Strategies for Effectively Pricing Your Business Services

Effectively pricing your business services is crucial for profitability and competitiveness. Here are some strategies to consider:

  1. Understand Your Costs: Calculate all costs associated with delivering your services, including materials, labor, overhead, and any other expenses. This forms the foundation for setting your pricing to ensure that you cover your costs and generate a profit.
  2. Research the Market: Investigate what competitors are charging for similar services in your industry and geographic area. This market research helps you understand pricing norms and identify opportunities to differentiate your services based on value rather than just price.
  3. Define Your Value Proposition: Clearly articulate the unique value that your services offer to clients. Focus on the benefits and outcomes clients can expect from working with you, and be prepared to justify your pricing based on the value you provide.
  4. Consider Pricing Models: Explore different pricing models such as hourly rates, project-based pricing, retainer fees, subscription models, or value-based pricing. Choose the model that aligns best with your business model and provides clarity and transparency for both you and your clients.
  5. Factor in Profit Margin: Set your prices to not only cover your costs but also generate a reasonable profit margin. Consider factors such as desired profitability, market demand, and perceived value when determining your pricing strategy.
  6. Offer Tiered Pricing: Provide multiple pricing tiers to accommodate different client needs and budgets. This allows clients to choose the level of service that best fits their requirements while still generating revenue for your business.
  7. Bundle Services: Bundle related services together to create packages that offer added value to clients while maximizing revenue for your business. This can encourage clients to purchase additional services and increase the overall value of each transaction.
  8. Monitor and Adjust Pricing: Continuously monitor the effectiveness of your pricing strategy and be willing to adjust prices as needed based on changes in costs, market conditions, or client feedback. Regularly reviewing and optimizing your pricing ensures that you remain competitive and profitable over time.
  9. Communicate Value Clearly: Clearly communicate the value of your services to potential clients through marketing materials, proposals, and sales conversations. Highlighting the benefits and outcomes clients can expect helps justify your pricing and builds confidence in your offerings.
  10. Provide Excellent Customer Service: Deliver exceptional service and exceed client expectations to justify your pricing and foster long-term relationships. Happy clients are more likely to perceive your services as valuable and be willing to pay your prices.

You can effectively price your business services to maximize profitability, attract clients, and sustain long-term success in your industry. Schedule a call to learn more about how we can help with your business’s financial health.

Five Essential Post-Tax Season Actions for Business Owners

After the tax season wraps up, business owners should take several essential actions to ensure their financial health and plan for the future. Here are five key steps:

  1. Review Financial Performance: Take a close look at your business’s financial performance during the tax year. Analyze income, expenses, profits, and cash flow to identify areas of strength and areas needing improvement.
  2. Update Financial Records: Ensure that all financial records are accurate and up to date. Maintaining accurate financial records is crucial for tax compliance, budgeting, and making strategic business decisions.
  3. Evaluate Tax Strategies: Reflect on the tax strategies implemented during the previous year and assess their effectiveness. Consider consulting with a tax professional to explore potential tax-saving opportunities for the upcoming year. Adjusting your tax strategy based on changing circumstances can help minimize tax liability and maximize savings.
  4. Set Financial Goals: Define clear financial goals for the upcoming year and create a plan to achieve them. Whether it’s increasing revenue, reducing expenses, expanding into new markets, or improving profitability, setting specific, measurable, achievable, relevant, and time-bound (SMART) goals will provide direction and motivation for your business.
  5. Plan for the Future: Take the time to develop a comprehensive business plan that outlines your objectives, strategies, and action steps for the future. Consider factors such as market trends, industry competition, technological advancements, and regulatory changes. A well-thought-out business plan will guide your decision-making and help you navigate challenges and opportunities in the months ahead.

With these, business owners can ensure their financial stability, minimize tax liability, and position their businesses for long-term success. Let us help you handle your business finances while you focus on growing your business.

Focus on what you do best, and delegate the rest: Why now is the time to outsource!

If you found yourself avoiding your books in 2023, and your books fell behind, and you were unclear about your profit margins, cash flow, and expenses—it’s time to outsource your bookkeeping! Don’t ignore your business finances. Start right now. What can you gain by outsourcing your bookkeeping?

1. You save staffing and payroll costs.

Adding a bookkeeper to your payroll will end up costing you more in insurance, benefits, and training expenses. Even if your in-house bookkeeper works part-time, your payroll costs will be high since you still have to cover the cost of employment taxes.

