Why Everyone Should Have a Profitable Business (Not Just People at the Top)
Today we’re talking all about some important myths when it comes to making more money in your business and I want to help bust those for you.
I don’t need to worry about how to make real money in my business right now, I’ll worry about that later.
Uhhh, when exactly is later? I hear this even from businesses that are several years old. You can’t start a business without a plan for how you are going to make money. I see so many people, especially creatives, that have a great idea, or they figure out they are really great at a specific skill, so they start a business, they get the website up and running, they set a price based on what some others are charging, and they start telling everyone they know online to hire them.
There is no real business foundation, no business plan, and no idea if and when they will ever profit from their business. A few years later, they might be booking clients consistently and there is revenue coming in, but they are barely turning a profit, and certainly are not paying themselves a decent salary.
So what went wrong here? There wasn’t a plan in place from the beginning. Many people erroneously think that the pricing part and the money part will just get easier sometime in the future. But guess what… it’s never going to get easier if you don’t address it. You might not need to write a super formal business plan like I did. I don’t think that’s always necessary, but you do need to map out some key things like who your ideal client is, how you’re going to find them, what you’re going to charge them so that you can actually earn a living, how you’re going to convince them to pay you what you need to charge them, what the process is going to be in working with them once they do hire you. All of this is important to know BEFORE you open your business, especially the part about “what you’re going to charge” so that you can actually earn a living.
Because that’s just it… you SHOULD be earning a living, even right from the beginning. If you aren’t in it for the money, then you don’t have a business, you have an expensive hobby. You should be pricing your products and services so that you are covering all your expenses, the business is turning a profit, and you can pay yourself. Yet so many creatives in years 2,3, 4 in their businesses are barely making it.
Why? Because they are lacking a real strategy and plan when it comes to the financial side of their business. They throw their business out into the world without a proper foundation or plan with the idea that “Eh, once I get some business experience under my belt, I’ll figure out how to make money.” No, it doesn’t work like that. Once you put a strategy in place to make money, you’ll earn money. So put the plan in place NOW and not some arbitrary date in the future.
Only those that are targeting the high-end market can make the serious money.
If you are someone who has thought that before – that your goal should be to work your way up to targeting luxury clients or 6-figure businesses and only then can you make real money – allow me to remind you of a well-known company called Walmart.
Walmart is possibly the most obvious example of a business that makes a killing off targeting the most value-conscious consumer, yet is an insanely profitable business. Now, let’s get real here, though, I don’t want you to try and be Walmart. Their business model is completely different than that of a small creative business (and truthfully, I don’t agree with some aspects of their business model), however, my point here is that it doesn’t matter what level of the market you are targeting – the most budget-conscious client all the way up to the high-end or high-level client who has the means and the willingness to spend a lot of money – you should still be profitable no matter who you are targeting. Because again, the point of having a business is to make money.
I see so many creative business owners who start by offering cheap products and services, and often they aren’t even sure who they are targeting at this point, but since their products cost less than those of the market around then, they quickly attract the budget-conscious client, and then they think that once they get more experience and they have more work to show in their portfolio that eventually they will work their way up to working with the high-end client, and then magically they’ll be making a lot of money.
The biggest issue with this line of thinking is that people care a lot less about prior experience than you think. I mean, it’s absolutely important, but just working for a long time isn’t enough to charge higher prices and make more money. I reached a stage in planning weddings where a potential client really didn’t care if I had planned 50 weddings or 250 weddings, at that point experience was experience and clearly I had it, but I had to sell them on a lot more than just experience to get people to pay $10,000 or $15,000 or more for wedding planning.
There is SO much more that goes into running a profitable business than just the size of your portfolio. You need a solid strategy in everything from your business foundation, your marketing, your sales, your systems, and of course your finances and your pricing. Obviously I’m big on that one. And the key is, if you focus on those things NOW, if you focus on the strategy of your business NOW, you be so much more profitable NOW. Stop thinking that magically someday in the future you’ll have it all together and you’ll be ready to figure out the money part of your business or that you have to work your way up to the high-end market before you can make good money.
Those are both entirely false. All businesses should be making money. And if you’re struggling with that part, get back to basics. Figure out where the disconnects are. If you’re having trouble doing that, find a business coach or strategist, that’s exactly what they are good at – taking an objective look at a business to see how to make it more successful. Create a business plan if you haven’t done so already.
Yes, all of this requires work and an investment in your business, but you can be a lot more profitable right now if you do the work. There will never be this magical moment in your business where it all just comes together and the money starts flowing in. There will never be a point when a potential client just says, “Oh, I see you’ve just planned your 25th wedding. Well in that case, here, take all my money!”
The money comes when you create a plan, when you create a strategy, and then consistently execute it. So put the plan in place first, and invest in yourself, invest in your business, so that you can full work that plan.
If you want more tools to get the money side of your business in shape, be sure to join me in Profit Bootcamp, the doors close in just a few days but you can still join us for all the trainings, Q&A sessions, and support you need.