How To Create Service Packages

87. Creating service packages for your small business may be one of the hardest things to do! Sevana and Tiffany tackle how you create service packages in today's episode and how to convey your value to your clients!************************Our podcast is originally a video podcast, so see us on YouTube or Spotify too.************************Got questions or have a topic you want Sevana and Tiffany to cover? Email us at thebusinessbehindsmallbusiness@gmail.com and see your question answers or topic of interest discussed on a future episode!**************************** About BBSB - We are two business owners with two very different perspectives on building business, and the business behind that in order to achieve your goals. One of us built to sell, and will continue on the serial entrepreneur path, which means your focus and drive should include very particular tools and tips in order to achieve your goal. The other, is building a generational business, one that can go on long after she’s let go of the wheel. This type of business also requires very specific tools and platforms to achieve this goal. Both women have been successful in their own right, but in honesty - haven’t scratched the surface! Sponsorship Opportunities - Email us here: thebusinessbehindsmallbusiness@gmail.comWebsite - Check out our website! https://www.thebusinessbehindsmallbusiness.com Notice - As an Amazon Associate, we earn from qualifying purchases. These earnings contribute towards the costs of creating this podcast and we greatly appreciate your support! Disclaimer - Details of today’s story was inspired by true events but are not based on proven facts. Also, we are NOT licensed financial experts, nor do we give financial advice. Anything we share with you here on our podcast, whether it be a personal experience or submission, or advice/tips that have worked for us, or that we believe would work for you should not be viewed as either financial, business, or tax advice. We ask for you to do your research, have open and honest conversations with your company’s own support providers and make decisions based upon that. Throughout this broadcast we will share our knowledge and give suggestions and hope you will receive them as part of your overall research to better your own company.

#smallbusinessadvice #entrepreneurship #servicepackages #businesspodcast #businessreferrals #howtogrowabusiness Alternative Titles:Service Based Business Packages

Value & Business

Transcript

SPEAKER_00 0:00

There are two words I just can't seem to hear enough these days. Uncertain and unprecedented. As if no other words in the English language exist. English doesn't have to be your second language to know that words like unparalleled or unmatched, extraordinary, or unknown exist too. I'm so tired of hearing uncertain or unprecedented times. Uncertain economic environment. I know all this to describe the feelings we are feeling as we wade in the financial waters we are all navigating through at the moment. It's hard to say if this is a buyer's market, a seller's market, or if it's a market, a circus, the upside down. I don't know. What we do know is that these are unpressed. I'm just saying. What we do know is that these are times. They're times where value is more important than ever. Social media is soaking with ads. And I can't be the only one who is noticing there has been a substantial increase in networking events, workshops, luncheons, hands-on events, markets, you name it. Someone made something or is a coach or consulting something, and you now must buy into it. All this to say it is now more difficult than ever to convey value as a service-based business. And truly the best time to pivot out of hourly services and package your service with a neatly tied boo. Are we ready to dive in? I love it. Let's do it. Welcome to our show, The Business Behind Small Business. In every episode, we're diving in into an area of what you need for a lasting business. We're going to drill down today into how to convey value and also how to build packages. We are your hosts, Savannah Stone and Tiffany K.O. No one gets to a million without getting a little dirty. I love saying that. I don't know why. It's like how to get away with mud. I can't say I can't say that television show without say that without an accent?

SPEAKER_03 2:26

Or the English. No one gets to a million without getting a little dirty. I don't know why. You know, you may have a voice acting career in your future.

SPEAKER_00 2:35

I might. I might. You know, if this whole thing doesn't work out for me, if AI takes my business, there might be a a place for me in theater. Theatre.

SPEAKER_03 2:43

Always have a plan B, that's all I say. Plan B and diversify like hell.

SPEAKER_00 2:47

There's a lot of business behind small business, so let's get to it. Let's talk about packages. Let's. But before we talk about packages, why don't we talk about value? How are we conveying value? What do you think, Tiffany?

SPEAKER_03 3:00

That's a good place to start, though, right? Service-based businesses, I think it's the toughest thing, is especially if you do your stuff remote. And you have to show up every day. Like really out of side, out of mind, is like a real danger to all like remote service-based businesses. So I think you gotta have to get clever, right? Like, I think like you may be like, oh, you know, I'm doing such a good job. I know I'm doing so much for my client, but you gotta put yourself in their shoes and see what they see. You know, they were there, what do they see you doing? And is what you're doing really of value to them? It might be of value to you. So you and I were just talking about this, right? About how um there's certain financial professionals in our field that gets incredibly geeked out over spreadsheets. I may be one of them. I have definitely spent hours perfecting a spreadsheet because I'm so in the zone and so in the flow, right? It doesn't happen often, but it does happen, and I'm the first to admire a beautifully put together spreadsheet. But if you're a small business owner who doesn't do that type of work, who what the hell cares?