2. You have access to a pool of experts and resources.

An in-house bookkeeper often operates solo, which means they can run into unforeseen delays or problems without the resources to consult for assistance. They may also lack the necessary experience to adapt bookkeeping systems that support changes and expansions you make in your business.

Outsourcing your bookkeeping to a professional bookkeeper gives you access to a deeper knowledge pool of experienced financial experts. An outsourced bookkeeper often manages the books for a variety of clients, so they’re more likely to stay up-to-date with state and federal regulatory measures that may affect your business now or in the future.

3. You have more time to focus on your business.

Many small business owners discover the hard way that bookkeeping is a tedious and time-consuming task. In fact, the average small business owner spends eight hours a month completing their books—that’s a full day of work! By outsourcing this task, you can focus your attention on growing your business.

4. You will enjoy a stress-free tax season.

An outsourced bookkeeper is an invaluable resource when tax time rolls around since up-to-date financials are essential when you need to file your taxes. Your bookkeeper can provide you or your accountant with the information necessary to prepare your taxes accurately and quickly.

Start saving time for what’s most important—growing your business—and outsource your bookkeeping to us!

Three Financial Statements That Every Business Owner Needs To Understand

Financial statements are an essential part of small business finances. They provide a snapshot of a business’s financial health and performance. Each one provides valuable information that can be used to make decisions about the future of the business. Understanding these statements is essential for any business owner who wants to make informed decisions about their finances.

What are financial statements?

Financial statements summarize a business’s financial performance over a specific period, such as a quarter or a year. These statements include three direct reports: the income statement, the balance sheet, and the cash flow statement.

1. Balance sheet. The balance sheet expresses the financial position of a business. It shows three things about a business’s financial health: its assets, liabilities, and shareholder equity (or capital). When combined, these three elements make up the worth of the business for the period the balance sheet covers.

2. Income statement. Also called the Profit and Loss (P&L) statement, the income statement helps determine whether the business turned a profit or loss for each period of time. An income statement summarizes a business’s profitability and financial results for a period. It focuses on revenue and expenses. This financial report shows what it costs to create your products and services and keep the business running. It is handy to compare how a business’s revenues increase or decrease over multiple periods.

3. Cash flow statement. A cash flow statement measures how well cash flows through a business to keep operations running, pay employees, pay bills, and invest in opportunities. It is the third primary financial statement businesses must produce. Cash flow statements enable the business owners and partners to understand how a business runs: if there’s sense, process, and predictability in the operations, and if the business is on solid financial footing.

Anyone can learn how to create and draw insights from a business’s financial reports. Investors, business owners, and managers need to understand the results and trends to drive the business successfully.

Unsure of where you stand financially, we’d love to help! Schedule a call. We can help come up with a solution customized for your needs.

8 Ways to Manage Overwhelm as a Small Business Owner

The entrepreneurial journey can be a rollercoaster, and we want to help you stay on top of the ride. So, today, we’re sharing some valuable tips on how to combat entrepreneur burnout and keep your inspiration alive.

1. Prioritize Self-Care.

It’s not selfish to take care of yourself. In fact, it’s essential for your well-being and your business. Schedule regular breaks, exercise, and maintain a healthy diet. Remember, a healthy you is a productive you.

2. Set Boundaries.

Learn to say no when necessary. Setting clear boundaries between work and personal life can help you avoid overworking and maintain a work-life balance.

3. Delegate and Outsource.

You can’t do it all alone. Delegate tasks to your team or consider outsourcing. This allows you to focus on what you do best and reduces the weight on your shoulders.

4. Time Management.

Efficient time management is crucial. Plan your day, prioritize tasks, and allocate time for each. Tools like time-blocking can help you stay organized.

5. Stay Passionate.

Reignite your passion for your business. Remind yourself why you started and the impact you want to make. This can provide a much-needed motivational boost.

6. Seek Support.

Connect with fellow entrepreneurs, join business groups, or find a mentor. Sharing experiences and challenges can be a great source of support and motivation.

7. Regular Breaks.

Don’t skip vacations or downtime. Regular breaks can help you recharge and return with fresh ideas and energy.

8. Celebrate Wins.

Don’t forget to celebrate your achievements, no matter how small. Acknowledging your successes can boost morale and keep you moving forward.

