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When I launched my book publishing business around 11 years ago, I’ll never forget the delicious thrill of signing our very first client. It felt like Christmas morning when you’re a kid, combined with your first crush as a teenager and the first time you hear “I love you” as an adult. I was just sooooo excited that someone actually wanted to hire my services (they like me, they really like me!) that I didn’t think about the practicalities – like charging them appropriately. I was so amazed that my dream was happening, that my commercial mindset (what little there was at the time) went out the window. I would have happily done the project for free. Hell, I would have paid them to hire me.

And so for a project that took 13 months to complete, I charged just AU$4000, which definitely wasn’t nothing, but was it profitable? I could have earned more selling homemade lemonade from a crate outside my office. At an average of 20 hours of manpower per week, the project would have taken a total of 1040 hours, which meant our hourly rate was about AU$3.85. Meanwhile, the client made about AU$195,000 in revenue – and he was still late in paying me.

Yet, I can’t blame the client (although I’m gritting my teeth writing this) because he didn’t ask for such a low fee – I naively offered it! If I had to sum up the first three years of my business in two words they would be, ‘overservicing’ and ‘undercharging’. I was working around the clock to offer the best service at the lowest possible cost, totally underestimating my own worth and that of my company. Most start-ups struggle because they can’t get attention or find clients, yet people were falling over themselves to work with us (and I’m so grateful, as I look back on that time). But in the end, it was more than just because of what we did: we represented a phenomenal bargain and as a result, people utterly loved us.

In those early days we didn’t charge any mark-up on costs. Not a cent! When it came to production of the books, we handed the invoice totals straight from the manufacturers to our clients. We didn’t even charge an administration fee. Because I inherited my grandfather’s stoic work ethic (he was an Australian politician and was up working before sunrise and still going well after dark every day, actively involved in charity, on the board of many prominent organisations and playing tennis until nearly the day he died), I went over and beyond on every project and also wanted to treat all of our clients like VIPs no matter what they could offer us. This is exactly why, on one memorable occasion, I ended up being held to ransom on a trampoline at a client’s launch party. After already losing money on the job, I should have said no when she asked me to MC her launch party for free (I didn’t). I should have also walked away when she got extremely drunk at the party and expected me to spend three hours on her son’s trampoline with her (again, I didn’t). It was a lesson in boundaries – and a lack of them.

This brings me to this chapter’s topic: hurdles and hang-ups. Because even the most eager and experienced entrepreneur can get caught out, hung-up and held back by money memories, imprints and scars from their past, like those we discussed in chapter one.

There is a reason that so many financial planners are teaming up with life coaches, psychologists and counsellors – because helping a person become financially prosperous isn’t simply about teaching them how to calculate profit margins. I recently read an article where financial planners estimated they spent 25 per cent of their time with clients talking about non-financial issues, such as family dysfunction, illness, divorce, depression or spirituality. They really should think about putting therapist’s couches in bank manager’s offices (I’m only half joking) because of the layer upon layer of emotional barriers, roadblocks and hurdles that affect whether a person can balance a bottom line. Have you ever said the sentence, “I’m not good with money”? What does that really mean? What is at the crux of that statement? Do you mean you’re not good at maths, multiplying and square-rooting or does the problem run much deeper? I’d hedge a guess that it’s not simply a matter of not understanding taxable income.

Do you suffer from low financial self-esteem? I certainly did. At this early stage of my entrepreneurial journey, I didn’t have the insight to see how my childhood memories and my subconscious belief that money could cause trouble, upset and envy, were affecting how I handled my business in adulthood. When it came to my assets, I was blinkered to my real worth and I was afraid to ask for what I deserved because I didn’t want to admit that money does actually matter. With the wisdom of experience, I should have sat down with that first client and laid out exactly how much manpower the project would take, how much to-and-fro we would do with the production team, and the discounts I would be able to pass on because I’d nurtured relationships with suppliers. I should have explained that this is what he was paying for – the abstract skills that aren’t always visible – our intellectual property, our connections and relationships, our experience, as well as the manpower and the materials. I only had myself to blame because I bit my lip and blocked my own profit. I didn’t feel worthy. Clearly, I didn’t yet value myself. But the problem with being a financial people-pleaser is the more you do for other people, the more they expect, for even less, and so you embark on a steep downwards spiral, which eventually leads to resentment.

