If You Sell Your Services, You’re Getting Paid Too Little

If you sell services, you may be working for free. When I’m working with self employed business owners who sell services, I nearly always find that they are not billing for some part of their work.  That is, their invoices are missing what they could get paid.  These lost billings can be the difference between making a living and having money for business and family security, expansion, and retirement.

Here are the major ways self employed professionals and contractors are losing money in their invoices:

Not writing down your worked hours daily. Lax time tracking leads to missing dollars on your invoices.  If you are charging time and materials, your customer has already agreed to pay for this time.

Not billing quickly for work completed. When you wait a couple weeks to invoice, the ‘newness’ has already worn off of the wonderful job you did.  This leads to customers questioning the invoice more often, leading to slower pay and sometimes challenging the invoice.  Either way you’ve lost money.

Missed additional services. When you hear your customer say, “hey, could you fix this thing over here…”, that’s the sound of appreciation and opportunity.  If you discuss the additional cost as soon as the customer makes the request, their most likely response will be “That’s fine.”   If you wait till you later invoice, or worse yet miss it, you may be losing money on your invoices. Extras clients most likely knew they would pay for but now assume they won’t because you didn’t mention it at the time.

Multiplying these issues with employees. If you miss invoicing opportunities on our own work, I guarantee your employees are too.  They follow your example, pay less attention to the money than you do, and generally get paid by the hour (sometimes even if the customer did not get billed for that hour.)

When my clients find, systematically reduce, and capture these lost billings they find the money to build operating reserves, pay themselves more, build expansion funds, and increase their retirement savings.  This often happens without working extra hours. In many cases it also saves time.

So how do you do it?   That’s the part that takes a little time, thought, and process.  Here’s one new solution that I’ve seen work well.  There’s an iphone application that allows contractors to quickly build quotes either while on the customer site or shortly thereafter, such as during a coffee break.  This application quickly turns the quote in to an invoice after adjusting for the actual hours worked and materials used.  Thus both the quote and invoice can be done quickly, usually the same day as the job.  Since it is easy to add hours on the go, it can be quickly adjusted to reflect actual time spent.  Finally, since it is simple to use as well as economical, employees can use it as well.

If you’d like to discuss profits through better invoicing or to find other ways to build your own profits without working harder so you can build a healthier financial future, give me a call.

Now stop reading about Your Invoices and start doing! Let’s create YOUR personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

How many yellow sticky notes can you juggle before they mysteriously start crawling away?  In desperation, you start doing things the same way each time and voila you’ve developed a system! Let’s take it to the next level; actively search for routines you can systematize.

Save YourSelf.  It’s your business so the benefits of more saved time, energy, and money will flow to you.

Time.  By doing things the same way each time, you have the tools, forms, and answers closer to-hand saving you time.  You’ll spend less time tweaking the tools, finding the forms, and searching for solutions. Systems can be trained into employees, so you’ll be able to delegate confidently, leaving you to spend that time elsewhere.

Energy.  Let’s face it; it’s exhausting making dozens of decisions and creating new ideas every day.  Systematizing may improve those numbers to a more energizing level.

Money.  Also you’ll save money. When you’ve created systems, you can spend less money paying for customization, special skills, and training.  Starbucks delivers high quality, high value, high priced products, yet delivers it with minimum wage employees.  Using systems, you’ll be able to measure and fine tune your results.  Only through repetition can you hone your skills to see where faster, cheaper, better results can be achieved.

Here’s an example.   When I meet new people, I use a simple follow up system.

1)   I send them a hand written note card so they’ll remember me.  I have blank cards, stamps, and an assistant to help make this fast, easy, and meaningful.

2)   My intern enters them immediately into my contact management system.  So if I need to follow up by phone or email, they’re in my iphone quickly.

3)   I add details about their interests next time we meet. Thus, I can learn what they’re interested in, so I can make suggestions or referrals and remember what’s important to them.,

4)   I send them emails of my upcoming events, seminars, and socials; but only if I think they’d be interested.

5)   About the 4th or 5th time I ‘chat’ with someone, I have an idea if any of my services or products would make sense to them so I can make a helpful offer rather than an intrusive sales pitch.

6)   Once a week, I look for my ‘network’ of connected people using Internet social networking services LinkedIn and Facebook.  I get notices of their profiles being updated (new job, new project, new interest).  I compliment, congratulate, commiserate or contribute in a meaningful way depending on what’s happening in their lives.