Remember, it’s normal to experience burnout from time to time. The key is recognizing it and taking action to prevent it or recover from it. Burnout doesn’t mean you’ve failed; it’s a reminder that you’re pushing the boundaries of your potential.

Facing the challenges of managing your business finances? We’re here to support you every step of the way.

How to Prepare Your Business for a Successful 4th Quarter

Fourth quarter planning is crucial for business owners as it sets the stage for a successful year-end and prepares your business for the challenges and opportunities of the upcoming year. Here are some key areas to focus on during your fourth quarter planning:

  1. Budget Assessment: Evaluate your current year’s budget and compare it to actual results. Identify any variances and adjust your budget for the next year accordingly.
  2. Cash Flow Analysis: Ensure you have a clear understanding of your cash flow situation going into the fourth quarter and prepare a cash flow projection for the next year.
  3. Tax Planning: Review your tax situation and assess opportunities for tax optimization, such as making necessary deductions or contributions before year-end.
  4. Prepare year-end financial statements, including profit and loss statements, balance sheets, and cash flow statements, for internal analysis and potential reporting to stakeholders or investors.
  5. Review and update your business plan and long-term strategic goals. Identify areas for growth, diversification, or cost-cutting.
  6. Conduct performance evaluations and set goals for the next year. Consider offering incentives or bonuses to motivate and retain key employees.
  7. Ensure that all financial records are organized for year-end tax reporting. Consult with a tax professional to take advantage of any available deductions or credits.
  8. Plan your holiday marketing campaigns and promotions to boost year-end sales. Consider how you’ll carry this momentum into the first quarter of the new year.
  9. Assess the need for equipment, technology upgrades, or facility improvements. Budget for necessary capital expenditures and plan for financing if needed.
  10. Ensure compliance with all regulatory requirements, including business licenses, permits, and industry-specific regulations.

Going into the fourth quarter, many businesses pull out all the stops to source new business and bring in whatever income they can. But the 4th quarter also provides the perfect opportunity to assess the financial health of your company and ensure a strong start to next year. Need help with the financial side of things? We’re here to help!

3 Things That Scare Business Owners

What scares small-business owners? According to the survey, they are most worried about:

  1. Taxes
  2. Government requirements
  3. Poor sales

So what’s a nervous small-business owner to do? Instead of fretting about how government regulations, shutdowns, and debt defaults might affect your bottom line, channel your energy into focusing on what you can control: financial planning, customer retention (and acquisition), and risk management. Once you’ve got a handle on these, you’ll find that those other concerns are a lot less scream-worthy.

1. Financial planning.

Not knowing where you stand financially will cause much more stress than being certain. Once you know the reality of your financial situation (loan obligations, upcoming taxes, projected revenue, etc.), you can make spending decisions more confidently.

Bonus: With a solid financial plan, you’ll be prepared for the next tax bill or unexpected event.

2. Customer retention.

Dozens of studies have shown that improving the customer experience and retaining customers can save businesses money and increase revenue. If you don’t yet have a system in place for upselling existing customers and ensuring that they have a positive experience, you could be wasting money.

3. Risk management. Think about the types of natural disasters or financial blows (theft, lawsuits, etc.) that could impact your business, then devise a plan to manage them. How would you operate with damaged premises? What extra roles could your staff take on? With some proactive risk management, you can minimize the damage external forces can cause your business.

Bonus: When you take time to review your risk exposures, you can take action to fix the things most likely to cause a financial loss.

It’s normal for small-business owners to be worried – we all are. Instead, use that worry to fuel action. If you’d like to learn more about how we can help you prepare, take managing your business finances off your plate, and help you grow your business, schedule a call with us today!

Summer Bookkeeping Tips: Stay Organized Amidst the Sunny Season

Summer is in full swing. The first thing most business owners avoid when the weather improves is generally the tedious things. Like staying on top of your bookkeeping and financials. But as the summer sun shines bright, it’s important to keep your business’s financial records just as radiant. So, we’ve put together some helpful tips to ensure your bookkeeping stays on track during the sunny season.

Streamline your expense tracking

Whether it’s business trips, conferences, team outings, or summer promotions, make sure to accurately record all expenses and keep receipts organized. This will simplify your bookkeeping process and make tax time a breeze.

