Category: Planning & Management

Figuring out how much to charge is one of the biggest challenges small businesses and self-employed professionals must face. Everyone wants to be paid well for their work, but there’s always that nagging fear of losing opportunities and loyal clients if you raise your prices too high. And if your prices are too low, it becomes hard to sustain your business (not to mention pay your own bills).

Choosing a pricing structure is like walking a tightrope, and it can be fear-inducing. I’ve found that many of my clients respond to this fear by playing it too safe with their prices. Rather than charging what they think they deserve, they give in to fear and charge rates they know their clients won’t object to. But there are better, more balanced ways to set prices.

Charging For Value

Start by realizing that it’s not the end of the world if a few people think your prices are too high. If people don’t want to pay the proper amount for the value you offer, let them go to someone cheaper. A good number of these people will soon be back after discovering that the cheaper option is not as good. And those who don’t come back obviously aren’t in your target market. That’s okay-some people are more concerned with price than value.

Next, think about how you’re marketing your business. If you deliver top-quality products or services and want to charge accordingly, does your marketing make this clear? If you are not interested in catering to clients looking for the lowest rates, think about how you can include this in your marketing strategy. It’s all about how you present your work. If you provide value that is worth paying for, make this clear from the very first connection you make with prospective clients.

Pricing Strategies

Deciding how much to charge comes down to a formula. For self-employed professionals, think about how much you need to earn, what it costs you to run your business (including marketing and administration). Don’t forget to account for how much time it takes, on average, for your daily task (you need to be paid for ALL the hours you work). For small businesses, a good approach is to calculate your monthly operating costs and balance this against your average sales. This should give you a clear picture of your ideal per-service or per-unit rate.

These strategies are actually pretty simple, and as long as you know the right questions to ask it doesn’t take much time to figure out how much you should be charging.

Don’t be afraid to charge what your worth. And most of all, remember that making a profit is no crime. You work hard, so charge based on the value you deliver.

One of the classic schools of thought on the subject of leadership holds that leadership – whether in business, politics, or other areas of society – consists of a collection of traits. These traits can be cultivated by anyone who wishes to become a better leader.

To show you just how long this school of thought has been around, I’d like to share a quote with you from Sun Tzu’s The Art of War:

Leadership is a matter of intelligence, trustworthiness, humaneness, courage, and discipline…reliance on intelligence alone results in rebelliousness. Exercise of humaneness alone results in weakness. Fixation on trust results in folly. Dependence on the strength of courage results in violence. Excessive discipline and sternness in command result in cruelty. When one has all five virtues together, each appropriate to its function, then one can be a leader.

The quote is an eloquent statement of what I think of as the trait theories of leadership. Trait theories are an attempt to discover and describe the immutable skills of leadership, and the essential aspects of leadership that all leaders possess.

Interested in this approach? There’s a whole lot of research on the subject (if you’re interested, I’ve included a bibliography at the end of this article). Here’s the upshot, though: after extensive research on people generally considered effective leaders, experts in this field agree that a consistent relationship exists between leadership and the following traits:

1.         Intelligence

2.         Adjustment (ability to adjust to changing circumstances)

3.         Extraversion (as opposed to introversion)

4.         Conscientiousness

5.         Openness to new experiences

6.         General self-efficacy (belief in one’s own competence)

In these traits, many will recognize a “classic” leadership style that many entrepreneurs, public figures and experts aspire to. And yet, there’s a problem with this type of research, which is this: it tells us that leaders have these traits, but it does not explain how these traits contribute to leadership, or why some people with these traits are not leaders.

For this reason, I tend to think of the trait theory of leadership as a “one size fits all” approach. They’re popular because they simplify a complex and elusive concept. However, by focusing on that which is common across all leaders, they necessarily exclude important aspects of leadership that vary from leader to leader and may, in fact, have more significance than those traits that are held in common.

