As business owners we wear a lot of hats and some of them we tend to keep on the hat rack more than others.
If you are like most of your peers your financial hat is one that does not get much wear. It’s tough to compete with the operational hat as finances are not fun and definitely not cute and fluffly.
If you are happy with the size of your current paycheck then you get a pass for now on wearing your financial hat. However, if you want to increase the size of your paycheck then you must spend more time in your financial hat.
No one else cares as much about the financial results of your business than you!
You are the one in control of the size of your paycheck. The first step to making a positive change is to get to know your numbers. Start slow and commit to spending one additional hour each week in your financial hat.
How do you decide what numbers to look at? Start with your revenues from last month and answer the following questions:
- How much income did you get from each service?
- How many pets did you care for in each service?
- What was your revenue per pet in each service? (Divide total income by number of pets served)
- How does your revenue per pet compare to your full rate price charged for each service?
Many business owners are very surprised by the amount of difference between their calculated revenue per pet and their published rates. This is an important number to know in your business as it lets you know how much the discounts you offer clients impacted your profits.
Let’s say your rate for dog daycare is $25 per day, but you offer discounts for multiple pets and multi-day package purchases. Your calculated revenue per pet could be $21 so on average you gave $4 in discounts per dog.
That may not sound like much, but let’s look at it from a different perspective. How would you feel if you could increase the size of your paycheck by $1,200 per month?
By knowing your numbers you can make that happen easily. All you have to do is increase your revenue per dog by $2 (i.e., based on an average of 30 dogs per day in daycare five days per week).
You can raise your rate by $1 per dog and reduce the percentage of your discounts to get the other $1. The majority of your clients are not going to mind a dollar per visit increase. How would your life change with a $12,000 per year raise?
You may not be convinced that wearing your financial hat will be fun, but hopefully you do see how knowing your numbers can increase your paycheck. Next week spend the time you wear your financial hat with one of the tools from our Top Five Know Your Numbers & Make More Money listing.
Let us know as you find more ways to increase your pay.