I think the only reason my business didn’t go under in those early days was because we had a huge number of projects on the go at once with a constant flow of cash and low overheads – it was just me and one other staff member working on them (Mel is now my deputy editor at The Collective, so she’s obviously forgiven me for nearly driving her to a breakdown). My biggest problem was I set absolutely no boundaries. Mel still tells the story of the time a client rang her at one o’clock in the morning. A naked Mel leapt out of bed thinking there was an emergency and sat on the stairs outside of her bedroom talking to him, so as not to wake her sleeping husband. What was the emergency? He wanted to change the colour of the font on his book cover. Seriously! She says she caught a glimpse of herself in a mirror and thought, “What the hell am I doing?” She really is the employee of the century.

I kept convincing myself that I loved what I was doing so much, and that I was so lucky to be running my own business, that it didn’t matter what I was charging. I kept convincing my staff (and by ‘staff’ I mean Mel) that it really didn’t matter that we were a smidge broke (I was driving a Mazda 121 that you could only get in and out of via the window and Mel and I shared a phone – she would put people on hold with her hand instead of a hold button because we didn’t have the funds to get a proper phone system). The world was ours! We would never go hungry because our bellies were full of passion and ambition. Right? Wrong, Lisa, very wrong!

In my case, I had fallen into the trap of mistakenly believing that my passion could replace the need for profit – and I don’t think I’m the only budding entrepreneur to do this. Think about it: when most start-up founders embark on an adventure, it’s generally because they’ve fallen head-over-heels in love with a project, a product or a good cause. They’re driven by the belief they can make a real difference, and often the relief at escaping cubicle life in a big corporation.

As for me, three years after starting the business of my dreams, I had reached a point of total resentment. If I’m honest, I just wanted to say a great big “f**k you” to all my clients, even the ones I loved. I wanted to scream as they walked out of my office, “I’m getting paid practically nothing and you don’t seem to care!”

I can say without doubt that if I’d continued in this way, there is no way my business would still be standing, and certainly no way I’d be holding myself up as a good example. So, what changed? Well, those of you who’ve read my previous book Daring & Disruptive may remember me talking about a seminar I went to, which I paid AU$1200 to attend (despite the fact I was so skint at the time I had trouble affording toothpaste).

The seminar was run by an incredible Australian motivational speaker and an expert on leadership, and it turned out to be one of the richest weekends of my life to date, in both the emotional and financial sense. From this man I learned the importance of valuing your time (at the time he charged AU$1000 an hour, worked for 120 days a year and spent the rest of the year with his family) but it was the other keynote speakers who also had a lasting effect on me. Their overt selling-from-the-stage tactics had me in knots and wanting to run the other way – it was so garish. Yes, you read that right. But they certainly had an impact.

That weekend a dozen or so keynote speakers took to the stage to lecture our group on how to make money and many were everything I didn’t want this book to be – aggressive, egotistical, competitive, preying on other people’s insecurities and desires. I’ll never forget one speaker who stood on stage and announced something like, “Right, the first 20 people to run to the back of the room and hand me a cheque for AU$20,000 can fly to America and do a course with me.” I was glued to my seat but you should have seen people running, pushing and shoving to get their spot.

Yet, for me, it was the best thing I could have witnessed because it was such an extreme antithesis to my own mindset that it forced me to find my own happy medium. Okay, I definitely never wanted to be like that man on stage, selling his services in such a hideous manner, but I also quite liked the notion of making money. At least a little. At least what I deserved for my hard work. And just like that, I got hungry for change… and for cash.


MODESTY AND MISERY

I recently read a blog post that really resonated with me called ‘The Myth of the Starving Artist’. It argued many people buy into a romantic notion that art is somehow more legitimate if its creator is a broke one. Just think of the struggling writer typing away on a dusty typewriter or – in the start-up world – the entrepreneur who uses their final $100 to launch their business and has to sleep on their friend’s futon. There can be a certain glorification of destitution. We all love a ‘rags to riches’ story.

