. If you find yourself producing estimates for jobs that go into tiny detail and try to justify your every movement, you have probably either got the wrong pricing or the wrong type of customer. What a lot of people who work for themselves forget is that discussing the trivia takes as much time as talking about the important things. It therefore costs just as much money, but as a proportion of the value of the lower priced job, the time spent will probably not be viable. Therefore, be very careful not to become dragged into the mire of discussing tiny financial details whilst all the time you are missing the main point. If a customer becomes too uptight about a job and will not agree what you deem to be a fair and honest price for a job well done, walk away from the job. You are better than that.

Furthermore, don’t forget that your accountant can make allowances for all sorts of things, and tidy up all the details at the end of the year. That’s what you pay them for.

Mark is an operational head and writes business books. His entrepreneurship books has claimed fame from big names like William Lauder.