SPEAKER_00 4:03

Right. And I was the one telling you. I was like, I felt my my brain cells melting. Wow. Yeah. Well, my brain cells were like, this is above my pay grade.

SPEAKER_03 4:11

Well, somebody was showing you this miracle spreadsheet and all the different functions in it and how well it's tied together and how it has all this information. But if that information one isn't conveyed in a way that your client understands or cares about or needs, they really do not care about all of the taps, pivot tables, look up formulas you put in your spreadsheet. Like just nobody cares. So you may think that's a lot of value. And there are some of us who appreciate that value, right? But as a customer, I can see why they're kind of like an always like so you spend all your time doing this.

SPEAKER_01 4:44

Am I paying for those by the hour, by the way? Mm-hmm. Yep. I agree. I agree. Like, I paid you to do this. That's great. Yeah.

SPEAKER_03 4:54

Um, I used to tell my staff all the time when I had my El Source accounting company, and I'm like, do not ever bring up in a conversation to our clients about how much time and how hard it was for you to reconcile their bank accounts. Nobody cares. Right. Right. Now you and I both know in our world, in in our wor in our world of what we do, like reconciling the bank account is actually a very key component, right? If you can't get that basic part right, a whole bunch of other things just doesn't work.

SPEAKER_01 5:26

Like, don't talk to a client about that because again, they find no value in it. Mm-hmm. I agree. So, you know, we ended up focusing, I feel like in my experience, a lot of it has to do with communication.

SPEAKER_03 5:41

Freaking touch points and touch and then sending communication about things that is really useful to your clients. So if it it is, you know, just open communication, letting them know that if they're looking for a certain something, so let's just say that in our world they're looking for a financial reporting at a certain time because they want to see kind of how they did last month. We all know accountants do lagging indicators most of the time when they do these financial reports because you can't finish it until the month is over, right? So as quickly as you can shoot that out, that's what's important. So if a if a client is saying, hey, what's important to me is that I get to see my financial reports by the seventh of the month, right? Then really your value is keeping them up to date and letting them know by email or by call, however you want to do it, is that one, are you gonna be able to do it by the seventh? And two, if you can't do it by the seventh, because most of the time the client is holding you up because they're withholding information or forgetting to answer your email, letting them know and pinging them and annoying the heck out of them. I've had clients tell me so many times when I had my company that as much as our staff ping them and you would think that that's annoying as hell, they're like, we totally appreciate the reminder. Please just keep bugging us until we get you what you need because we know that we're staying in the way, and we appreciate the fact that you're kind of keep us keeping us in line so that we can get to what we want.

SPEAKER_00 6:57

I would I would add to that the definition of the words that are coming out of your mouth. Tell me more. So, one of the things that I really enjoy doing is educating my clients in what I'm talking about because oftentimes they don't know what I'm saying. So I can only speak to my industry, right? So I remember being in a meeting with a client and I was talking to he was in plumbing. He was a uh a plumbing business, and I kept talking about the PL, the PL, the PL, and and eventually, um, and this was so many years ago, this was before I realized I really need to start defining the words that I'm I'm talking about. And he was like, I don't understand why you are so fascinated with my parts and labor. And I was like, I was like, oh, no, that's not what I'm talking about. And that that was when I realized and lost what you were talking about. Exactly. So he could parts like let's back up. Uh I don't care about your parts and labor. This is what I'm talking about. So I was like, oh, you know what? I thought to myself, oh, you know what? Every client that I talk to, whatever word I use is going to be defined to them. And that's part of intercommunication, right? Any word that I use might mean something different to them. So PL to me means profit and loss. PL to him means part and labor, uh parts and labor. So every client, I start off with, okay, these are the debt, these are the words that I'm going to use when we have conversations. These are what these things mean. This is what an asset is. This is what this is what a liability is. And so when I'm showing you your uh balance sheet, this is the reason why I'm showing you your balance sheet. When we're talking about your net profit, this is the reason why I'm showing you your net profit. So then obviously I'm talking from an accounting point of view, but if you're in a service-based industry, let's say you're in marketing, you know, you're gonna show a client uh the reason rates, click rates.

SPEAKER_03 8:46

Yeah, click rates, visitor, website visitor numbers, things like that.

SPEAKER_00 8:50

The reason behind that. And you're gonna want to explain to them the reason why things take a long time or what trending means, and like all of that. Or if you're in the wellness industry, you want to explain to them the reason why X, Y, and Z. You know, for a client, that to me is a lot of value because you are valuing their understanding of things, and intercommunication, I don't feel gets valued enough.

