Tuesday January 9, 2018
Another business owner recently asked me, "How do you keep your business profitable?"
Today, I'm going to share the answers I gave them: 7 short, sweet tips for staying profitable.
Business Profitability Tip #1: Don't stop marketing.
Some business owners keep marketing until their schedules are full or their income is at a comfortable level, then they stop.
As a result, if one of their clients stops working with them or reduces their purchases, they end up in a financial crisis.
Even if you already have as many clients as you need, don't stop marketing. If you end up with more work than you can handle, hire help rather than turning clients away or ceasing to attract clients.
If you only promote yourself until you've got enough work to stay afloat, you'll never grow to a state of financial security in which the loss of a client won't put your savings in danger.
Business Profitability Tip #2: Prioritize tasks that bring you profit.
Let's say your day is packed, and you have a choice between two activities:
1. Writing a blog post that might possibly someday get you some leads.
2. Having a phone call with a potential client who's already interested in your products or services.
Which one would you make time for?
I hope your answer was number 2!
Your time is precious and limited. Focus it on the tasks that are the most likely to bring you cash.
Business Profitability Tip #3: Don't put the wrong things in your product descriptions.
A few minutes before I wrote this blog post, I saw someone advertising their newsletter signup page on Facebook. They said that, if people filled out the page, those people would receive 2 free articles.
Of course, my internal response was, "So what? I can get all kinds of articles without giving out my email. I don't even know what I'll learn in the articles or why I should want to learn it."
I've seen several business owners make similar mistakes. They offer weekend intensives, coaching packages, PDFs and other materials... all without realizing that THEIR CLIENTS DON'T WANT ANY OF THAT!
Your clients don't want your processes, materials, coaching calls and articles. They might not even want the knowledge they'll gain through those things.
What they want is the RESULT they'll get from gaining that knowledge.
When you're evaluating your description of your product or service, a good question to ask yourself is, "If the client could get what they want without the thing I'm describing, would they?"
For example, if a lonely singleton could marry their soulmate without buying your relationship book, they'd do exactly that. So the book isn't the selling point - the resulting relationship is.
Focus your descriptions on the results, and don't talk about the process until you've told your clients what they'll get from going through that process.
Business Profitability Tip #4: Cut unnecessary expenses.
If a software system, subscription, program, or other expense in your business isn't giving enough of a return on investment to justify its continued use, it's time to do two things:
1. Evaluate your use of the item.
Are you implementing it enough to get results from it?
If not, is it applicable enough to your goals that you should start giving it the focus it needs in order to work effectively?
If so, is it failing to get results despite your best efforts? If that's the case, it could be that the product or service is ineffective, or that you need further guidance in order to get results from it.
2. Either use it or get rid of it.
After you've assessed the source of the expense, be honest with yourself: are you REALLY going to use it, and if you are, is it useful enough to justify the price?
If the answers to those are "yes", then put specific action steps in your calendar. For example, "From 3:00 to 4:00 on Wednesday, I'll get my capture page and autoresponder set up, so I can actually use the CRM system I've been paying for."
If the answer to either is "no", it's time to either get rid of it, or replace it with a less expensive version if you still need some of the functionality it provides.
Business Profitability Tip #5: Say "no" to opportunities that don't fit your goals.
Just because an opportunity is good, that doesn't mean it's good FOR YOU.
And even if it is good for you, taking on too many opportunities at once is a recipe for not implementing or getting the benefits you expected from any of those endeavors.
When you're evaluating business opportunities, ask yourself:
1. Is it aligned with my goals, values and skills, or am I just doing this because I feel pressured or it sounds good on paper?
2. Will I actually take the time to implement this?
3. Will implementing this compromise my ability to fulfill any of my preexisting commitments?
4. If this opportunity will steal time or resources from one of my other existing endeavors, does it offer a better return on investment than the project it's replacing?
Business Profitability Tip #6: Delegate the right things.
As your business grows, you'll find that it's increasingly difficult, if not impossible, to do ALL the tasks your growing company requires.
If you find that you're consistently busy and overwhelmed, look at your to-do list, and highlight two types of tasks:
1. Low-skill tasks that a person less highly trained than you could do for a low price. This could include things like setting appointments, weeding the junk mail out of your inbox, and scheduling lists of social media posts that you provide to them.
2. High-skill tasks that need to be done well in order to get results, and that you don't have the training to do effectively. This could include writing marketing materials like blog posts, newsletters or website pages, designing your sales funnel, or advanced graphic design.
These are the tasks you should probably hire out.
Which ones you outsource first will depend on your individual situation and finances, but some factors to consider are:
1. Which ones are taking up the most time?
2. Which ones are essential to your business' success, and could provide a large ROI if they were done well, but aren't working effectively due to a lack of specialized skill on your part?
3. Which ones could be outsourced cheaply enough that you can afford to do that at this point?
If you aren't sure you can afford to delegate, here's something to keep in mind: if you make $100 per hour while serving clients, and doing low-skill tasks is holding you back from getting clients, you're losing money by doing it yourself.
If you pay someone $20 per hour, and use the time you just freed up to do work for which you get paid $100 per hour, you just gained $80 per hour for that time.
Business Profitability Tip #7: Get your referral partnerships managed.
How many times have you spent hours driving to networking events, exchanging information, driving home, and (hopefully) following up, only to find that you were neither getting referrals nor getting paid for the referrals you made?
Clearly, this is not the most profitable use of your time.
Through a managed joint venture, you can get referral partners and clients brought to you.
These strategic partners are provided with the messaging and materials they need in order to send clients to you, so they don't have to figure out how to promote you, and you don't have to spend a lot of time explaining it to each one individually.
To make matters better, the referrals and subsequent payments are professionally managed, so everyone can be sure that they'll get paid for making referrals.
If you'd like to know more about how to get more money and referrals through managed joint ventures, click the button below to get the details.