Grow Your Business Profits in 2023
If you're looking to grow profits next year, you've likely already
made your plans for the new year. I get that. And it's the last days of
this year, so you've stopped reading blogs. I get that too.
But there's a good chance that while you've used one or a couple of
the strategies below, you've also left some of these off your list. So
I'm hoping one of these methods will help you.
And even though you may have stopped working this year, your brain is
still at work. Even if you don't put one of these plans into action,
you can spend the next few days thinking about it. You can thank me
later.
1. Cut Your Costs / Lower Your Burn Rate
My friend Jennifer, and her
husband Brian, often take the last few weeks of the year and review all
their recurring charges for work. As an agency owner, Jennifer knows
little costs creep into her business and it's easy to forget about the
SaaS products she tried earlier in the year.
Spending on Tools
Here are some questions to ask yourself when it comes to spending on tools:
- Are we still using this service?
- Does this service help us generate revenue?
- Are there other services I'm paying for that have some of these features?
- Would it cause me significant delay or friction to get rid of it?
Imagine answering these questions and seeing an immediate $1500/month in savings. Several of my coaching clients have seen exactly that!
Think about how easy it would be to add $18,000 to your yearly income
without having to close a single deal! That's a fast way to grow
profits in the new year.
But spending on tools isn't the only place where you might cut some budget.
Spending on Conferences & Sponsorships
Another one of my coaching clients decided to skip a key conference this year (the one I run!) and to limit which events they sponsored.
You might think I got mad at them for skipping my conference. Not a
chance! They had been coming for several years and missing one event
wasn't going to hurt them.
They also did the work needed to evaluate where their sponsor dollars
were going. A lot of times we sponsor events hoping there will be a
payoff. Hope isn't a great strategy. So if you can't justify the return
on investment, strongly think about killing it.
Let Some Staff Go
Now, let me start by saying that I have, in more than 25 years of
managing staff, never let someone go in November or December. Ever! So
consider this advice for January!
I'm not saying that you'll grow profits by simply firing people. But
what I am suggesting is to listen to the voice in your head that's been
telling you (for far too long) that it is time to let go of that person
who isn't the right fit.
[Tweet “Sometimes we know a person isn't a good fit. We don't let
them go because of fear. Letting that fear drive your decisions can be
costly.”]
What stops us from making that final call is often fear. Fear that
the confrontation will be ugly. Or fear that we'll end up having to do
all the work they used to do. That fear stops us from making the call,
and we end up paying for it all year long.
Of course, if we're talking about fear, that brings us to the next strategy that often freaks us out!
2. Raise Your Prices
There are very few faster ways to drive revenue and profits up than
to raise your prices. But even just the idea of raising your prices
could lead you to insomniac status!
Give People Advance Notice
Raising your rates can be scary. One of the ways to get past your
internal fear is to make the pricing change announcement with a future
date. You tell customers in January that your rates will go up in June.
When you do that kind of thing, you'll get to see, first hand, how
many customers react (ask questions, tell you they're leaving, etc.).
It also respects your customers (and future customers) by giving them time to make plans.
One little trick if you're going to grandfather (some) existing
accounts (which I'll cover in a second), is that you might see that a
price increase announcement can actually drive an immediate revenue
boost.
That's crazy, right?
But the logic is sound. People hear that your prices are going up in
July, for example, but that if they sign up now, they'll stick with the
lower price. What happens?
People sign up right away! You drive revenue and profits up by
announcing a pricing increase (even before you increase your rates).
It's Called an Assumptive Close
Notice that in the last step, I told you to make an announcement.
What I didn't say was that you should do a survey. You're not asking a
question (“Will you be ok if I raise my prices?). Instead, you're simply
letting people know the prices are going up.
It's called an assumptive close.
One of my coaching
clients did this throughout 2022. They sent the announcement. In it,
they told each customer what they had been paying, and what the new rate
was going to be. Lastly, they told them when the change would be made.
Then they waited. And they were seriously nervous.
As you can imagine, it was a non-issue.
Raising rates can be scary. I get it. But what you discover
when you work with a lot of agencies and product companies is that many
incredible companies are undercharging in a serious way.