SPEAKER_03 9:17

Yeah, I mean, I would actually add to that and put another level on it, is that when you communicate the whys, well, so one is clear communication um and um having good intercommunication really is a value in a sense that you're making it easy for them to do business with you. Yes, right? Nobody wants to sit there and hear a whole bunch of technical numb mumble jumbo um for like 30 minutes, because one, now you're just wasting their time, and then two, like I they have no idea what you're talking about. So right. So there's that. But I think the next level I would add to that is you know, communicate, communicate clearly, explain why, but always in the context of the goal of your client. Right. What is your client trying to do? Right? If they're let's say, for example, their goal is I need to go to the bank to be able to get a loan to be able to fund my company, and that's the reason why they're working with you as a bookkeeper because they're trying to get this loan, and the bank says, Hey, your financials are upside down, they're all in the place, like we need you to clean this up before we can even consider you, right? In that situation, let's just say you're sitting there, you're explaining to them what the PL, profit and loss is, not parts of the labor, right? Uh, which is a common mistake. I I always say that. Like sometimes we say PLs, and I was like, Yeah, I'm sure that sounds like 10 million other things. And you can tell when somebody's like, What the hell is a PL, right? Anyways, so let's say you're sit spending time explaining to them what a PL is and stuff like that, but which is important, right? But then at the end of the day, you know, that is also something that is important, but a little bit less important when it comes to getting a loan at the bank. What does the bank want to look at is they want to look at what's on your balance sheet, right? They want to look at your accounts receivable, they want to look at your accounts payable, they want to look at what your, you know, uh liquidity ratio is, they want to look at these things that are all on your balance sheet. So as the service provider, you should be explaining why the PL is important, but more so, you should be explaining even more so what the balance sheet is important and steer the customer to actually look at their balance sheet, knowing what their end goal is. And now the conversation is now tied to what their end goal is, and now you're creating value.

SPEAKER_00 11:18

So, to me, the definition of value or or the driver of value is emotion, and the driver of a sale is emotion, right? So, and I have this conversation with people all the time, whether or not they're my client. I give people unsolicited advice, whether they want it or not. And I it's great, it's great. I am that woman that just talks to you, whether you're trying to walk away from me or not.

SPEAKER_03 11:46

And this is the first time we're the opposite of each other. I am the complete opposite. I've learned to shut my trop and never give unsolicited advice unless somebody asks me, just you gotta let them ride.

SPEAKER_00 11:57

Yeah, well, nope, I just keep on talking. Um, but anyway, anyway. I actually just, was it yesterday, I think? Yesterday or the day before, I was just saying, if you want to understand what your value is, you have to understand what kind of an emotion you are evoking in a person. What kind of an emotion is your service evoking in a person? Is it stress that you're releasing from a person? Is it um anger you're releasing from a person? Is it passion that you're invoking in a person? Like what is it that you're invoking in a person? Because whatever that is, that's what you have to bring to the forefront and remind that person in order for them to see your value. And I'll I'll tell I'll give you an example. And I use this example all of flip and time. I always use Tiffany's, I always use anthropology, I always use because everyone is familiar with them. Anytime you walk into an anthropology, they give you all the senses. They give you all the senses, right? It smells really good in there, it looks beautiful in there. They they hit all of your they hit all of your senses. You know what to expect when you walk in. It's very expensive products, but they have have a way of making you want to be a part of the anthropology experience, right? But it's a product. You can touch it, it's tactile, right? You can touch it, you can feel it, you can smell it, but you can't do that with a service-based business. So what do you do? You have to invoke an emotion. What kind of an emotion are you going to invoke in a person in order for them to feel your value? Do you agree? Agree or disagree. I'm just trying to process it in my own. Okay, same thing with Tiffany's. You walk into Tiffany's. What is what is it about that specific blue, green, I don't know what color it is, box. You walk into a Tiffany's, and Tiffany's has done this, right? Like, I know a million, I mean, half of my ethnicity are jewelers, right? Like I can get jewelry from anywhere. But to have a Tiffany's bracelet or a Tiffany's ring, there's something about that.

SPEAKER_03 14:09

I think you're talking about brand value. But why? Yeah, you're talking about brand value.