Embrace cloud-based bookkeeping

Take advantage of cloud-based accounting software like QuickBooks Online, which enables you to access your financial data securely from anywhere. This flexibility allows you to enjoy your summer adventures while staying connected to your business’s financial health.

Review your budget

Summer often brings unique business opportunities and challenges. Take time to reassess your budget and adjust your financial goals for the upcoming months. Ensure you allocate resources strategically to make the most of the season’s potential.

Stay on top of invoicing

Don’t let delayed payments disrupt your summer flow. Send out invoices promptly and follow up with any overdue payments. Maintaining a healthy cash flow is crucial for a successful season.

Remember, even during the summer, your business’s financial well-being deserves attention. Implement these tips to maintain smooth bookkeeping practices and enjoy a stress-free summer.

If you don’t want to handle any of your bookkeeping over the summer, then a great option is to hire us to do it for you! Then you really can have your cake and eat it too. Get in touch with us today.

Managing a Small Business During the Coronavirus Pandemic

Managing a Small Business During the Coronavirus Pandemic

Are you worried about the impact of COVID-19 on your small business?

Probably! This is a tough time for all of us!

In just one week, it seems like everything in the world turned upside down. COVID-19 has had an unprecedented effect on our society in modern times, with social distancing being practiced on a mass scale to prevent the rapid spread of the virus. This situation has forced small businesses all across the country to either temporarily close or dramatically change their daily operations.

Like all Canadians, we’re watching all of the new developments of COVID-19 with rapt attention—and especially those that impact Canadian businesses. From the stock market crashing to bars and restaurants being closed indefinitely, it’s currently a scary state of affairs.

What’s important to remember, however, is that this *is* temporary. Things will likely swing back to normal (or close to normal) in a few weeks or months. When that happens, you want your small business to be in a position where it can rapidly bounce back from the damage caused throughout the crisis.

Here at The Number Works, we don’t have all of the answers, but we can certainly provide some financial advice that might help you navigate through these challenging times.

You Still Need to Think About Your Taxes

The good news is, we’ve all gained more time this tax season. The CRA has deferred filing due dates as a result of the hardships of the COVID-19 pandemic. Individuals (other than trusts) now have a due date of June 1st, 2020.

If you’re expecting to receive benefits under the Goods and Services Tax credit (GSTC) or the Canada Child Benefit, we encourage you not to delay filing as those credits will surely come in handy during these times.

Trusts with a taxation year ending on December 31st, 2020 now have a filing due date of May 1st, 2020.

The CRA will allow all taxpayers to defer until after August 31st, 2020 the payment of any income tax amounts that become owing on or before September 2020. This relief would apply to tax balances due, as well as instalments, under Part I of the Income Tax Act. No interest or penalties will accumulate on these amounts during this period.

Even if you aren’t expecting tax credits, now while there’s some downtime is a great opportunity to get organized and move on your taxes. Please get in touch with us if you need any help.

Communicate With Your Customers

Whether your business usually operates out of a brick-and-mortar location or not, now is the time to communicate with your customers online. Use social media and, if you have a collection of email addresses, a newsletter system to reach out and keep your clients informed.

If you haven’t already done so, it’s also a good idea to send out an email addressing COVID-19 and any changes that your business is making. That might be to business hours, operations, sanitizing, or any kind of safety adjustments.

If you’re stuck at home, you could spend some additional time every day working your business’ social media accounts. By commenting and interacting with your customers online, you’ll be engaging with them just as much (if not more) than you did in person. This strategy can be essential to keep your customer relationships secure throughout the crisis.

Put Your Focus Online

Shifting your focus online at this time might be the only way to “keep in business.” While we’ve already mentioned email and social media, there are other ways to engage with your customers digitally. For example, your website.

If you haven’t updated your website in months (or even years), this is the perfect opportunity. There are going to be more people online than ever over the next few weeks, so you want to be putting your best foot forward. Polishing up the webcopy on your site, posting updated photography and graphics, updating your news or blog, or giving your website a full facelift can be excellent ways to improve your business while you’re stuck at home.

Even better, these improvements will pay off even after we’re all safely back at work!

Work On Your Future Plans

At times like these, it can be difficult to remember that things will get better. But as a small business owner, you need to keep an eye on your future plans now.

If you haven’t already got one, now is the time to implement an emergency savings system for your business. Think about how you can put away savings for your business so that in case of any future emergency, you have some money put away for a rainy day.

