As a business owner, you’ve got to manage your finances with precision. You have to budget, track your expenses, and stick to a plan that gets you paid.
However, there are a few things you want to consider before creating a business budget. And you know what? They’re not what you’d expect.
Before you give me an exasperated sigh — you came here for copy tips, right?? — just know that this is important and connected to your copy. I pinky swear.
First, we’re going to dig into your BUYERS. You know, the people who drive your budget? Then we’re going to talk about building a budget. And then we’re going to talk about the Big Gulp: Raising your prices.
You ready? Let’s dig in.
Why knowing your numbers matters
I’m not really into math but when I started my own business, I realized I was going to have to get nice and cozy with numbers if I wanted to keep things moving.
I wanted to set my business off on the right financial footing so I could focus on what mattered: My clients and my writing. And for me, I realized I couldn’t do that if I was constantly pinching pennies or being unaware of my cash.
I cannot emphasize enough how important it is to be a steward for your business revenue. You’ve got to be in the know with your finances as much as you are with your products or services if you want to make sure you’re bringing home the bacon.
But I don’t just mean setting a budget and calling it a day. Before you do that, there’s some research and critical thinking that needs to happen first.
How you make money matters
When we think of budgets, we usually start with how much we make, right?? Before you start brainstorming how your website, social media, or anything else you create is going to help make you money, though, you’ve got to start at Square One.
How are you making money? Your clients or customers, right?
Before you can figure out how much you’ll make from your clients or customers, you gotta dig into the motivating factors — the why behind your clients’ buying behaviors.
There are four big buying patterns/styles that we see in business. And no, I didn’t just pull these out of my booty. They’re well-researched concepts based on the Herrmann Brain Dominance Instrument.
When you know your audience’s type, you’ll be better able to market to them with your copy AND you’ll be better able to plan for revenue — because you know you can sell to folks (aka drive revenue into your business).
P.S. — If you want to figure out which one you are, and how you can work with ALL buying styles, take my free quiz here!
These buyers like to cut to the chase. They’re making money decisions based on logic, facts, and quantitative reasoning. They love evidence and analysis. They’re the type to say “Show me the money!” — aka the ROI or costs.
Common characteristics of the analyst include:
- Being a BIG fan of numbers
- They tend to get a liiiiittle competitive
- They’re naturally critical (but they’ll tell you that they’re just a realist)
- Before they do anything, they quantify information
- They’re logical thinkers at heart
- They’re allergic to fluff — get to the point!!
And the best way to communicate with them is with:
- Tables and grids of information
- Price anchoring
- The “Starbucks Test” (how much can you save by skipping your weekly coffee and how can it be used towards resources you need in your business?)
The biggest takeaway from this buyer style is that they always want to see the money. They want to know exactly how it’s being spent. If you can show them that the investment will be worthwhile, you’ve won them over.
Hoo boy, does this type like a to-do list. I should know — this is what I get every single time I take my quiz and I do love me a color-coded list.
This type is very methodical and a naturally detailed, sequential thinker who isn’t too keen on taking a risk without thinking about it first (extensively I might add). They want the step-by-step plan.
You can recognize the planner by these common behavior patterns:
- You’ll always see them with a to-do list in hand…or five
- They’re pretty methodical and like to think through their decisions through before acting
- Naturally detailed and great organizers
- Enjoy synthesizing information
- Allergic to risk and disorder
This type is always looking to see if you have a step-by-step plan and timeline because they have specific goals in mind that they’re eager to get to them.
You can communicate with the planner best by:
- Having well-branded guarantees listed clearly on your sales pages
- Testimonials and social proof that you’re going to hold up your end of the bargain
- Remembering that this type is risk-averse, so do what you can to reassure them that they can trust you with successful results
The whimsical visionary
Many creatives and entrepreneurs tend to be whimsical visionaries. I mean, it just makes sense, doesn’t it? This type is conceptual and imaginative. They’re future-focused and always have a dream in mind. They’re not always the best about the details and the in-between. They want to focus on the overall goal and move on to the next big thing.
The whimsical visionary buyer characteristics include:
- They like surprises and love spontaneity
- They’re natural risk-takers and don’t mind getting their hands dirty to make it happen
- They prefer to visualize information rather than looking at tables and numbers
- They’re allergic to inflexibility
- They want to see the big picture, not the fine details
The key to communicating with this buyer persona is offering them ways to stay grounded while still playing into their imaginative personality.
You can communicate with the whimsical visionary best by:
- Using copy with visual elements
- Include brand photography, icons, images, illustrations, diagrams, or infographics to break up info and make it easier to digest
- Use future pacing — show them what they can expect in the next five minutes, the next five weeks, the next five months, etc.
These are the passionate decision-makers when it comes to spending money. They love emotion and are super humanistic. They’re the type that’s likely to respond better to emotion than logical analysis. They love a good story that tugs on their heartstrings.