In the blog post, the writer uses the example of a “starving artist” he knows who makes handmade buttons at parties. For $3 he will come to your house, do a custom painting on a 1-inch canvas and then turn it into a button. All for less than a fiver! As business models go, it’s utterly terrible – generous but flawed, unselfish but not at all sustainable. And yet, he is seen as a more “authentic” an artist for not chasing commercial gain.

Now, look at the opposite end of the artistic spectrum and the backlash creatives such as Damien Hirst and Andy Warhol have faced when they started selling their work for six-figure price tags. Okay, personally I’m not sure that I agree a painting of a vintage Coca-Cola sign is worth US$57.3 million, which is what Andy Warhol’s ‘Coca-Cola [3]’ was sold for in late 2013, but I don’t need to agree with it. The worth of that artwork is totally subjective, and if someone is willing to cough up that eye-watering sum, then why shouldn’t the artist (or the artist’s beneficiaries) accept it? Okay, the material used to produce it (casein on cotton) would have cost barely anything but factor in the talent, the time spent creating it, the brainstorming, not to mention the years upon years of networking and relationship-building that artists such as Andy Warhol had to endure to get noticed in the art world, long before he was considered acclaimed. Why shouldn’t you take the money when the buyer willing to write the cheque obviously believes that it is worth it, either as an investment opportunity or because looking at it brings them so much pleasure?

Is it any wonder that so many of us undervalue our services when there’s such a stigma around money – you don’t want to look greedy, you don’t want to be labelled a sell-out, you don’t want to ruin your reputation. The Hollywood actor Dustin Hoffman didn’t admit until he was well into his seventies that he actually co-wrote the screenplays for many of the famous films he acted in, including Kramer vs. Kramer. Why the modesty? He was worried people would think less of him. “There was a dignity to being a failure,” says Dustin of his early days as an actor in New York. “If you were in a soap opera – or, God forbid, a commercial – you never admitted it. That was what was nice about being in the theatre – if you were unemployed, it meant you hadn’t sold out.”

We live in a discount-centric economy, with half-price sales, discount warehouses and posters in every shop window boasting they have the biggest savings. From the customer’s point of view they hold more power than ever, but what about the knock-on effect for companies? Look at the recent wave of discount sites – at the end of quarter two in 2014, nearly 92 million customers had downloaded an app for one such website, so they could search for discounts. I’m sure the customers are grateful for the savings, but according to a story in Forbes, the merchants themselves usually lose money on the offers, which is why they usually use the websites as a way of attracting new customers rather than a medium for repeat campaigns.

A few years ago, a blog post written by a company owner who had regularly used a discount website went viral, after the café owner in Portland, US, called the discount campaigns, “the single worst decision I have ever made as a business owner thus far.” Jessie Burke, the owner of Posies Bakery & Café, had offered a deal on Groupon where her customers could get US$13 worth of products for US$6. BUT – and here is the kicker – she agreed to give Groupon 50 per cent of the revenue for customers who signed up to this offer. Why would she do that? Well, she was convinced it would be good publicity, amplify her profile and that most customers would probably buy more once in her café. Obviously she needed more than half of her revenue to cover costs because she estimates that within three months, she’d lost US$10,000, which is no small amount for a budding business. Now, I’ve never used any such discount sites to push a product, so I’m not in a position to judge who they best serve, but looking on from the outside I do think it’s an interesting quandary for a start-up to debate – and not sign up to without thorough deliberation.

In terms of boosting your profile, it clearly has a ton of positives and for that, these discount websites can be applauded. We all know customers love a bargain. We all love a bargain. Start-ups can fall into the trap of thinking some money is better than no money coming in, but from experience I’ve learned that this isn’t actually accurate. And this is why I believe there is such a thing as being too modest with your margins. Think about it this way: if you were clearing out your garage and selling your unwanted stuff on Gumtree or Craigslist, if you could only get $50 for a bike, would it be worth the effort and your time to deal with potential buyers, the time-wasters who don’t turn up or worse (in my opinion) having to arrange for a courier to deliver it to them, even if it was at their cost? Surely not. This is a simple example, but the principle still stands – we must value our time.