They're doing amazing work and customers “get it.” So the pricing
announcement doesn't freak them out like you initially imagined it
would.
Consider Grandfathering Some Customers
When you change your prices, you have an option to leave things “as
is” for your existing customers. This is what is meant when people talk
about grandfathering your customers.
But what is often suggested is an all-or-nothing approach. That's not
the only way to think about pricing changes. Sure you can grandfather
everyone in – but that may continue business model mistakes you've
noticed in your company. Or you can change the rates for everyone, and
some of your oldest customers may decide to move on.
You have another option.
[Tweet “You can choose which segments of your customer base get the same prices, while which customers get the new pricing.”]
You can choose which segments of your customer base get the same
prices, while which customers get the new pricing. And it can be based
on different variables (not just how long a customer has been a
customer):
- Longevity (Initial Purchase Date)
- Lifetime Value (Total Amount Spent)
- Low Effort (Total Number of Support Tickets)
You do this by sending two announcements. The first tells everyone
that a price increase is coming. The second is to the segment that gets a
lock on their pricing, and you explain why (“You've been with us for so
long,” or “You're almost completely self-reliant”).
I'll be honest, these are the two strategies I see most people use when they want to grow profits. But I have four more for you.
Ready?
3. Create Multiple Offers
When I first started coaching, more than twenty years ago, I had one
program. It was two calls a month. That's it. No other options.
[Tweet “Different kinds of customers buy different things –
information, instruction and impact are different goals and suggest
different offers.”]
But some clients wanted more time – one call a week. Others wanted less – one call a month.
These were different kinds of customers. Like I said in a different post on course pricing, these different kinds of customers were buying different things.
- Some people just want information – $
- Other people want instructions – $$
- A few folks want impact – $$$
When you understand what a customer wants, it's much easier to craft multiple offerings that match their desires.
[Tweet “Crafting down-market and up-market offers allows people to better align with what you're providing to them.”]
If you want to grow profits in the new year, pay attention to the different goals that your prospects have.
Notice that I didn't say, “create different offers” – that will come
later when we talk about multiple revenue streams. What I'm talking
about now is simply shaping your offer to allow more customers, in
different places, to onboard more effectively.
Crafting down-market and up-market offers allows people to better align with what you're providing to them.
4. Build New Revenue Streams
Let's assume that your core revenue comes from a product or the
service you sell. If you want to grow profits this next year, it could
come from additional revenue streams you haven't yet created.
Before I step into this, I know what you're going say. You don't have
the time. You don't have the resources. There's no chance you could
introduce a new product or service right now. I get that.
But one of the things I see a lot is that the time you could have,
that you already have, is just being spent poorly. Now, that can sound
harsh, so let me ask a question to help you think about things
differently.
What kind of return have you seen on the way you spent your time this past year?
[Tweet “If you've not been connecting the dots between your efforts
and their specific results, that's a good first step in seeing how your
time is being spent.”]
I'm guessing that sets the context in a different light. What you
might say is that you can't know that answer because you haven't been
measuring the results in that way. You've not been connecting the dots
between your efforts and your results in such a specific way.
Every single hour you have spent has been in the service of getting a
result. We can agree on that. So if that's the case, it's a good start
to connect those dots and see if the time you've spent on various
initiatives has paid off.
Your time, however you spent it, is an investment. If you had made a
direct financial investment, you would measure it, right? So treat your
time and energy the same way.
You'll find that the extra feature you spent months on maybe didn't
shift the trajectory of your revenue. It might mean that growing profits
won't come from building one more (or ten more) feature(s).
Suddenly you might discover that you do have the time. That making a
choice for driving revenue growth this next year might mean less time on
features and more time on other things.
And that's when we're ready to look at four other opportunities for you.
Books / eBooks
You don't have to author a 200-page book to generate revenue. Take a
segment of your customers, define a specific problem they face, and then
write up your approach to solve it. At minimum it's an easy-to-read
eBook.
Want to turn it into a printed book? There are tons of resources
to make that happen online without a formal publisher. And you can even
do print-on-demand so customers can find it on Amazon and order it (and
then have it printed).
