“Charge what you’re worth”
is a popular phrase in the entrepreneurial world that has caught a lot of buzz. But with imposter syndrome, where a lot of us don’t see the full value that we offer and don’t ever quite feel “good enough”, charging what we think we’re worth will not actually help us as business owners.
In reality, it’ll drive us into the ground and leave us with little productivity and actual value to offer to our customers once the burnout hits. Instead, we can take a logical “mathsing” approach to business, otherwise known as “profit-first”. Focusing on gross proceeds from our products or services and factoring in our expenses (YES including our time!) will not only ensure that we’re charging enough to make a living off our business, but it will also open up mental bandwidth to become more creative in profit streams, including how to scale our offerings, creating passive income, and fitting in building a team to expand your operation.
If you are new to this blog, you’ll soon learn that “mathsing” is one of my favourite made-up words. I define “mathsing” as something horse business owners don’t do enough of and it keeps costing us time and money! I know that’s not a very good example. Here is an example of “mathsing” and Google ads. Just imagine you are spending $500 per month on Google ads that are generating $1000 in sales every month.
Now, imagine you did the math and figured out that you actually spent $550 buying or making those products. So, you’ve got $1000 in sales minus $500 in Google ads which leaves you with $500 leftover. EXCEPT, you didn’t include the cost of making or buying those products. Now, take the $500 you have leftover minus $550 for the cost of the goods, and, yikes, you lost $50! Why would you do that? The ultimate lesson here is it can feel like you are making tons of sales, but when you actually work out the maths, it isn’t all rainbows and unicorns! As I keep saying…..DO THE MATHS!
After that example, you are probably wondering why so many horse business owners don’t or don’t want to look at the numbers.
Yes, I’m talking to you. You, over there, throwing the receipts in a shoebox to hand to your accountant.
Yes, you, over there, judging the success of your business by your bank balance.
For anyone that does not run the maths, let’s figure out why….
How do you know if your prices are covering your costs and your time? Rewind back to our Google Ads example….
How are you going to cover business bills if you don’t know how much you are making?
How are you going to grow your business?
Ok, now I know you are all jumping out of your comfy seat on the couch (no judging) to go do some mathsing for your business. Perfect, go do it! It is not something you should leave for another day. It’s super important and will impact your business immediately! Trust me!
Products are a whole other pricing nightmare for horse business owners. I’m shocked, literally shocked, by how many people make beautiful equestrian “things” and have no idea how much it costs them to make each item….or the time involved. Aside from not knowing your cost, it is super scary trying to come up with a price you think people will pay out of seemingly thin air.
Remember, though, we aren’t pricing products based on what people will pay! Think about your materials and your time and for the love of…well, to be equal, let’s say horses…..DO THE MATH! Price your products at prices that are sustainable for your business long-term.
If you provide a horse service, remember, it’s fair and reasonable to charge people for your time (or prep time, depending on the service). It is so easy to undervalue your time (impostor syndrome gets to us all), but at some point, you become slave labor in your own business. If your client doesn’t want to pay for your time, they might not be the right client for you. A better option is to value your time and find clients that do as well.