TALKING CHEAP

Are you pricing your products in a manner that is profitable for your small business, which will offer you a long-term future, and allow you to expand, prosper and thrive? Pretty much anyone with no business training could have a short-term one-hit wonder company, if they offered a product or service for a fifth of the price of their competitors. But, your company probably won’t be around to celebrate its 10th anniversary – or even your second anniversary if we’re being brutally honest. As American author Zig Ziglar says, “Money isn’t the most important thing in life, but it’s reasonably close to oxygen on the ‘gotta have it’ scale.”

This was a home truth I had to face – and quickly. So, when I came back from that weekend seminar all those years ago, I upped my fees overnight. Just like that. I took back control. Now, I know I’m a ‘back of the envelope’ type gal but let me make one thing clear – I didn’t just pluck a figure from the air. I sat down with a notepad and, over four hours, I logically, objectively and realistically wrote down how much work really went into our average projects. I looked at the margins other publishing companies added to their production costs (those that I was aware of) and theorised others. I thought realistically about how much I could shave off and calculated a fee that made us appear competitive without being mugs.

Of course, our new business model didn’t go down well with everyone, especially returning clients who were used to hiring us in exchange for a pocketful of small change. However, in the new iteration of my company, I learned an important lesson in the power of ‘no’ and focusing on the long-term picture. We did lose some clients, but we soon picked up others who didn’t think twice when we mentioned our fees. We went from potentially being the cheapest to being far from the cheapest, but I would certainly argue that we were absolutely the best at what we did and so I felt comfortable and authentic about stepping into this new model. As an aside, so ballsy did I become that I had banners and business cards made up with the slogan “Revolutionising the publishing industry globally”. It was about 2006, approximately seven years before The Collective was born.

I heard an analogy about cars years ago that has stuck with me and guided me. There was a simple question: do you want to be a Lamborghini or an Audi? It wasn’t a trick question – both are perfectly good cars, both service different markets, and both have become household names because of it. But you can’t try to be both, you can’t slap a Lamborghini price tag on an Audi and vice-versa, or try to convince your customers that you’re one when you’re actually the other. You need to choose where you want to sit in the market and then ensure that your messaging, which includes your marketing, your price tag and your promises, are consistent. In the instance of Lamborghini and Audi, they are two completely different business models. In 2013, Lamborghini brought out a new model with a price tag of US$4 million, building only three (which were bought by private buyers before they’d even set eyes on the finished product) in a quality-over-quantity business model, where customers aren’t just buying a car but exclusivity, bragging rights and being part of a special club of elite owners. Yes, it’s an ego-driven sale, but it’s undoubtedly commercial for that end of the luxe market. And having driven one full-speed around a track in Vegas, I can certainly vouch for the hotness factor.

On a lesser scale, some people baulk that we charge AU$9.95 for one issue of The Collective, yet let’s remember that magazine costs over AU$350,000 per issue just for us to produce. When a reader holds that magazine in their hands, they are benefitting from AU$280,000 per month in fixed staff and office running costs, plus AU$40,000 in writing and photography, then all sorts of other fees to do with contribution, distribution and consultations. They are holding a AU$350,000 baby in their hands. I purposefully priced the magazine at less than a tenner because it was my mission to build a community, not be hoity-toity or too exclusive, and we were relying on our readers’ passion and loyalty to keep our circulation up so our sale price could be low. There are other magazines, especially in the UK and US markets, who opt for a different approach, bringing out one issue a year but pricing it extremely high and marketing themselves as a collectible artwork. Look at Visionaire magazine, whose 63rd issue retailed for US$350. It was printed on metal and they only produced 1500 numbered copies. That’s a seriously pricey publication, but kudos to them for identifying a market, valuing and backing themselves. We now charge AU$200 for a mint-condition copy of our very first issue, because we don’t have many left and it is in such short supply that it has become a more valuable commodity. Some of our readers see it as an investment they’d like in their collection. Simple economics of supply and demand.

It can take a lot of courage to price your worth in our bargain-hungry culture, especially if you’re launching a new, groundbreaking or disruptive product or service and have little or nothing to benchmark it against. One entrepreneur I know says that when pricing a new product, he looks at its closest competitor and then adds a 20 per cent “innovation tax” to get to his RRP. “That covers the cost of all the sleepless nights, self-doubt and false starts that it takes to launch a brand new product,” he says, and he has a good point.