The charmer tends to be:
- Unafraid of emotions — they embrace them with open arms!
- Humanistic and natural empaths
- Expressive, especially when it comes to them as listeners and coaches
- Master storytellers
- Allergic to hidden agendas
- Concerned with understanding the shared values in a working relationship
This buyer wants to know if you have anything in common and how your work has helped people on a deeper level.
Ways you can incorporate the charmer that into your copy include:
- Case studies that highlight specific ways you’ve helped your client or customers
- Testimonials that paint a picture of before and after
- Personal anecdotes about your personality, family, interests, etc.
- Sales videos or brand trailers to reinforce your brand values and personality, and that highlight what you could have in common with them
Overall, this type wants to feel like they have a part in the overall story you’re telling. Ask yourself, how can I draw them into my business and make them want to be a part of the bigger picture?
OK now that you have a better idea of WHO you’re selling to and how that can drive your budget, let’s talk about the nitty-gritty of HOW to make a budget.
Create a business budget
Trust me on this one — you don’t want to go into business without a framework for your finances.
I didn’t pay myself regularly for the first 11 months of my business. I was worried about success disappearing overnight, so I just focused on selling. I never thought about the business operations and financial side of things, and I hoarded anything I made.
I could have avoided that first year of constant financial stress if I would have just taken the time to budget accordingly.
I’m no financial expert, but here are a few simple things I do in my business to make math much easier on this creative brain of mine.
- Figure out your “enough” number aka the minimum number you need to make to pay your salary.
- Find out how much it costs to keep the lights on in your business and include these major categories when crunching that number:
- Office expenses
- Business savings
- Business travel
- Marketing and advertising expenses
- Professional services like legal help or accounting help
- Employee/contractor expenses
- Set your prices based on what you need to make, industry standards, and supply/demand.
Also keep your buyers in mind. If you KNOW they are analysts, you might have a longer purchase cycle — they’re going to take a lot of “wooing” to hand over their wallets. If you have a a charmer audience, you might see that there’s less time to buy but more maintenance needed once you’ve got them on your client roster.
All of this influences how you budget and price your offers!
Consider your prices
Creating a budget means knowing how much you have coming in. That means knowing how much you charge. And that means thinking critically about whether or not your rates are going to help you reach your goals.
When I say “Raise your rates,” does your heart rate raise instead? Okay, don’t panic. Raising your prices isn’t as scary as you think.
Your clients and customers aren’t going to be as adverse to this as you think they are. Whether you’re a service-based or product-based business, you have the green light (IMO) to raise your prices if…
It happens, and it’s definitely happening now. The price of literally everything is going up, so if you aren’t raising your prices, you’re going to be making less than what you think you are. The cost of doing business is increasing, therefore you need to raise your prices.
Your booking and conversion rate is at least 80%
This is on the higher end of what many business coaches say, but because I’m a planner, I like to overcompensate on things like this. If you have leads coming in and you convert about 80% or more… it’s time to raise those rates.
Your hard cost doesn’t equal 40% of the cost of your product or service.
Do you have VAs? Contractors? Software and tools? Mastermind memberships? Internet and phone feeds? All of those are hard costs — things that you can’t NOT pay if you want to keep this show on the road.
If you’re paying MORE than 40% of your product or service pricing to those costs, it’s time to raise your rates.
It’s been a while since you’ve raised your prices
I recommend waiting a year to a year and a half to raise rates after the last time you raise your rates, unless inflation is really eating into your revenue OR you have added a new service/offer that extends the value.
You’re at the lower end of pricing with your competitors.
Look around. Are you the one charging the least (and converting the most)? It’s time to raise your rates. Look at competitors but also consider how much you need to make and how much difference that would be for current customers or clients.
You’re ready to show the value in your new rates.
When you raise your rates, decide on the price and stick to it. Be able to argue for them well. You don’t want to just up your prices and leave your clients with zero context.
Make sure you can also articulate why you’re raising your prices and what’s in it for your customers or clients. Show them the benefit, i.e. how they’re going to get better results or a better product through it.
And when you do increase your prices, revisit your sales funnel, back to front, beginning to end, to make sure you make the necessary updates.
Want other tips on managing your business?
I know that the financial element of being a business owner is probably the most intimidating. If you’re in a creative field like me, it might even feel a bit like pulling teeth. But we can do this together, my friend.
Follow me on YouTube if you want to hear more about what it’s like to run a business as a creative entrepreneur and busy mama. I’ve got a whole bunch of creative entrepreneur business tips on this playlist over on YouTube. Go check it out!
Reading Time: 8 Minutes Reading time: 9 min. As a business owner, you’ve got to manage your finances with precision. You have to budget, track your expenses, and stick to a plan that gets you paid. However, there are a few things you want to consider before creating a business budget. And you know what? They’re not what you’d […]