7)   I use referral groups like PRE (professional Referral Exchange, LEADS and WIN (Women in Networking) to meet, connect with, and find referrals for others.

This system steadily increases the ‘connectedness’ I have with ever larger number of people. It becomes easier to spend my time and energy thinking of ways to really help people since my system handles the mechanical part of deciding when and how to connect and keeps the tools near to hand.

If you are looking for better systems to connect to more entrepreneurs in a meaningful way to build your business, ask me about the new Greater Reading Chamber’s LEADS program or a group in your area. Drop me an email or give me a call.

Now stop reading about Saving yourself Time Energy and Money and start doing! Let’s create YOUR personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

First the real question.  Do you measure your referrals and where your customers originated?  It really isn’t difficult if you just want to get started.  A tally sheet kept at the cash register, a customer database, even a 29-cent Palm Pilot (a pocket-sized spiral notebook) will get you an initial measure.

Why track client referrals? If you know how much time, energy and money went into getting your clients, you can see which methods you want to keep when you are looking for expenses to cut.  You would cut the one that was least effective, not the one that was most expensive. Alternatively, when looking for more customers, you’d want to expand the programs that are most effective.

Be careful what you track. A common approach is to measure the final trigger that ‘caused’ the prospect to become a customer; for example, being introduced by an existing client.  That, however, leads to some inaccurate conclusions.  For example, I have 69 clients that have come directly from my networking efforts (PRE, Chamber mixers, Church, Boy Scouts, etc).  Those people have introduced me to another 90 clients.   It would be easy to say that the 90 came from ‘client introductions’, while only the 69 came from networking.  That would lead me to the false conclusion that I should focus primarily on client introductions to build my future business.  Especially since those are virtually free; there are no dues or mailing costs and it takes very little time to generate them (except of course for the hard work I do to earn client satisfaction).   However, if I had not done the original networking effort to get the first client, they wouldn’t have been able to introduce me to their friends and family.  It’s like trying to have grandchildren without first having children!

Measure the lifetime value of a referral source. Instead, I include in my metrics for each networking group, the full count of original clients and the people they introduced to me. Thus, all 159 clients came from networking. That tells me I should keep networking and look for new ways to network. So, the lifetime value of my involvement in PRE, for example, includes all the clients that have been introduced to me by people who first became clients from PRE.  That total is 31 with 18 of those being second or third generation.

Oh, and yes I should keep on doing a good job for my clients so they keep introducing me to their friends and family.

Now stop reading about Your Referral Network and start doing! Let’s create YOUR personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

Okay, I admit it.  I don’t always follow up promptly every time.  And when I don’t, it ruins my whole week; I feel like a complete fool. I resolve to get better, put in a place a fail-proof, simpler follow up system and get on with my life.  So here are my pitiful, real life reasons for not following up and what I am doing about them.

“I lost your card.” Maybe men don’t have this problem, but I sometime have no pockets, my purse is not nearby, or my day timer has a loose sleeve and the cards fall out.  Maybe it’s just that I have too many places to put the business cards I receive.

So I bought a business card holder.  In fact, I bought 2, one for my purse for casual meetings and one for my carry-all, a bag that holds a laptop, notebooks, or folders, for business meetings.   If I receive a card, it goes into the business card holder, right after I write what the person was interested in and what networking event I met them at.  The card doesn’t come out until it’s ready to be put it into my sales management system.

“I forgot to call you.” We are all busy especially if we’re successful.  Yellow sticky notes no longer count as a reminder system.  And your memory is what you forget with. Let’s stop feeling bad about this and put in a system.

I started using Google Tasks <http://mail.google.com/mail/help/tasks/>.   It is always on, sits next to my calendar, and takes only seconds to add an entry. My iPhone can get to it and so can my assistant.  So I can enter tasks from anywhere as well as delegate simple tasks like sending information (if that’s what I promised you) or having her call to set an appointment for me, which I tell people if I promised to set up a meeting.

When I schedule my meetings, there’s typically a little time between them, so I can review my task list and make a quick call if that’s what I promised.

“It’s been too many days and now I’m too embarrassed to call.” My life is about paperwork, calling people back, and meeting with them face-to-face.  Sometimes with too many meetings stacked back-to-back, my task list gets too long to get everything done quickly enough to suit me.

First of all, get over it.  Many people don’t call you back for a week, and you forgive them, so forgive yourself.  Just be honest and apologize genuinely.

Now fix your system. Set a personal commitment that your follow up calls/emails/mailings will occur within 48 hours.  Then put it on your dashboard and measure yourself.  It’s amazing how focusing on and measuring a result will produce dramatic improvement.  Even if you don’t reach 100%, your success rate at prompt follow up will skyrocket.