As Stephen J. Zaccaro noted in the January 2007 issue of American Psychologist, trait theories still:

1. Focus on a small set of individual attributes such as Big Five personality traits, neglecting key issues like cognitive abilities, motives, values, social skills, expertise, and problem-solving skills

2. Fail to consider patterns or integrations of multiple attributes

3. Do not distinguish between those leadership attributes that are generally fixed and those that are shaped by, and bound to, the situation at hand

4. Do not consider how fixed character traits account for the diverse range of behaviors that effective leadership calls for

One danger with this kind of simplistic approach to leadership is the conclusion that if you simply develop the necessary traits, your leadership abilities will emerge (in my experience as a coach, this simply isn’t true). Another danger is focusing on these widely agreed-on leadership traits as selection criteria in filling employment positions.

Why?

Because these traits are drawn from a popular definition based on only the most obvious forms of leadership, such as those exhibited by heads-of-state, senior executives in business, and the military. From our perspective, this not only ignores the diversity that exists across different forms of leadership, it devalues forms of leadership that are less obvious and more subtle, but equally as effective.

About the Author:

Lynda-Ross Vega: A partner at Vega Behavioral Consulting, Ltd., Lynda-Ross specializes in helping coaches, coaching clients and entrepreneurs . She is co-creator of Perceptual Style Theory, a revolutionary psychological assessment system that teaches people how to unleash their deepest potentials for success. For free information on how to succeed as an entrepreneur or coach, create a thriving business and build your bottom line doing more of what you love, visit www.YourTalentAdvantage.com

 

 

Google the word “leadership” and the search will return 360 million results. This staggeringly large number points out one “truism” about leadership – it is a topic about which much has been said and written.

A brief survey of even the first page of Web results will reveal that there are nearly as many opinions on the subject of leadership as there are people talking about it. One of the things about leadership that I often strikes me in the 30 years that I have focused on the topic is that, despite the fact that so much has been said for so long on leadership (one of the earliest writers on leadership was Plato who lived between 424 to 348 B.C.!), there seems to be no one commonly accepted definition of what leadership actually is.

And yet, clearly, leadership is important to us. As humans, we seek out leadership, “know it when we see it”, and rely on it to thrive and succeed in so many settings, be it in work, school, or civil society in general.

While there is no one accepted definition, detailed behavioral description, or methodology to discover and train leaders, it’s worth understanding the general schools of thought on what leadership is and how it works.

The full scope and range of leadership theories can’t be summarized without some degree of simplification and exclusion, but my historical research (and personal views – more on this later) on the subject of leadership lend itself to four broad categories:

1. Trait theories – leadership is based on a cluster of individual  attributes or traits

2. Style theories – there are multiple ways to lead and each approach consists of a group of behaviors that define the style

3. Situational theories – based on the idea that effective leadership is completely based on context, and that no single optimal psychological profile of a leader exists

4. Contingency theories – based on an amalgam of the three previous theories, contingency theories propose that effective leaders should and do adopt different styles depending upon the situation

Nearly three decades ago, during my days as a corporate executive, I probably fell into the first camp, believing that leadership was simply a collection of certain traits that certain people had and other people didn’t. But over the years, my views on the subject have changed.

In working with executives, entrepreneurs, coaches, and teams of all types, my business partner Gary Jordan and I have found each of these approaches to be incomplete when viewed as “the answer” to leadership. That’s why it’s so important to explore each of these theories, in addition to an approach to the subject that has proven most useful to us in helping people develop their natural leadership skills.

But first, you can gain a lot of insight into the subject just by asking yourself a few questions, based on the truth of your own experiences:

Is leadership inborn? (Do certain people have it, and others don’t?) Can leadership be learned? Can different types of people be leaders in different ways?

Do certain situations make leaders out of anyone? And do different situations call for different types of leadership skills?

Assess your answers to those questions, and then we will begin exploring the theories.

About the Author: 

Lynda-Ross Vega: A partner at Vega Behavioral Consulting, Ltd., Lynda-Ross specializes in helping coaches, coaching clients and entrepreneurs . She is co-creator of Perceptual Style Theory, a revolutionary psychological assessment system that teaches people how to unleash their deepest potentials for success. For free information on how to succeed as an entrepreneur or coach, create a thriving business and build your bottom line doing more of what you love, visit www.YourTalentAdvantage.com

If you own a start-up or small business, you’ll have a lot on your mind.  Your income depends on the quality and quantity of your work, your marketing strategies and even the state of the economy, because you rely on people being able to afford your services or products.