SPEAKER_00 14:15

But again, but that's tactile, right? That's tactile. That's something, that's something that you can touch, you can feel, but not when it comes to a service. So when you are a service, you have to be able to invoke that. But how can you invoke that when somebody can't, they're not gonna smell you. They're not gonna, they're not, right? Exactly. And if you're a remote company, it's not like they're walking into your house and you're serving them, you know, like you're not gonna invite them over for dinner. So it's not like you can invoke that in that manner. So then you're like, okay, well, what am I going to do? What kind of an emotion am I going to invoke in this person? What am I going to wake awaken in this person? Well, you have to think about what kind of an emotion do you want them to feel when they are with you, quote unquote, as in your company? Do you want them to feel safe? Do you want them to feel secure? Do you want them to feel happy? Do you want them to feel um whatever it is, that will be the driver of the sale. And that will be the driver of a lifetime client.

SPEAKER_03 15:14

So I think what you're saying is basically um like the value, you're creating value by the experience you're giving your customer, especially at the end of the day. So it's a customer experience, which is not wrong. I think it's actually a lot more um harder to achieve and something even more important to focus on when you're service-based, especially if you're doing your services remotely. And a lot of that value, that experience comes through how you communicate with your customers, right? Um, and what that's gonna look like. So it's not even just it's actually a little bit, it's definitely beyond just brand value. We're talking about just your interaction with a customer. And it is something that services need to think about, service-based companies need to think about. It doesn't get think thought about that often, which is why you get a lot of people who like in our field who are very technical people, whether it's in finance, whether it's in any even marketing people do this all the time. I'm just can't tell you the number of marketing conversations I've been in recently for some reason. I'm just in there going, I actually, you know what, do not care about all the technical stuff behind the scenes. Yeah. Right? I just want to know like, how are you gonna how are you gonna increase like 3x the the phone calls I'm getting from people who's looking for my for our client service online, right? And they go into this deep dive about like just, you know, uh, SEO and like, you know, you know, like the uh fact linking and why, like, you know, this is so important. And I'm like, yeah, I don't nobody cares, right? And that was the experience they're getting, is like, you know, let me walk you through all the details. But the question is, does the customer want you to walk you through all the details, right? It's the experience you're trying to get at with them, something where it's don't worry about it, we got you. Yeah, well that's an emotion, right? You make them feel safe, you make them feel like you have their back, you make sure that you're watching out for them, that you're on the same team with them. Right. Or it's the emotion that you're really conveying at this point is watch all the stuff that I can do and watch all the effort it takes to go do it, and let me school you on how this actually works.

SPEAKER_00 17:12

Yeah. I would think that a marketer is gonna make me feel excited. I would want my marketing team to make me feel super excited. That that's the kind of emotion I want them to invoke in me.

SPEAKER_01 17:24

Yeah.

SPEAKER_00 17:24

Well, if I have an interior decorator, let's say. If an interior decorator comes to my house, would that be considered service? Yes. Yeah, okay. So an interior decorator, I want them to make me feel warm and cozy because my home is my my safe space. So I want them to make me feel like my safe space is going to be taken care of. So that's what I'm talking about. Like those are examples of what I mean. Like I feel as though every service-based industry has a responsibility to invoke an emotion in order to convey their value. And I don't know that every industry does that.

SPEAKER_03 18:05

Well, they probably don't think about it by much, so I think they do do it. I think every time you touch point with a client, you're you're communicating and you're kind of putting out there what the experience is, you may just not think about it, which is not great, right? Because it's not very intentional. But I think there is a hard and soft side to this whole value conversation we're having, right? The soft side would be kind of what you talk about the emotions and stuff like that. But on top of that, like it has to be coupled in reality, equally important, which is results, right? Right. Because most service-based business, if you're a service-based business and you have clients who are small business owners, which I think that's probably a lot of most we have where consultants and things like that, right? They do need tangible results, right? So you can't just sit there and spend their money and ask for a retainer for all these packages you're doing if you have no results. Like, so similar conversation we've been having with one of my clients and we're talking about their marketing agencies. You can tell me all the crazy, you know, how much I'm ranking on page one or whatever, but if my phone ain't ringing and I'm not getting enough people to actually, you're not generating leads for me, I don't really care. Right. Like, like I can't have one without the other. Like, I need to have both, right? But then again, you know, there's some things to be said that if you can generate results, I may be able to overlook some of the softer side, but to be quite honest, it's also be really easy to steal my business because if I find somebody else who can deliver that result and I actually like working with them and doesn't feel like I'm going to the dentist every time I'm on the phone with them, I'm gonna switch as soon as I can, right? So you kind of have to have both in order to kind of keep your client with you, which again translates to what is the value you're bringing to the table.

SPEAKER_00 19:37

So speaking of dentists, really? I I thought you're gonna be like speaking of packages.

SPEAKER_01 19:41

So we'll make packages after we speak about dentists. Okay. I promise.

