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good morning staffers today we are in the lovely San Diego area and today we're gonna talk about revenue and pricing let's get started good morning staffers we are here today in the lovely San Diego area and I was hoping to get some fabulous shots from you for you guys here around the bay but to be honest with you it's a little bit cloudy today so we're probably gonna have to forego those and just have a taping here but I'm here in San Diego because I'm tending the American Institute of tax cleaners conference for certified tax coaches and forgive you guys that don't know in addition to being a CPA I'm also a certified tax coach and what that means is I do some pretty complex tax planning with my clients and usually this client said I'm involved with that we do that complex tax planning with they're usually in a net income which means profit range of 250,000 and to begin with and on average at least a half a million is what we're seeing that we're really doing strategic tax planning and what that means is that most of you guys will go to your local CPA note and they'll tell you hey in order to get your taxes down go ahead and buy a truck but be honest with you being a profit first professional I will never tell you to buy a truck unless you really need a truck and said we'll look at alternative ways of saving taxes such as deferring income looking at retirement options where we can max that out or looking at qualified Opportunity Zones to defer some capital gain so we'll get into some more complex strategies for you guys in order to defer taxes instead of going out and buying a truck which is completely inside profit first by the way but today what I wanted to do really is talk to you about pricing kind of give you a tidbit of what I do with some of my clients when working with them in their coaching session and particularly not just pricing but particularly the market up and one of the things that I see with business owners and entrepreneurs is there's always this apprehension about increasing prices or charging you in a fair price and it's almost like there's this fear that if I charge a fair price if I charge the market rate I might not make the clothes I might not get the client and there was this fear of doing it and so a lot of times business owners will do is still say ok I will decrease my markup just for you I'll discount it if you're gonna buy more business or I'll make it up in the volume so what a lot of business owners tell themselves and I'm gonna put a link to my video that we did a while ago about the the pricing and the importance of pricing adequately but really what I want to talk about today is really just the mental mindset that goes around pricing and although you know I think particular to staffing industry it can be a little misleading because when staffing agencies think about valium you know and sales usually they are placing several different people out there in the field and so they are seeing millions when they get go a lot of them just from starting up and there's an illusion whenever seeing these millions is because there's they have to really think about the cost that goes into those millions and these are not necessary bottom line numbers it's not what I'm gonna get I have to pay payroll for those are actually in the workforce it's gonna cost me to recruit I need software because you know I need complex payroll because I've outgrown QuickBooks because they only go up to to interpret the employees and so really there's a lot of cost that goes into that and when you discount your prices what happens is now you are absorbing the cost out of that profit that you could have personally made had you just made the right price and not only are you discounting your prices having an effect on your profit but you're also shortchanging yourself you're shortchanging yourself because now you've got last left cash flow to work with so you are now having to make decisions of okay granted the person that place is the person that I place but who internally is gonna find that person I'm gonna place now because you have less cash flow you have to make very different decisions like maybe instead of getting someone that's gonna be an a player you might have to settle for a B player or even worse a C player there that isn't gonna be as efficient isn't gonna be a sixth and you know when you think about cutting prices you have to think about that domino effect that it's not just bottom line now you're not gonna be able to you investing technology to get new equipment that might be able to automate things faster you're not gonna be able to recruit the person internally that's gonna be able to really service your client in an all-star fashion and pretty much what happens is you end up financing the endeavor from your client and you know some ways some of you guys actually serve as banks for your clients because now they've got 30 days to turn around this invoice but in the meantime you're working on cash flows with just what you have right now from what you're making to pay those employees paying those internal staff pay those costs to you that you need in order to keep your office running and so really staffers it's really important to think about you know that domino effect that happens when you discount your prices you know you're not just you you're not just charging a price for your own bottom line you are representing your staff you are representing your team and at the end of the day you're all servers in your client because if you don't charge them a fair price you're not going to be able to put the right people on that job in order to give them the service in the quality that your client is really expecting and looking for instead you're putting them in a situation that's high stressed or getting someone that they potentially didn't won because they working with somebody that doesn't have the experience so staffers the best thing you can do for your clients for your team or yourselves is charge a fair markup do not discount your markup do not do not do not under play yourself because not all contracts are good contracts not you know sometimes it's better just to let a contract go because if you discount that price you're gonna have to get another concert hopefully that's gonna subsidize that cash flow for you and make up those margins and and and then at some point you're playing a float game and and that's not a game to play you're better off literally just saying no to the customer that's not willing to value you at the work that you bring to the table the other thing staffers I would say is considering a Pareto principle now the Pareto principle says that 80% of your resources is going to go to 20% of your bottom line and I always say you know I know like it could be potential let's say you most of your clients are healthcare staffing and let's say you get this one-off project that hey I need you to fill a office clerk or maybe a working type of position and it's just the one opposition that it's just not your zone of genius so now you're gonna have to like take a revamp of how you do things that means you're gonna have to look at a different talent pool right that means that you're gonna have to you don't have a pool already in place of qualified candidate are that and suddenly it's more expensive to recruit for this one-off type of position than it would be for you just to be able to focus on your zone of genius and just say no to the other type of job that your client is asking you for so always think about you know what is my zone of genius if I focus on my zone of genius so could focus on what I'm good at what I have already have momentum at placing it's gonna cost me less than fulfill that because now I have processes I have economies of scale that people that are trained and you know and grana I'm gonna have to say no to some opportunist a note about opportunity says yes to the bigger more important purpose so in one of our next videos we're gonna talk about mitching versus not niching and what that difference is and until the meantime I look forward to seeing you guys next time