But one thing you don’t need to lose sleep over is what would happen if you were sued by a client for personal injury or financial loss, or have your business premises and equipment destroyed, damaged or stolen.  Those risks can be easily insured against, as would any related legal fees.

But if you’re a start-up or small business, you might feel that you can’t afford all of the different types of business insurance that you could possibly ever claim against.  After all, no-one has a crystal ball and it can be hard to know what policies you’ll actually need and what policies you’d just be paying for without ever having to claim under.

If you can only buy one or two types of policy (particularly in the early months) then choose those that you are most likely to need.  Generally speaking, those tend to be employers’ liability insurance (a legal requirement if you have anyone working for you) and public liability insurance.  If you offer professional services or advice, then you would also need professional indemnity insurance.

Employers’ liability insurance would protect you if an employee were injured at work.  It would pay for the compensation and any legal fees (yours and your employee’s).

Public liability insurance would pay for any compensation and legal fees if a member of the public (e.g. a customer, repairman, visitor, person on the street) was injured or suffered financial loss as a result of your negligence.  Those sorts of claims happen more often than you might think, but after all, there are plenty of claims handlers and solicitors who can be relied upon to inform the public that ‘where there’s blame, there’s a claim’ and that they can sue with ease since they can do so on a no win, no fee basis.

Having insurance in place means that you wouldn’t have to worry if you received a solicitors’ letter through your door advising you that their client intended to sue.   Of course, if you take all of the necessary precautions and undertake all the necessary training you should manage to avoid having to rely on your insurance, but accidents happen and people usually want to blame someone so that they can try to claim compensation.  But if you don’t have to claim then at least you will be able to build up some no-claims bonus that will reduce your future years’ premiums.  Then you might want to cover other risks with insurance such as business property cover as your business grows.

Contributed by Katleen Richardson

As an entrepreneur, just like anyone else, you only have 24 hours in a day. This means that in order to get the most bang for your marketing buck, you need to have some idea of where you’re headed. It’s shocking how many startups and small businesses work on the assumption that more marketing of any kind will automatically be better, and they just use a time-consuming (and often expensive) shotgun approach to marketing, focusing on quantity rather than quality.

Aside from the fact that you just don’t have time to keep up that sort of everything-all-the-time marketing, it may not even be the best thing for your business. Have you ever unsubscribed from a company’s social media accounts simply because you kept hearing the same message several times over on every account, and it was too much like spam? Sending basically the same information out over many different channels is not good marketing – it’s just annoying, and it will result in a lot of wasted time and effort on your part.

It’s not just social media marketing that suffers from lack of planning, though. Any marketing you do without a plan can potentially end up being a waste of your time and resources. Are you aware of exactly what demographic your ads are reaching, or did you just go for the ad space that seemed to be the best value in terms of keeping initial costs down, allowing you to place more ads in more places?

If you feel like your marketing strategy is less of a marathon and more of a wild sprint in all directions, it may be time to take a step back and reassess. If you have yet to launch your business and are still in the organizational stages, then you can get started the right way before falling into the “more is more” trap.
Proper planning before you begin is essential if you, like most business owners, have limited time and resources at your disposal. Understanding who your audience is – and, more importantly, where they hang out – can be the key factor in having a successful marketing campaign. Your efforts would be better spent on narrowing your focus in the correct direction and then sending your message out in that direction, rather than just trying a lot of things at once and hoping for the best, or trying things one at a time in a random way.

Does this mean that you need to hire a marketing professional to help you? While that’s not strictly necessary in all cases, it may be worthwhile to spend at least some of your marketing budget making sure you get some sound advice. A lot depends on how much knowledge you have about how online marketing works, but either way, you’d be better off spending a small percentage of your available funds making sure things get planned correctly, than a much larger percentage randomly purchasing ad space that may not perform up to your expectations.

About the Author:

Katleen Richardson (http://www.marketing-advantedge.com) is an experienced leader who builds integrated strategies combining research, data analysis and creative thinking. She has delivered successful solutions for the publishing, financial and telecommunications industries, as well as for conference and training companies, and professional associations. Her approach is to design customer focused, cost-effective solutions based on cross functional collaboration and results-based metrics.