SPEAKER_00 19:49

I promise there's a connection. Well, my next point was going to be that another way that in which you could bring value is to have a connection to your clients. But I understand if you have a whole lot of clients, it's really difficult to have a personal relationship with every one of your clients, right? Like that's nearly impossible to do. And this is what brings me to my dentist. My dentist is very popular. You can see why, because this man will give you, make you feel like the most special person in the world when he gives you his 20 minutes of time. Right? He has a lot of clients or a lot of patients, a whole lot of patients. But when you're his patient, he makes you feel like you're the only patient he has. So if you have a business, this is another way in which you bring value. When you have a business with not a whole lot of clients, maybe you have a manageable amount of clients. Make your clients feel very special by touch points. Send them a card, maybe, shoot them an email, maybe give them a call, take them out for coffee, whatever it is that you feel you need to do or your time allows you to do. But whatever it is, make it scalable. And then from there, when you have so many clients that you just can't handle any more than that, don't take yourself away from it. Because you'd never want your clients to feel like they're a number. The moment that disconnection happens, and I'm speaking from experience, the moment the disconnection happens and there is no emotional tie left, there won't be a reason for them to stay with you anymore once they feel dissatisfied.

SPEAKER_03 21:22

Well, I think that goes into um, and this is a whole other episode to speak about, right? And again, you know, for anybody who has a service-based business, like you need to hone in, and I know this is hard, and I'm doing this with my clients, which is why I tell you, I know this is hard. But you have to track your customer journey, you have to track your customer experience. From the moment that your prospect, well, when the customer was just a lead or just a prospect all the way through where they buy from you and all the way through where they stay with you for the two one year, two years, three years, what is that experience looks like? And then you can intentionally make sure that they're getting the same experience that they started with all throughout, right? But that is A really difficult thing to do. It's so worthwhile when you have that clarity. But again, something that service-based businesses don't think about very much. But it's so much more key because again, we don't have something tangible for somebody to lock in. Like their experience is their value at this point with you, right? So on top of that, the results plus the experience is really what's gonna what's gonna really convey your value as a service-based business at the end of the day.

SPEAKER_00 22:25

Yep. Absolutely. And now we can talk about packages. Okay, so let's talk about packages. Where do you begin?

SPEAKER_03 22:39

All right, so I'm a big fan of packaging services. I really am.

SPEAKER_00 22:44

Yeah. So many moon, many, many moons ago, you had I should probably I should make this confession. I'm making a confession right now. Um don't try to stop me. Uh many moons ago, I had a conversation with you, and you said, go packages, do it. You'll never regret it. I went packages, I got scared, and then I stopped doing packages, and you said you're gonna regret it. And I said, I know, and then I regretted it. No, I'm going back to packages. No, it's great. I don't know how many Hail Marys that that I need. Um, but yeah, this is my confession.

SPEAKER_03 23:25

Um nobody will hear you. I will not tell us all.

SPEAKER_00 23:28

Thanks. Thanks. Keep it to yourself. But uh, you're not wrong. You're not wrong, because I, again, speaking for myself, and I know I'm not wrong when I say I am speaking for myself, but I'm also speaking for all of our listeners, spend a whole heck of a lot of time curating a really great team and really great processes and fantastic platforms, and spend a whole heck of a lot of time and money making sure that my clients get the best of the best of the best. And there should be compensation, there should be a value compensation for that. Uh, there long time ago, there was a really fun reel or um video or whatever it was, whatever it was, this woman who was uh made a fun song about I made this uh thing, and you're not paying because for the thing that I made, you're paying for the time that I put into making this thing. It was a long time. I'm gonna have to find it. It was really cool. She said, Yeah, she said it was like a scarf that she had made or something. I don't remember what it was. Hopefully somebody else remembers what I was talking about. No, I'm I'm gonna have to look for it.

SPEAKER_03 24:42

Okay. I was like, I'm gonna have to be highly critical of that statement or whatever she just made.

SPEAKER_00 24:46

No, it was it was it was pretty cool, but what she meant was like you're not paying for you're not paying ten dollars for a scarf. You're paying $10, well, whatever it was, $100 for the scarf. You're paying $100 for the time it took me to make the scarf, the material for the scarf, the blah blah blah for the scarf. Like that's what she was talking about. So the value of the scarf is what she's highly critical of. That's why.

SPEAKER_03 25:18

All right, fine. Maybe that's a bad issue. I'm probably about to be canceled by saying so. So maybe. I don't know. I don't know. But no, I mean, she's not wrong in the sense that it's not the scarf itself, right? She just kind of went a different direction. I would have thought she would have said, you're not paying for the scarf, it's not the time I put in a scarf, but you're paying for the, you know, the confidence of the scarf that you wear when you walk into the room, or you're paying for this unique color of the scarf that you your friends, other people cannot get, or like how warm is gonna keep you if you you know went to like you know, North Pole or something like that. She might have said something like that. I don't know. I'm just surprised that she went back and talked about the time because if you go anywhere about the time, like yes, is it valuable? Sure, but I don't know.

