Part I Questions 1-3

1 Question – Answer NO

If your answer to question 1 is no, then you don’t have to answer the next 3 questions.
Unfortunately, I can already tell you that your business is in serious trouble. The truth is that the business should allow you to thrive from the first 2 or 3 months of running it. If you run your business for more than 3 to 6 months and you cannot pay yourself a salary that could cover your bills then there is a problem with the price of your product/service, the sales volume and even with the way your product/service is created.

While watching 4 videos that I have for you, pay special attention to the first and second one. The second video will show you what you need to do to break the vicious circle of struggling in your company.

1 Question – Answer Yes  2 Question – Answer No

If your answer to the first question is yes but to the second is no, then your business does not allow you to THRIVE! My motto is that the business should allow me to thrive, not just survive; or it should offer me a life I could have in a full time job.

So if you are not thriving, your prices are too low. If I were you, I would adjust the prices, taking into account all your costs, the sales volume you can easily reach, the appropriate client segment and the marketing system so it targets the right people. Your numbers can change your business strategy completely – but why stay with the business strategy that allows you only to survive and does not allow you to enjoy your life and maybe even help others on a bigger scale!

If you want to know more in detail what you need to do – please pay attention to my third video, as it is specifically for you!

3 Question – Answer Yes

Ok – that is BAD – come back immediately to the first and the second video because the concept of paying yourself the money you need or want from the profit is wrong. If you work in your business you are its employee – the most important and the most precious one – but still an employee and the money for you is called salary. And the employee’s salary is a company cost from the management accounting perspective. That means that when calculating the break-even point, you treat your salary as a cost and while calculating the price it should be covered by the cost unit of your products.

When you pay yourself the money out of the profit, it means that you are a true business owner that has his own CEO, CFO and the whole Board of Directors and your role is to read quarterly financial statement and expect results from your team 😀

Part II Questions 4-8

Question 4 – Answer YES

Maybe you are in this 0.01% of lucky entrepreneurs whose self-esteem is high enough to charge a lot for their products and services, you are able to cover all the costs, pay yourself the money you want and even generate additional profit! 🙂

But if this is not the case, then you are on your way to finding yourself in the worst situation you can imagine (one in which my clients found themselves before they came to me). You may have high sales volume but will create loss on each product or service sold. That is because the price does not cover even the basic costs. You have money in your bank account but you have to constantly choose between paying the invoices, yourself or investing in the company. This juggling can be exhausting and frustrating and will eventually lead to closing down the business.

So watch the first and second video first as they are the most important for you now.

Questions 5, 6, 7, 8

If you answered NO to even one of those questions, the probability of having wrong prices is really high. What is more, you have no control or awareness if you actually make money or create loss when offering promotions, or collaborate with business partners (JV partners). You don’t know what the exact cost unit of your product is and how high the margin is. It may be right, it may be wrong. Sometimes you make money, sometimes you generate losses because you sell below costs but you are not aware of that. What is more, you might not even be able to cover your own salary.

Watch video 1 and 2 to discover what you need to do to fix it and why it is so important.

Part III Questions 9-10

If you answered NO to at least one of the questions from part III, you need to pay special attention to video number 4.

In this video, you will find out why it is impossible to calculate the margin of your products and services properly without knowing the level of profit you want to make and you will discover one of the approaches of calculating the minimum level of profit that you need to generate.

This video will also show you:
– how calculating the Break-Even Point can quickly let you know if your prices are too low and how to calculate them properly.
– why recalculating BEP at least twice per year is so important to your business.