From 18% profit to 60% profit in less than 12 months
It didn’t take long for me to see the “regular chaos” wasn’t something that was going away any time soon. To be honest, I didn’t know how she’d survived it this long. An inbox exploding with questions (read: expectations) she just couldn’t keep up with. Potential business being lost because there just wasn’t enough time to get that proposal out. Sloppy work, rushed work. Just barely hanging on.
The tasks piled up, and while Amy took them with a smile, it was an exhausted smile.
Three Patterns that had to change
1. 82 % cost on every event
Flowers, oasis, ribbon, labor, travel, rental van… FLOWERS. The cost added up. And like most of you, Amy was not willing to sacrifice the integrity of her design for the sake of the bottom line. So back to the flower wholesaler she’d go.
2. Getting paid from the leftover
Amy had never seen a regular paycheck. She’d get paid from the leftovers. Always making sure her team was taken care of first. She’d make it work. Like we all do somehow…. But not easily. And feeling defeated by the progress she just never could seem to make in her bank account.
3. Saying “yes” to every great opportunity
15% of total sales to be exact. Thousands and Thousands of dollars being used for this photoshoot or that vendor birthday party. Thousands of dollars that Amy just didn’t have. But…. “it was a great opportunity” so what do you do?
Three Steps we took
1. Increased Price
Now hear me say, raising prices isn’t always the solution. And often times isn’t even an option. But in order to maintain Amy’s design quality, the prices had to be raised. There was no way around it. I typically recommend raising prices no more than 10-15% at a time... but you can do it anytime! Every three months, Once a year, tomorrow. If you see they need to go up, don't wait for some magic moment. Get a plan in place to raise them today!
2. Decreased Cost
Again, this may sounds like “duh”… but not so easily done. Amirite?! I showed Amy that ideally she shouldn’t be spending more than 40% of the price her clients paid. Translation : If she charged a client $3500, she shouldn’t be spending more than 40% of that price (= $1400). That includes flowers, labor, special ribbon, travel + materials. Most of the battle in managing costs is simply going in with a spending plan (a budget!) and getting creative on executing an event within those budget constraints.
**Take a look at your last project.... how much of the price your client paid did you spend on materials? How much are your projects really costing you?
3. We gave “great opportunities” a number
A budget that gave her parameters for yes’s/no’s. Instead of saying yes to everything, she evaluated if it really was a great opportunity. If it wasn’t her ideal, she wouldn’t say “no” but she would ask for all her costs to be covered. You see, despite what we may think, they don’t always expect us to just say yes with no questions asked. :)
Three simple (but not easy) steps, that started a revolution in Amy’s business. Thats the thing... It doesn't take having 10k+ instagram followers, the perfect website and a flawless blogging schedule. It doesn't even take unlimited inquiries or $5,000 starting budgets. ALL IT TAKES are a FEW BASICS, (yes basics! fundamentals!) to start seeing extra money in your bank account. To stop feeling like you're drowning. To feel like, for once, you are ahead of the game instead of just barely holding your head above water.