First step is to clear the mental cobwebs

Our office is largely ‘plug in and play’ because we keep most of our business in ‘the cloud’ so we moved within half a day. In the process we managed to rid ourselves of a pile of junk that was lingering around the office for no reason other than sentiment.

Although we’re in the middle of summer, having a spring clean proved quite cathartic. More space, more cupboards, and more light, along with new carpets, a fresh paint job, and a rigorously imposed clear desk policy. The improvements have helped us gain better clarity and focus. We’ve cleared away the physical office detritus and have blown away some mental cobwebs too.

I’m not sure how closely these things are connected, but having just closed our first business quarter year end with a record level of income, we are now on target to surpass that in the second quarter. In fact, if we do achieve record first and second quarters we’ll have produced more revenue in six months than we did in either year one or year two of the business. This is a phenomenal achievement and a testament to the power of building a strong recurring revenue base.

Looking at the numbers it might appear that the business has an average growth rate of around 12 per cent a year – but in reality the business remained largely static for around four years. Not only did we get the pricing wrong in the first couple of years, we were hit with the credit crunch and the accompanying stock market collapse. In reality our growth didn’t really start to take off until a couple of years ago.

I have identified several areas that have contributed to the revenue increase, but the majority of the success is due to just one thing – getting the pricing right. Our fees have been a moveable feast since day one, and we have tried all kinds of formula, each ultimately flawed. But the breakthrough came when we looked very closely at the value we brought to the table, and level we needed to be rewarded in order to become a viable and growing business.

Getting the pricing right meant we had to undertake a bit of a spring clean. We needed to shift some deeply entrenched ideas and beliefs in order to accept what was right for the business and right for our clients. That wasn’t easy, especially when confronted with an array of ‘experts’ each giving their views on what and how you should be charging.

In my experience the problem isn’t in knowing what you should charge, the problem is in believing you can charge it. So it then becomes necessary to rearrange the way you think, to blow the mental cobwebs away. In my case, I engaged with a business psychologist charging £500 an hour. My brief was to change my beliefs so that I could charge £500 an hour too. It was expensive, but it worked.

Dennis Hall is managing director of Yellowtail Financial Planning