There’s really a lot of planning you can do right now, while things are slow. By taking some steps today to refine your product line, generate new marketing campaigns, and reexamine your finances, you can put yourself in an even better position when everything has reopened for business. And if you need any help with the financial side of that, we’d be happy to help!

Bringing It Home

Just like every small business across Canada, The Number Works is having to adapt quickly to everything that’s happening. We may be working from home, but that certainly doesn’t mean we’re lounging around in our PJs! We’re crunching the numbers and helping out our clients wherever we can to weather this storm.

If you’re looking for some help with your tax returns, or simply want someone to take a look at your finances, The Number Works would be happy to help. Contact us today, and we can get started helping you manage your small business’ finances throughout this pandemic.

Bookkeeping New Year's Resolutions

Bookkeeping New Year’s Resolutions

Do you always keep your New Year’s Resolutions?

Unfortunately, studies have shown that most new year’s resolutions simply don’t work. We enter into the new year with the best of intentions, planning on making significant changes to our lives, but before we know it… it’s February, and we haven’t taken any steps towards our resolutions.

One of the reasons for this is because most resolutions resemble wishes rather than actual goals. They are too general, e.g. “I want to lose weight,” or overly ambitious, e.g. “I want to be able to run a marathon by February.” If you want to make a new year’s resolution that you’ll keep, it needs to be both realistic and actionable.

This year, why not make your new year’s resolution about your small business’ bookkeeping? There are a ton of concrete steps you can take to make your bookkeeping habits and practices even better for the upcoming year. Take on any of the following resolutions, and you’ll not only be able to keep them, but you’ll also see some major positive changes to the way you handle your personal and small business accounting!

Resolve to: Digitize Everything

The days of keeping your receipts and invoices in a series of shoeboxes are long gone. Nowadays, thanks to digital technology, you can make sure that everything is optimally organized so that you can find any document in a matter of minutes (if not seconds).

While you do need to keep paper copies of all your receipts, you should be creating digital copies that are correctly named and organized on your computer. It isn’t as difficult as you might think, as there are dozens of high-quality apps that allow you to simply take a photo of a paper receipt with your phone. These apps will then automatically name and file that record into the proper place in your bookkeeping system.

Creating a system like this can have countless benefits. First, searching for a necessary receipt is going to be easy as pie. Just type the name into the search, and the corresponding document will pop up. If you’re using accounting software, it will help you keep track of all your receipts, organizing them for you by date and type.

It’s also going to be easier to work with a bookkeeper or accountant when your financial documents and records are already “filed” and organized on your network!

Resolve to: Hire a Bookkeeper

One of the biggest time sucks for small business owners is doing their own bookkeeping.

Bookkeeping is something that needs to be constantly updated and maintained. If you’re a super busy small business owner, that can result in updating your financial records being put on the backburner. Over time, this ends up becoming a huge backlog of work that you MUST do to keep your business happily humming along.

When you hire a professional bookkeeper, you’ll have the time to focus on the job of growing your business rather than having to monitor and update the books every day. The cost of hiring a bookkeeper is often more than covered by your increased productivity, and that’s not even mentioning the levels of stress that you’ll be avoiding!

If you don’t currently have a bookkeeper, you’re probably dreading going over all of your year-end financial records. By hiring a bookkeeper, you can instead rest easy and enjoy the start of the new year!

Resolve to: Modernize Your Bookkeeping Software

Do you keep all of your financial records in an Excel spreadsheet? Now, there is nothing wrong with that—Excel is a fantastic program! But wouldn’t it be better if you could use a program designed specifically for bookkeeping and accounting, rather than continually having to customize spreadsheets to your desired specifications?

By using online cloud-based accounting services like Xero or Quickbooks Online, you’ll be streamlining the way you input your financial information and records. You’ll also be ensuring that everything will be safely backed up to the cloud. If the unthinkable were ever to happen, all of your financial information would be secure.

At the start of this blog, we told you that most people don’t keep their new year’s resolutions. Why not be an exception to that rule this upcoming year by making your resolutions into actionable plans and strategies that will simplify your life? At The Number Works, it’s our goal to help you keep all of your finances in order with exceptional accounting services. If you want to get the new year started right, please feel free to contact us today! We can’t wait to make 2020 the year that you get all of your accounting under control!