Do I feel like a failure for exposing myself this way? No.  I work with self employed people everyday; they share their own foibles.  I’m not alone and neither are you. My clients and I work on easy, simple, no cost ways to measure and improve profits.  Follow up is free and profitable, so every self employed person should build their skill.

What have you done lately to improve your follow up?

Now stop reading about follow up and start doing! Let’s create YOUR personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

For many of my self employed clients, the sales cycle is already on an upswing.  Recovery recession has turned from a deep desire to a slow spiral of reality.  Now comes regroup, refocus and rebuild.  As you build plans for the rest of this year and into next, avoid these deadly financial mistakes that may kill your business during the next recession.  Yes, there will be a next recession; they’re a normal.

Waiting for the All Clear Signal – If you are waiting for headlines that say unemployment is falling, home sales are booming, and sales exceed expectations, you’ll be too late.

Focusing Solely on Debt – You have friends whose business lines of credit have been frozen and others just killed by debt.  Your own debt may be frightening.  As your income increases, don’t make debt reduction your only priority.  Build a stash cash for the next recession, even if you have to start small.

Forgetting Lessons Learned – Now is a great time to make a list of smart things we wish we’d done: saved more, put more away for retirement, researched more before spending, retaining marginal employees.  What did you wish you’d done?  Now don’t forget.

Old Thinking – No, we will not go back to the easy credit, easy sales, and easy growth of 2003 through 2007.  Just like the Great Depression, people’s buying habits have changed for a generation. You’ll need new sales techniques, new marketing techniques, and new customer service methods if you want to be a winner over this next expansion.

Competing on Price – Yes, most of us think Berks County buyers only care about price.  If that’s true, why is Wal-Mart not the only store in town?  Focus on value above price.

Ignoring Your Best employees – Many small businesses reduced employee work-week to save money.  In many cases, the work load didn’t decrease so employees took work home or even came into the office without pay.  If it’s too soon to put these best team player employees back on full pay, find some other way to show you value them. Otherwise, you risk them finding another job later this year.

No Plan for Next Recession – Hopefully we’ll have three or four years before another economic downturn.  Come up with a plan for getting ready.  What did you wish you’d done differently five years ago that would have made you weather this last recession better.  Then do that.

They say that which doesn’t kill us makes us stronger.  So here’s to the newly strong, self employed getting a whole lot stronger.

Now stop reading about The 7 Deadliest Financial Mistakes and start doing! Let’s create your personal profit strategies for growing profit. Call small business profitability coach Merra Lee Moffitt, CFP®. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.

Welcome to the CaptureProfits blog. A Blog (a contraction of the term “Web log”) is a Web site, usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video. Entries are commonly displayed in reverse-chronological order.

Here’s what’s great about blogging:

1. Anyone can blog - No technical skills are required.
2. Blogs are a very inexpensive way to publish to the web – You don’t need to pay a programmer, webmaster, intern, printer, or employee to publish. Once you’ve written, just cut and paste into your blog site. Most blog software packages are free.
3. Blogging is fast – You simply type and submit. New ideas can make it online just as soon as you can create them, in seconds.
4. Blogs get your site rapid notice by search engines – Right now search engines favor blog entries. Search engines currently index new blogs in hours where traditional site pages sometimes take weeks.
5. Blogs allow a broad list of topics – You can write a short bit of information without being wordy, exhaustive, or spending enormous amounts of time writing. That way you can share a long list of topics.
6. You can have multiple blogs – Once you’ve set up your first blog, it’s very simple to add a new one on a different topic. This is great for trying out new business ideas, new marketing ideas, or even prospecting into a new community.
7. Blogs allow you to create your brand in the eyes of your customers, industry, and press – Your blog can be used to demonstrate your expertise, your quality, your innovation, your community involvement, or whatever your company and products stand for.
8. Blogs are a great way to build internet traffic – When you have an interesting topic, people will come back for more, generating more visits.
9. Blogs get people to stay on your site longer -The average length of visit for a blog site is currently 96 seconds. This is informal research done by How Long Do Your Readers Stay at Your Blog – Length of Stay . While that may seem like a short time, it is two or three times the length of a commercial.
10. Blogs convert visitors into prospects into customers into profits – Using blogs as part of your marketing program brings more visitors to your website. If your website was effective before at getting those people interested in your product and becoming customers, the trend will increase.

