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Earning less than six figures in revenue? Why I'm telling you that managing your finances is NOT your biggest priority right now

Earning less than six figures in revenue? Why I'm telling you that managing your finances is NOT your biggest priority right now

April 28, 2024
Deborah Edwards

As a small business owner, particularly one whose annual income hasn’t yet hit the six-figure mark, you face a plethora of challenges and decisions every day. That, on top of keeping on top of the finances is quite a baptism of fire.

As an accountant & business coach, you might be surprised to learn however that I'm not going to tell you to prioritise your financial management.

Instead, I'm going to tell you to focus on selling.


Because right now, you need to focus on building a steady, reliable stream of income. You need to make sure that you know and service your market really, really well and most importantly, that they know, like and trust you. Getting this right in the early days will make the journey ahead much plainer sailing.

Low or High Price?

One of the most critical decisions involves determining the best sales strategy: should you focus on selling high volume, low ticket items, or low volume, higher ticket items? It's tempting to think that you'll attract customers and grow your business by selling low and quickly but this is likely to be an expensive mistake. While both strategies have their merits, when resources are scarce (which is nearly always the case for the small business), the latter option often emerges as the more viable strategy.

Here’s why.

Quality Over Quantity

When you’re operating with limited resources, every minute and every pound counts. Selling low volume, higher ticket items allows you to maximize your resources. Instead of spreading yourself thin over numerous transactions, you can concentrate on fewer, more profitable sales. This approach not only reduces overheads but also allows you to allocate more time and attention to each customer, which can significantly enhance the quality of service and customer satisfaction.

Pricing and Service Levels

Getting your pricing right is crucial. It’s not just about charging more — it’s about justifying that price with superior service and value. Customers who pay premium prices expect premium service, and when you deliver on that expectation, you build a strong reputation in the market. This reputation for quality can become one of your most powerful marketing tools, as satisfied high-ticket clients are often happy to provide testimonials and referrals.

Focus on Building Relationships

High-ticket items typically come with longer sales cycles and more personalized interactions. This is an opportunity to build strong relationships with your clients. When clients trust you, they return to you, and they bring others with them. In the long run, these relationships not only sustain your business but also enable it to thrive.

So. What should you be doing?

Implement a Minimal Financial Support System

Put simply, make sure you have the following and you'll fly:

  • Use xero * to record your transactions & hook up your bank account to reduce the volume of data
  • Create a habit of regular financial recording OR get someone else to do it & check in regularly. The software will calculate the profit. Don't leave it until the last minute.
  • Have the support of a great accountant to do the thinking for you

Approaching Six Figures?

But here’s the kicker: as you start approaching the six-figure income threshold and hitting the VAT registration limit, the stakes change. You need to storm right through these financial milestones to maintain profitability or else you'll be going backwards. At this point, it becomes imperative NOT to ignore your finances any longer. You need to be more strategic and consistent with your financial strategy to avoid becoming the "busy fool" — someone who works long hours without proportional financial gains.

The Good News and Solutions

The good news is that transitioning from a small-scale operation to a larger, more financially robust business is entirely feasible with the right strategies, tools & support. Implementing robust financial management practices, leveraging accounting software to track and analyse your finances. If this is new to you then a coach can help you navigate this transition smoothly, providing the insights and oversight you need to optimise your pricing strategies, manage your cash flow effectively, and ensure optimised tax strategies.

Remember, the goal isn’t just to work harder; it’s to work smarter. By refining your sales strategy now, your business can not only survive but thrive in the competitive market landscape. Stay focused on creating value and maintaining strong customer relationships, and watch as your business reaches new heights.

If you find yourself approaching that magical milestone and want financial success without the guesswork, then why not book in for a call with me to find out how I can help you

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