Claire's Growing Pains

6 months on and Claire’s business was growing steadily.  She now had 7 regular clients all paying around £10 per hour.  Things seemed to be going pretty well, but having been so fixated with finding clients, she hadn’t really been keeping on top of her own bookkeeping.  As is so often the case, her own bookkeeping never paid so she would have to do it when she could fit it in.

Claire had kept the adverts running in the local paper, and with some other regular costs building up she decided that now was the time to start getting her own books in order.  As she started to enter the figures into her system a realisation dawned on her.  It hit her like a truck.  She wasn’t making any money.  How could this be the case?  Her workload had increased and many days she was working into the night.  It had been ok at the beginning, but her redundancy pay was all but gone.

Once she had done some calculations it was obvious that this could not go on.  Even with just the bear minimum of running costs she was still making less that the national minimum wage every hour.  This just couldn’t go on.  Something would need to give.  But what?

Claire knew all the technical work of bookkeeping, but running a business was the loneliest she had ever felt.  She decided to talk to her friend Susan who was a mobile hairdresser, and had run her business for a few years.  It wasn’t the same industry, but a business is a business, thought Claire. Susan told Claire that she only had a couple of options.  Either work longer and longer hours, or raise her prices.  It felt hopeless.  She was already doing more hours that she could around Lucy and where would she find the extra clients she needed?  But she couldn’t raise her prices either.  She was convinced that if she did everyone would leave and she’d be back where she was 6 months ago.  She couldn’t fail.

She had a meeting with Stuart to go over some figures the next week.  She knew that she had to put her prices up.  That whole week she could hardly sleep.  She felt physically sick every time she thought of the conversation she would need to have with Stuart.  How would he react?  3 of her other clients were people Stuart had recommended.  Would they leave too?

The morning of her meeting arrived and Claire had almost convinced herself not to even mention pricing.  She had to.  After an hour talking over figures with Stuart, Claire found the courage to mention her prices.  She explained to Stuart that she would need to put her prices up a little.  “Just £2 an hour” she said.  His response was a complete shock to her.  It left her in amazement.  Stuart just looked at her, and without a blink or change of facial expression simply said “OK”.  Claire felt both relief and exhaustion.  The meeting she had been dreading for weeks had gone better than she could ever have imagined.

But was that small increase going to sustain her?

Have you ever felt like Claire?  What did you do?  I'd love to read your comments below.

2 comments

Jennifer W Dec 2, 2015 09:29pm
Personally, I feel that Claire is still massively undercharging even at £12 per hour. There are a lot of ways to advertise effectively without having to pay a penny such as setting up a business Facebook page, attending local free networking events, searching Google for free advertising websites etc. I have utilized all of these methods and all have been effective. I started paying to attend a well known network meeting but did not gain any business from it so stopped paying. I would suggest that Claire works out exactly what her monthly outgoings are including a rough figure for how much she would like to pay herself and work out exactly how much she needs to be earning from clients each month based on that figure.
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I also feel that Claire is under charging at £12 per hour, given that we get no holiday pay, etc etc, even £15 an hour only really equates to the minimum wage. Also what we charge should really reflex what we do for the client. I can relate to Clare but not quite for the same reasons. Being a business owner can be a very lonely place to be, if you have no one to bounce ideas off, and even your own Mom things you would be better off with a job. Mines growing nicely and making a profit, but not a big enough profit to cover a decent wage and invest in the business. Because of my own personal circumstances and also because I'm not a sit for very long person, trading time for money isn't my ideal way of doing things, as I would never have enough hours in the day to do all the things I wanted. I also love my caravan, so not being tied to the office is important. Hence apart from for on site jobs, i try to charge fixed fees rather than an hourly rate. But I also want to do something, like training so that i'm not just charging time for money. I think Clare too feels a bit like this, she needs something that will bring in a recurring income, without having to swop time for money. Time perhaps to look at her procedures and see if she can automate anything, and maybe package things up for clients.
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