One of the things I see so many Home Staging business owners struggle with is generating a profit at the end of each month and each year. There are so many contributing factors and things out of our control when running our staging businesses, but profitability is one that we have more control over than we think.
And it's really just a math equation, right?
money in – money out = profit
So what goes wrong? Why is it so challenging to have a profitable home staging business?
If we look at the equation there seem to be two reasons….not enough money in and/or too much money out. But as you and I know, these things often go so much deeper than this. The amount of money in and money out of your business are just results…what we want to understand is what causes the problem of not enough money in and too much money out.
To find the cause, it might be worth looking into what creates results. To me, there are three key things that create results in anything we do: Knowledge, Belief and Actions. I call this the Results Triad and it's the center of all our work inside RethinkYou.
Create Your Profitable Home Staging Business
Those three things – knowledge, beliefs and actions – can and will create any result in your business including profitability. So let's dive into how knowledge, beliefs and actions play together to result in a more profitable home staging business.
Money In
Let's dive into the “money in” side of the equation to see what actions you may want to take in order to up your profit game!
INVEST IN YOUR BRAIN
Something that I didn't truly appreciate when I started my business was how much personal growth I would need to do in order to create the results I wanted to see in my business. Our brains are marvelous machines meant to keep us safe and secure but business is full of unknowns and leaps of faith. So guess what? Our brains will stop us in our tracks and get in the way of progress if it means doing something that seems scary.
Raising our rates or lowering our price to book a project is one place where our brain can have a thought error.
We think people won't pay “that much” or they will definitely move forward if we lower or price. In reality, we don't know what someone is willing or unwilling to pay. And we may actually be using a crutch because we aren't confident and comfortable selling our value.
This is why investing in not only developing your staging skills is important, but also coaching that helps you understand and reveal the games your mind plays on you as your business grows and has new needs.
Your brain is also responsible for why you may not be keeping in touch with your ideal clients…
keep in touch
The surest way to generate more money is by keeping in front of your ideal prospective clients. I wrote about how you can keep in touch with your ideal clients here.
Your main role in your business before you are a fully booked stager (and even well beyond!) is Chief Marketing Officer. This means you are the one responsible for going out into the world and meeting people – in person and online – and sharing your expertise, knowledge, and behind the scenes information about your company and how to work with you. This requires more of your energy and attention than just about anything you will do in your business. But so many of us shy away from it because we don't want to be a bother or come across as salesy.
But, what if talking about what you do is exactly the thing that helps people in need find you? There is literally a homeowner right now in your zip codes who cannot sell their house but they have no idea who you are and that you can help them. Showing up in your marketing can be life changing for someone!
Now, not all of your marketing will work. But getting out there and trying, failing and learning is the only way to bring clients to you and increase the money that comes in.
Invest in people
I know this may sound like a money out kind of thing but what I have learned after all of these years in business is that investing in amazing people is such a gift to your business's bottom line in so many ways. Once your business starts to grow and get busy, investing in a team frees you up to do the revenue-generating activities like networking, speaking, creating strategic alliances, email marketing, etc that fill your pipeline.
Money Out
Know your numbers
The first thing to understand about money out is you actually need to know where every dollar is going to in your business. A lot of people advise looking at your profit and loss statement monthly or quarterly but my experience is that sometimes your bookkeeping isn't always up to date. And why wait to find out what your expenses are if there's a super easy way to get that information on your own. There are two key metrics I review on a regular basis…
What are your expenses?
The quickest and easiest way to do this is to go through your bank statement and/or credit card statements and add up all of your expenses. I actually do this on a spreadsheet I created that's inside RethinkYou. On my spreadsheet, I have it broken down weekly so I know how much goes out each week of the month.
How much time does it take?
The second thing we do is track time relentlessly for everything we do and it is assigned to the project we are working on. This helps us to see exactly how much time each kind of project takes on average and how much it costs to deliver. This is helpful even before you have staff so you have a benchmark for how long something should take when you do hire a team.
By doing both of these things, I know exactly how much revenue we need to bring in each month to cover expenses and bring in 30% profit. And, I can evaluate each service to make sure our pricing is set to capture that income.
create systems
One of the most effective ways to control money out is to create clear, easy systems that people can follow to do everything in your business. While it takes time and thought to document every step, process, email template, or file you use along the way to an end result, the time savings on the other end is magical. You can even create systems when you are doing vacant work by using inventory systems, styling look books, and templated steps to your installation days. I go into more depth – ok literally geek out – about systems in this podcast episode.
And we'll be talking about more ways you can have a profitable home staging business in my upcoming FREE masterclass! Would love for you to join us!
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