In 1976, the first Apple-1 computer went on sale for a retail price of US$666.66, which was seen as controversially high by many. But Steve Wozniak argues this was a fair calculation when you factor in expertise, material and a little margin. The wholesale cost to stores was US$500, they added on a third to get the retail price to US$667, then rounded it down to US$666.66. “I was into repeating digits,” explains Steve, adding it was “just easier to type”.

In the business world, I firmly believe you get what you pay for. If you’re offering an eye-wateringly low price, what are you saying about your standard of service? I recently spotted a quote on Instagram posted by Kelly Gregorio a writer for Advantage Capital Funds, the business finance incubator. It read, “Don’t demoralise your efforts by setting rates that are beneath your results.” These days, those are words I try to work by. As Oprah Winfrey says, “When you undervalue what you do, the world will undervalue who you are.”

Another interesting point that I’ve heard from many experienced business owners is that while we assume customers want cheap-as-chips services, they can be suspicious if you sell yourself short. A client of mine did a very interesting experiment. They were selling Italian-made handbags for about AU$90, which was far cheaper than their competitors, and yet nobody was buying them. So they decided to do a test and hike the price up to AU$350. That’s a 288 per cent price increase. Yet this reverse-sales tactic oddly worked and the exact same handbag started flying out the door. It was as if customers couldn’t understand why they were so cheap before, and is a fascinating look at human psychology and our expectations, perceptions and suspicions.

That’s not to say I always get it right. I still have moments everyday when I think, “sh*t, why didn’t I charge more?” when I realise I’ve underestimated the effort a project will take to finish. But that happens less often these days and if it does, I don’t beat myself up because I learn from the nuisance or twist presented by every single project. If I had to sum up this chapter it would be this: have faith in your product and have faith in yourself. If you tell people what you’re offering is worth a certain amount and you honestly believe it is in your soul, they will believe it too.




As I mention in all of my books, I am a big fan of positive meditation and visualisation. It might sound at odds, mixing meditation and money (isn’t one all about letting go and the other about getting?) but they actually mix together wonderfully, which is why when I was sitting down to write this chapter I asked the amazing life coach and motivational speaker Gabrielle Bernstein, who we were lucky enough to feature in an early issue of The Collective, to share her favourite money meditation from her book Miracles Now.


“I have to admit that I used to be one of those people who let the bills pile up. Yup, I was that girl. Every month the stack on my desk grew bigger and wobblier. Every time I looked at it, I felt pangs of frustration over having to pay them. Maybe it stemmed from an old fear of not having enough, or maybe I was just exercising my self-sabotage muscles. Whatever the issue, it was a pretty awful monthly ritual.

Then it became clear that my bad habit was blocking me in many ways and creating unnecessary frustration and guilt. My bill pile was cluttering up my desk space – a real no-no. The ancient Chinese method of feng shui emphasises releasing all clutter in the office space. Clutter has a profound impact on our emotional, mental, physical and spiritual wellbeing. The value of clearing the clutter is that it releases vital energy that helps with mental clarity, inspiration and even our earning capacity!

So my first step towards healing my relationship with bills was to clear the clutter off my desk. I gathered my pile of bills and organised each statement in a beautiful green box. (If your bills are paperless, you can make a similar move with your email. Simply create coloured labels or folders for each bill and organise them as they come in, so you are never searching for the latest email statement.)

Once I was organised, I committed to bringing my spiritual practice to my monthly bills. I sat with my beautiful green box and prayed over each bill before cutting a cheque. I said, “Thank you, Universe, for providing me with the resources to pay these bills. I am grateful to contribute to the economy and to support my growing business.”

Simply saying this prayer before paying each bill energised me. I was infused with an attitude of gratitude rather than an essence of anxiety and tension.

Now my bill-paying process is much more enjoyable and my desk is clutter-free. To top it all off, as soon as I cleared my desk space I started to notice many more career opportunities come through. Money began to flow more freely once I cleared the space to receive it.

If you’re someone who experiences a lot of anxiety around paying bills, use these tips to bust through the block. Clear your desk and pray before you pay!”

Money & Mindfulness

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