Psst! It’s an Expense. Pass it Along.
If you’re running a Small Business you probably keep a keen eye on cash flow. When things get tight your instinct may be to whittle away at your expenses. Before you start chopping, though, I recommend you take a look at some often overlooked areas you could be billing your clients for.
Don’t sell yourself or your company short by undervaluing your time and resources.
Do be clear and upfront with your clients and potential customers about what they’re getting from you and what they have to pay for.
TALKING TIME (AKA CONSULTING FEES)
In the beginning you had to spend hours and hours communicating with potential and new customers. It was vital to fully understanding the scope of work needed and explain your plan to solve those needs. That’s part of the cost of acquiring new business.
However, if your client still wants to spend several hours a day catching up, you’ll want to make sure they understand those hours are billable. Long conversations (and even short ones) use up valuable time you could be spending working on their project or with your other customers.
Your client might well understand that the time you spend coming up with an idea or developing part of a website or planning an event will be billed. What many don’t realize is how much time you spend researching all those topics before you can even begin the actual creative or planning process.
It’s smart business to factor research time into your pricing structure. Fortunately, just by tracking how much time you spend on each customer you can quickly learn how to accurately estimate the time you spend researching. Then you can figure out how much to bill your client.
You probably already have most of your basic supplies, along with the hardware, software and infrastructure that you need to provide services to your clients.
When it comes to specialty supplies, remember to bill your customers for items you use specifically for their projects, particularly if items are one-time use for a specific project.
POSTAGE, SHIPPING & DELIVERY
Sure, we all like to think of ourselves as digital wizards living and working in the ether, but let’s face it: some things have to be sent, shipped or delivered and that costs money. Then there are the materials, like boxes and those darned packing peanuts we all love to hate. All of those things add up and eat into your bottom line if you don’t bill them out.
It’s really important to be up front with your clients about this to avoid any misunderstandings when they see that invoice. Most customers will understand the need to bill travel costs. After all, they are probably not asking their employees to pay for their own plane tickets for business trips.
Things like online payments make it easy for your customers. If you’re mot passing those costs along, though, you’re just lowering your pay rate. Over time those 1.5%-5% transaction fees can add up, and the more you bill the more fees you
Credit card fees and finance charges should definitely be passed on either through your pricing structure or by directly adding them to customer invoices.
I’m sorry to say you can’t really bill your clients for your massage sessions. This isn’t an accepted line item on most invoices, but you can find ways of reducing the pain.
Be clear with your clients. Let them know from the get-go that they are entitled to X amount of time before they are billed for additional calls and emails. This won’t take away all your pain, but it can slow down a high maintenance type or at least make the situation easier to put up with.
When the relationship with your client is all fresh and new you have clearly defined expectations and directions. As time passes those expectations can start to creep into other areas, and may continue to grow until a sweet little project becomes the Blob That Ate the Office.
When scope and expectations start to be beyond the original plans and agreements, you have to get on top of it quickly. Explain to your client what that additional work will entail and what it will cost.
ABOVE ALL, BE CLEAR
It bears repeating. The most important thing you can do right from the start is to make sure your clients know what they’re getting and what they’ll be charged for. Transparency and honesty are key to developing and sustaining a good long term business relationship.
Remember, no one wants to be compared to the big bad wolves of hidden fees: banks, credit card companies, cellular providers, airlines or cable TV…
Originally published at LedgerGeneral.com