SPEAKER_00 26:05

I think she talked about the expertise it took to make it.

SPEAKER_03 26:08

Okay, so if you've had not the experience, that makes sense.

SPEAKER_00 26:10

That's what I think that's what she was talking about. I don't think it was a scarf, it was something else. I think it, or maybe it was a painting or something like that, whatever it was. She was like, the the expertise that it took to make this, you know, the schooling, the education, the the colors that I chose and and why I chose them, and like all of this other stuff. It's like this isn't just some random, let's go with painting. This isn't just some random painting. This is all of the um education behind this painting that you're paying for, all of the um expertise, I guess you can say, that the value behind all of this, and she's not wrong. Uh you know, I I think sometimes people undermine the value of value. They undermine it or they undervalue it. Undermine. Undermine. I think sometimes people undermine the value like themselves to themselves.

SPEAKER_03 27:11

Yes, yeah, yes. Well, I think it's because that's why I was kind of like harping on the whole time factor, is because they're equating time to value, right? Time isn't it is value, don't get me wrong, right? Yes, it's only value if the time is the problem you're solving for. So if you're saving your client time, there is value in that. If it's only 20 hours to do something in that very black and white statement, there is no value to that, right? Or if there is, it's a much lower value than you probably would like, right? Because if there's no skill and there's no experience behind it, there's not much to say there about that. So, yeah, so I think we actually had that conversation probably together with somebody who was talking about like pricing themselves. And you know, we were like, well, you know, you're not pricing for the time that you're, you know, taking to I forget what it was, to consult or something like that for an hour, right? What you're pricing is all of the 20 years of experience you've had to be able to, you know, advise that client for that one hour. So now all of a sudden, instead of the one hour, which could be maybe valued at $50, $75, now you're valuing it at $300 an hour because you went and got the master's, you went and got and got the 10 years of experience. You went and, you know, did all the challenges and thought through all the problems to be able to have this concise conversation in one hour to solve your client's problem. There's value in that, and you got to make sure you price yourself accordingly.

SPEAKER_00 28:38

Um so speaking to that, um, why don't we talk about how to price yourself accordingly? Uh I recently went through this, and I'm not gonna go through all of the things that I did.

SPEAKER_03 28:54

Um feeling a little trauma being recalled right now.

SPEAKER_00 28:59

Uh but I will say that there are some very important things that you should take into consideration when you're creating your packages. Um, there are some financial reports that I pulled when I created my packages. Um, and I also pulled some reports to get a sense of what my overall year was going to look like. Um now, mind you, some of the reports that I pulled are more of the kind of reports that a CFO would pull. So I'm not saying that everybody should be pulling these. And if you have a CFO, um then maybe work together with them to put together your packages. Uh, and if you don't have a CFO, then you know, maybe maybe Google some of this. But you definitely want to factor in your um your GNA, which is going to be your uh general and administrative uh expenses. Because I don't think that people take that into consideration when they're creating their packages. Um because there's ancillary expenses that come into uh play when um when you're doing your work. Uh it's not just the actual physical work that you're doing, right? Um and Tiffany, stop me whenever you think that there's something I'm saying that's incorrect or you feel like there's something wrong with what I say. Um but you do need to uh factor in some level of operating expenses, excuse me. So if there's um if there are certain platforms that you have to use, if there's certain products that you have to use, if there's certain tools that you have to use, you're gonna have to f factor in the cost of those in your packages as well, if you're not factoring them in in some other form or fashion. Yeah, yeah. Um I personally ran reports on uh cash runway, uh my receivables aging, my margin by service, uh what my net income trend was, and my labor to revenue ratio. And I did that because I wanted to know what it was going to look like switching all of my clients from hourly to package. What was it going, how was it going to affect? Was it going to negatively affect, or was there going to be any effect to my cash runaway? Um, meaning how much money would I have to work with to float while switching everyone over? Um also wanted to know because I I offer different types of services, um, how to calculate each of my clients because right now I charge them by the hour by the service. Uh, when I package them, well, how many of the what percentage of each service are they currently using? So I know how to package, grandfather them, if you will, grandfather them, but then those new clients, how do I create a package with those services? Because there's accounting, there's bookkeeping, I have admin as well. So, how do I create a package that's fair and also takes all of them into consideration and uh percentages them them out appropriately? So if you're offering more than one kind of service, you want to make sure that you percentage them out correctly, the ratios are right. Right.

