Just like a landlord raises rent to increase revenue and leave room for vacancy.
You should raise prices for services you sell and leave room for excess capacity.
Operating at capacity is an opportunity cost for ALL of us, and it can ruin a business too👇
Opportunity Cost = (returns on best Forgone Option) - (returns on Chosen Option)
Assume you can't take anymore customers, unless you hire more employees.
You're at capacity.
The problem isn't lack of employees, it's you over extending your current capacity.
This is bad.
You're trying to maximize capacity, and likely decrease expenses as a means of growth.
Your employee's don't find solutions, or revenue opportunities because they're worried about getting work done, and they don't feel fairly compensated.
Your employees also very likely hate working for you and your customers now.
Your customer's or employee's might not even want to refer a client to your business.
Your customers probably complain.
Why?👇
You're at capacity.
Your business is now a K-Mart offering a "Blue Light Special"
Everyone on the block knows you go above and beyond what they're paying for.
You have given your business, and your employees the same respect as a commodity
Every interaction is a "Transaction"
You're treating them both as though they are replaceable.
Your staff starts treating your client's that way too.
Turns out, most people don't want to be treated as a commodity.
Because people, are, not, commodities.
At this point, your business is getting the respect you've given it.
If you're at this point, or fear getting to it read on👇
Opportunity Cost = (returns on best Forgone Option) - (returns on Chosen Option)
Your Chosen Option, operating this way, will always be fixed to your capacity, and how low you can pay your employees.
Your Forgone Option? It's massive. 👇
Your staff as humans want to do good work.
Let's be honest, If they didn't, you already would have fired them by now, and re-hired.
Plus If they didn't care about your client's and maybe you, they would have left by now.
You've got good people working for you!
So use them to your advantage, and stop treating them like interchangeable goods that can simply be re-hired!
They then won't treat your business and clients, as an interchangeable job.
How?
Create excess capacity for all of your staff, budget for "Admin" time.
Admin time for your staff, is more valuable than their billable time.
Why? 👇
Admin time can be used for brainstorming new revenue opportunities, with existing clients.
Admin time can be used to research/teach/train staff on a new business service offering.
Admin time can be used to fix internal issues regarding efficient operations.
Most importantly?👇
Admin time, allows your staff to expand their professional knowledge, and network with other staff to grow their skillset or explore other service lines.
Admin time also allows your staff time to sale services!
Your business will become more pleasant to work for, and work with.
This amounts to a Forgone Option that results in an ROI of not only revenue, but staff and client retention & gains.
You're creating sticky staff, and customers by allowing relationships to form, NOT transactions.
The best part? Client's will gladly "pay" for admin time. Why?👇
Because people do not like being treated as commodities.
They want you to look out for them, find solutions they didn't know existed and use your professional knowledge to help them.
Instead of being the K-Mart, you're now a well-trained Tailor to your clients, the perfect fit.
@JStaatsCPA has a thread, that will make the math of rising prices make sense and take any fear away.
In conjunction with this thread I hope many of you realize the only way for your business to generate the income it needs to service your clients well is to charge the maximum the market will allow.
Don't be the K-Mart. Especially you #Taxtwitter!
Give me a follow @JTheAccountant or @ConsultCorridor for more useful threads like this.
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