You Have to Be Profitable.
To begin the process of becoming more profitable we have to first understand the common pitfalls of businesses seeking profitability. Knowing what isn’t working will make the list of what to do a whole lot shorter.
Overspending & Not Saving
It can feel tempting to buy the best website, the best camera, to upgrade your work space, etc. But, if you haven’t set up a solid savings plan for yourself and your business you have your values upside down. Create a sustainable plan of action by saving at least a month’s worth of living expenses before you start investing in your business. Then, when you start investing begin with things that will bring in more revenue, help you to cut cost, etc. So often I see businesses valuing growth/notoriety over profit. This is most clearly demonstrated when investing in items that look good on the surface but don’t directly point to added revenue. Be wise with the way you spend and always start by saving!
Obviously, when you start a business, you aren’t always able to charge as much as you’d like to long-term and anyone who tells me they didn’t start out charging less immediately loses my trust. We all start somewhere. However, the key is to continuously and strategically raise your prices until you’ve reached your optimum rate. This means, you have to know your optimum rate first then, you need to set a time increment or a number of jobs that will spur your next rate raise. I.e. you raise your rates every 3 months or every 5th job. But, undercharging for your services long-term will cause you to be overworked and underpaid. Essentially, the worst possible combination.
Not building a scalable business.
So many businesses are built around the idea that you have to be 100% present for every dollar that is brought in. The trouble with this is that you are only one person and you can only work so many hours a week and you can only charge so much. This creates an immediate cap in what you could possible make. The trouble with that, is that it makes it extremely difficult to ever make more money. Once you’ve created a profitable business, the very next thing I want you to do is think about how to make it scalable. How can you bring in money when you aren’t even on the clock? How can you dramatically increase the volume of what you are selling?
Not listening to your audience.
If you pay attention, your audience will tell you a lot. They will tell you which products to push, what’s not working and what they desire. They will tell you what language to use when marketing and they will tell you what they will easily purchase vs. what they will need a little convincing to buy. Pay attention to them and make adjustments appropriately! So often businesses get stuck on their original vision, they ignore the calls of their audience and then they wonder why they fail. I’m not saying to bend and sway with the wind, I’m not saying to appeal to everyone. What I am saying, is to choose your ideal client, know them well and listen to what they have to say!
So many businesses put up a website, make a facebook page that they never use, create an instagram account where they only post images of their dog/kids/food/etc. And wonder why they aren’t making sales. You have got to create a solid marketing plan for your business. Know you are talking to, know where that person is hanging out and then make sure they know what you have for them to buy!
For many small businesses, pricing is one of the stickiest subjects. They don’t know how to price their services or goods fairly and they’re often scared of the answer they get back when they see how much they’ll have to charge to really make a living. Through the links below you can download my pricing guides for services and goods. This will help you to determine how much you should charge to make what you want to make. A few things to note:
- Always overestimate the amount of days you want to take off.
- Overestimate your salary - shoot higher than what you need to just get by.
- Underestimate the amount of jobs you will be able to take on.
Like I mentioned earlier, you may not be able to charge what you want in the beginning, but, knowing what you want to charge will help you to know when to raise your prices.
Like I mentioned earlier, you want to make sure you are paying attention to marketing. Treat your social media as marketing tools, get your name out there to more people than just your friends and family and do it as professionally and intentionally as you are able to! When you are beginning your marketing strategy there are a few points to take into consideration:
Your ideal client
Determine who you want to work with the most. Get as specific as physically possible. Where does this person shop for clothes, groceries, etc. Give them a name, an age, etc.
Understand your ideal client inside and out. Know how they speak, what they need help with the most and where they hang out online. Know your competitors inside and out, know what they charge, how long they’ve been in business, how well they’re doing. Understand the market of your area, what do people invest in? Who is spending money? Do your research!
Create a Budget.
Know how much you are able to invest each month in getting your name out there. Both in time and in money. t’s easy to think that social media is free and it’s the best marketing tool for this generation. However, great social media marketing takes an investment. You may invest in education, photography, copy writing or simply just boosting posts. But, you will have an investment to make! You will also want to make a time budget for yourself. This will prevent you from neglecting this side of your business and will also prevent you from overworking in this area. Know how much you want to focus on outward engagement and stick to that plan!
Make a Plan
Once you have a budget in place and firm grasp of your ideal client and your market, it’s time to make a plan. I like creating my plan for 3-months in advance. Create an editorial calendar with services/products that you want to promote, launch dates and sales. Keep in mind any special holidays/events as well. It’s common to plan quarterly because it gives you the opportunity to see the bigger picture. You can make a plan that doesn’t have you promoting too many things at one time. However, I want to emphasize that the plan is the most important piece. If it works better for you to think in terms of months instead of quarters, that’s totally fine! Just build the plan no matter how you need to do it.
- Download the pricing guides above and determine the price that you need to charge to make the salary that you want to make!
- Download the sample social media calendar below and make your social media marketing plan for the next quarter.