SPEAKER_03 32:19

Um so I think I think getting into the details of how to create those packages, if our listeners are interested, we can totally do a whole other episode about that, right? So there is a bit of there's a couple approaches you can take to figure out what works. Um, just kind of taking a step back to talk about packages. So packages, so there's two things. One, there's packages, and then what and then the other thing is how you price those, right? So um you can still have hourly priced packages and you can have value price packages. So value price being like flat rate or something like that. That's a little bit easier to understand, right? But the whole idea about having a package is you are the expert in your field. You should know what the client needs to get to where they want to be. So if you create a package, it's just a lot easier for a client to be able to choose what they want to buy without having 50 different options because they're not the experts, right? They can't tell you that I need A, B, C, and D in order to get to where I want to be. Um, they're looking to you to do that. And if you can simplify it into a package, into something that is one, also very marketable. Um, two, it just makes the buying decision a lot easier. So, why do people offer three options? Well, there's a reason for the three options. Psychologically, there's a whole thing behind it that if the option, most likely they're gonna pick the middle option because then anchor their pricing, yada, yada, yada. But also, you simplify the choices. And especially if you work with small business owners, we all know decision fatigue is a real damn thing. Yes, it is. Um it's too much information. So if you simplify it, I'm more likely to buy as long as I know that your packages speak to the problem I am trying to solve by hiring you, which is why if you simplify the process, you shorten the sales cycle, which means guess what? You can now sell more to more people.

SPEAKER_00 34:08

And that will say, yeah, and I will say to that that if you do have variables, uh, like in my situation, I do have variables, you can always create add-on services.

SPEAKER_03 34:19

Um you can always have a menu of ad hoc, right? But then here's the thing this is why there is this beauty when you package stuff, right? Because especially if you have different like revenue lines, whatever the case may be, um, not only is it simpler to your client, it is simpler for your staff to understand what exactly they need to deliver. Because you're not giving a client a way to package what their services are in 50 different ways. And now your employees have to go remember and say, oh, okay, client A needs B, C, and D, client B needs A, B, and C. Like it just becomes really hard to keep up with all of that. So again, you're simplifying things for clients, simplifying things for your staff and your employees. It just all around holistically just makes things easier for everybody. But I'm not going to lie, just like you you did, creating those packages, it's it's you gotta really think through it, right? Because you gotta you need to figure out what variables work together to solve the problem, and then you can simplify and kind of like contain it within a three-option world. Right? And that's that sounds simple, but it is not easy to do. But once you have it, you'll see that I know that for my business, once I had it, I was able to sell so much quicker. And I was like, Oh, thank goodness. Because they just looked at it, they got what I was saying, they picked the option, we're done. You know, sign me up, good, and my staff knew exactly what they needed to do because I had trained them on what each of the three options meant. So client chose B, this is A, B, and C, this is how we set them up. Managers knew what to do. Like it was just a beauty to watch when it all clicked together.

SPEAKER_00 35:52

Yeah, it makes it a lot easier to kind of like push the button, go, push the button, go, push the button, go.

SPEAKER_03 35:57

Which we this is what we want in small businesses, especially if your owner was trying to alleviate yourself out of the sales position, because that's all we that's all we end up defaulting to, right? Because typically you can hire out for everything out. The last position you hire out is the sales. Um, and then from that, the second, I feel like, challenge and door that you have to get through is how are you gonna price it? Are you gonna do a fixed rate or are you going to do an hourly rate in which you kind of calculate and accumulate, and that becomes the pricing, right?

SPEAKER_00 36:26

Well, so you tell me, uh, or you tell us. What do you think is a uh a better option? I mean, there are there are options where you could say um up to up to 10 hours of service or up to there is no one option is wrong or right, to be quite honest.