 So, welcome to the Capture Profits blog.  I’ll share about what my small business owners are doing right now to capture profits in their businesses. Let me know what you want me to write about by sending me comments.

Profitability coach Merra Lee Moffitt, CFP®, can help you blog for profit.  She spends all day, everyday helping business owners reach their financial dreams and goals by capturing business profits. She can be found at, 888-920-2030 or by email at merralee@captureprofits.com.

Quick! Without taking your eyes off the running of your business, what metrics do YOU measure regularly to see if you are making your profitability targets? I’m talking about those calculations for your business that tell you current essential activity about where your profit levels are headed. Numbers that speak to you and not just reports that your accounting software prints out. What is your business dashboard? Like the dashboard on your car, you can develop simple dials for your business, a business dashboard, that tell you whether you are running efficiently or headed for major breakdown and repair. For example: low on gas (not enough sales activity), low on oil (running on a profit deficit that will eventually grind you to a halt), draining battery (not enough response from your market), or overheating (heavy activity that may need extra workforce). Put together as a simple business dashboard in excel, for example, and you’ll be able to quickly monitor your business progress.

Here are some business dashboard examples from my clients:

An Activity Measure. This is a simple count of actions easily collected. For example, make 10 appointments per week with new prospects or existing clients to review accounts and needs. Did you do it or not? Over time, of course, you learn whether 10 appointments achieve the bottom line profit you seek or needs to increase. Such an activity measure is unique to your business, methods, and products. Only experience produces this answer.

A Breakeven Measure. By adding up all the fixed monthly costs and averaging the variable costs over three to six months, you can determine your breakeven point. This is the amount of revenue (sales) you must bring in before you make your first dollar of profit each month. Knowing your breakeven point month to month focuses your actions on attaining profitability earlier in the month. Also it helps you attune yourself to seasonal variations so you can make adjustments.

A Response Measure. How many people have shown interest this week/month in your product or service? This could be a count of proposals made, verbal commitments, new inquiries, or even people asking for your business card. It is an indication of future activity and potential sales. Notice I did not say ‘new’ people. Including existing clients in this measure ensures that we continue to focus on repeat business from our already loyal followers.

A Sales Measure. What new sales dollars came in during the week/month? Was it enough to cover your breakeven and profit target? If you’ve set a sales target, did the sales reach that? Although this sounds easy to measure, it may not be self evident. Are you just measuring cash received, or dollars in signed contracts, purchase orders, letters of intent? Think about what items should be included, then remain consistent.

A Units Sold Measure. If you are a service business, you’re selling hours. You’re units sold are hours contracted. With product sales, your units sold are the number of items sold. When you have a limited number of similar cost items, this measure has more meaning than when you have dozens or hundreds of widely variant priced items.

An Average Selling Price (ASP) Measure. What is the ASP for your units sold? For your labor hours, this would be the weighted average of hours delivered at their actual billed rate. Example: You may have 16 hours delivered at $75/hr, 12 at $72.50, and 9 at $82, for an ASP of $76.89. Since some portion of your product might be sold at larger discount than other parts due to volume purchases, this measure is useful in tracking whether your profit margin is increasing overall.

A Slippage Measure. This is a measure of “lost product”. This would include hours that can’t be billed to a client but should have been. It includes product that won’t be sold due to quality issues or those given away in excess of planned sample allowance. An area of slippage for service businesses is excess hours on fixed bid contracts beyond the original estimated allowance.

A Profit Measure. How many dollars of profit were made? This is the number we’ve all been waiting for and the reason we’re in business. When the profit number is not what we seek, all the other measures are there to help us diagnose what we should be adjusting.

The measures that make up your unique business dashboard need not take huge amounts of time to compile. Generally they can be extracted from your accounting reports or collected by other simple consistent methods.

Your ability to create a business dashboard telling at a glance your direction, speed, and resources can immensely help you control your business. Not happy with your profits? A small change in the ASP or the activity measure can help boost your bottom line profits. Your business dashboard can help you see if you are hitting your targets for activity, slippage, ASP, units sold, breakeven, or whatever you need to measure. Your gages tell you what you’re looking for when you open up the hood and take out the wrench.

So, tell me what’s on your business dashboard?

For a free no-obligation chat on building a business dashboard you can’t live without, call Merra Lee Moffitt, profitability coach and CFP®. She spends all day, everyday guiding business owners reaching their financial dreams and goals by capturing small business profits. She can be reached at, 888-920-2030 or by email at merralee@captureprofits.com.