SPEAKER_03 36:47

Um, because you it's so it also depends on how much risk you want to take, right? If you go the hourly rate and you accumulate that, the risk is on the client. Um, if you go to the fixed rate, the risk is on you because you need to make sure that you're controlling your costs. Otherwise, if your your employees are paid by the hour or they're salaried and they're all over the place, they can easily turn your uh margins upside down because they went overboard and spent way more effort than you thought you would be paying for for that, right? So that's where um honestly, you know, if it's of an interest, it's a whole other episode for us to kind of go down that hole of like, how do you figure out what works for you instead? But, you know, pricing in general, I feel like is not just a cost buildup, which is what most people do, is they are like, well, how much do my people cost me? How does my GNA cost me, which is not a bad way to do it either, and that's a safe way, that should be your bottom. Like, that's your cost buildup. That's my bottom. Add a margin to it, I should not go lower than this. And the rest of it is really opportunity. So you can't just look at what your cost is. You also want to look at, well, what's the opportunity and what are the alternatives my customer can go and buy from, right? So I remember one of the things I did is yes, I did a cost buildup to make sure that whatever I'm offering, and this is when I was like trying to figure out what the pricing is. Um, I would do the cost buildup, that would be my bottom line. And then I thought about the client and was going, okay, if they didn't hire us, what are their alternatives? Well, the alternatives is they hire somebody full-time that they didn't train, that they need to manage, they need to offer benefits to, right? Or they can go hire another outsource outfit, you know, alternative there too. Um, so just if we just say those two options, um, but then, you know, also considering, well, what's the pain that the client is trying to resolve here, right? They don't want to train somebody, they freaking don't want to pay them benefits. They want the ease of being able to switch somebody out if they don't like them, or they can cut off the contract, or they don't have to worry about workers' comp, they don't have to worry about any of the insurance, any of that, right? So, I mean, oftentimes I threw out the cost buildup as the bottom price, and I went for the max, depending that I'm gonna compare myself to them hiring somebody full-time, even though we're part-time, we're outsourced, right? But I'm gonna charge that amount because guess what? They'll look at the two and be like, well, yeah, but I mean it's a no-brainer. I'd rather hire you guys because I don't have to deal with an employee, right? Well, mind you, I probably increase the price and then some because let's just be honest, why not?

SPEAKER_02 39:11

Yeah, yeah, yeah.

SPEAKER_03 39:13

Right? A little extra 10% wouldn't hurt. Like, you know, I have a company, you have a company behind you, you never have to worry about PTO. When somebody's out, we have somebody who's gonna replace them. These are all value propositions that an employee can't give you. So let's just say in a very simplified world, you were playing around and you're like, hey, cost buildup, my employee plus administrative and everything, my cost is like, I don't know, fifty thousand dollars, right? Because they're doing a part-time on the client. And then you add your margins to that, whatever, and you end up with if you're at $50,000 for the client, you two X it, so it's $100,000 uh for the for the year or something like that. Um, right? And then you're like, oh, who can they go out to the market to hire for $100,000, right? Then you just kind of play that numbers game, and then maybe you stick with the a hundred thousand, and you're like, okay, so that is the you know, divided by twelve is the monthly rate that I feel like I can charge. You know, you got to make it so that you're standing in the client's shoes and figuring out what alternatives they can do. And if you can go for the higher number, go for the higher number.

SPEAKER_01 40:13

Totally.

SPEAKER_00 40:13

You're right. I feel like you're right. This this is definitely a good uh conversation for our next episode because we can really dive into packages. And uh I feel like some of those uh reports that I was talking about are a good idea for our clients, our clients, wow, our listeners.

SPEAKER_03 40:32

You do need to know your cost, right? You can't willy-nilly just throw out a number, which is so good.

SPEAKER_00 40:38

And I'm not and I'm not gonna be gatekeeping. I want I want everyone to know what I really truly had to go through to create these packages, but it is it is so much more than just saying, okay, well, I charge this and this is how much it, how many hours it takes, so this is what I'm gonna make my oh no no no, my friends. No, no, no, nay, nay, nay. It is so much more than that. I pulled 50 different types of reports, I cross-tracked and cross-did and I calculated and I formulated. I felt like a mad scientist with my vials of things. I was because and and I believe me when I say I kept having to go back to square one and back to step one and back to step one because it took a lot of calculations for me to make sure that I found packages that would not screw me, would not screw my staff, and would not screw my uh clients. And would be easy to follow, easy to understand, easy to train. Because if I'm gonna do this, I'm gonna do it once, and I'm gonna do it never again. Like this is it. So you want to take the time. And so I think it's a good idea for us to do that with our next episode. Let's let's dive into it.

SPEAKER_03 41:57

Well, let us know when you want, you know, part two.

SPEAKER_00 42:00

Yeah. All right. Well, this has been fantastic, and um, I am so excited for uh our next episode, and we are into season five, and so well, hit the thumbs up, the like button, five stars will get a lot of uh we get a lot of responses to this episode.

SPEAKER_03 42:20

That'll be our way to you know we can do another one to really kind of dive into the details of how one, how do you create the packages, and two, how do you price those packages, right? Um, and kind of help walk you through that.

SPEAKER_00 42:32

Absolutely. And if you have any comments, questions, anything, we are more than happy to make, you know, do a shout out during an episode. So um, all of our shows are on your preferred podcast platform, social media, and YouTube. We'd love for you to also share our episodes. And if we have any links, where there will always be posted below. And until next time, mind the business behind your small business because all great successes start small. Bye.