Events / Conferences
I already mentioned my business conference above (CaboPress).
It is a perfect example of building an event or conference for your
audience that doesn't have to be huge (mine tops out at 60 people).
Again, the goal is to grow profits. So I'm not talking about creating
an event or conference that costs you more than it makes. Use what you
have access to (a friend's vacation home, etc.) to create something
small that you can grow over time.
Coaching
One of my favorite suggestions to folks who are already building agencies or product companies is to consider their “sawdust.”
Particleboard is like wood, but is made up of sawdust. So the
by-product of woodworking, which would normally be considered waste, is
used to create another product that can be sold.
I think many folks can look at the learnings that are a by-product of
their agency or product company and use it to grow profits – by simply
charging people for it. Coaching is a great way to do that!
Memberships / Content
It's never been easier to create a mechanism to store your content, protect it, and charge for it. In other words, a membership site.
Even though Gumroad has decided to
raise its rates dramatically (which removes them from any
recommendation I might have shared), you still have tons of options:
- Podia – an easy way to do this without building your own website.
- Use Memberstack with Webflow – another no-coding solution.
- Use WordPress with plugins like SureMembers or Paid Memberships Pro
The bottom line is that making a recurring subscription solution for
your membership content used to be a lot of work and today it's not.
5. Focus on Goal Accelerators
Creating multiple offers (#3) was about creating on-ramps so that
people who might not be ready for your main offer could still be
engaged. It also was about profit maximization for those who wanted more
of your offer.
Think of this option as the ability to buy a small cheeseburger
or a double quarter pounder when your main offering is a quarter pounder
at McDonalds.
Creating multiple revenue streams (#4) was about looking at your
by-products, and seeing which might become good additional opportunities
to grow profits.
Think of this option as the ability to buy a soda, or shake. It's
not your main offering (the burger), but who would eat those fries
without wanting a drink?
But those aren't the only directions you can look to drive revenue
into your business this next year. There's a third move, and that's Goal
Accelerators.
The simplest way to explain a goal accelerator is to understand why
someone hired you to begin with. Let's assume you walked into a fast
food place. Why did you stop there? Maybe, and this is just one
direction we can take this, you stopped because you wanted a quick meal.
Speed was your driver.
But speed doesn't necessarily mean you no longer care about your health. So what could McDonalds sell you that would excite you?
They'd have to understand your goal (speed) and then create an offer
that works but moves you closer to the rest of what you want (hence the
term Goal Accelerator). It doesn't mean you won't eat a burger. But
maybe instead of fries, maybe you get a small side salad.
Goal Accelerators can look like main offerings, but often they're
not. They're the add-ons to your main product that take into account
your goals and get you further down that road.
If you've ever purchased a car, you've likely gone to the back room
with the finance guy who is ready to sell you a lot of different
options. Most of those options are crafted to sound helpful to you
(pre-purchase your maintenance, ding and dent coverage, undercoating,
extended warranty).
They're designed to connect with what you care most about (price,
cost savings, etc.) and offer you a solution that sounds worth the
money.
It's just another way to drive revenue into a dealership, and a smart
way because it doesn't require them to do a “hard sell.” Instead, it
can feel like a really neat way to help you out.
Imagine the pitch.
“I know you've found your car and the sticker price is where you
want it. Your monthly cost is going to be X. But for just a few more
dollars a month ($35), we could pre-pay your next five years worth of
maintenance appointments. Those are normally a thousand dollars each
time. So instead of having to come up with that money right then, we'll
give you a discount on the work and finance it. What do you say?”
You can reject the offer. But for some people, that sounds brilliant.
They care about cost. Here's a way for them to save even more!
Goal Accelerators all benefit from not having to be hard sells.
You've never walked into an Apple store to buy a new phone and
complained about adding a screen protector or case, right?
6. Leverage New Audiences
Ok, last strategy for today. Here's the story for how I discovered this one.
I was invited, at the last minute, onto a podcast recording that
would be recorded in a week. It was one of those video shows that was
recorded live with an audience, and then saved and available for people
who subscribed to the feed.
The podcast host told me that I
could pitch one of my offerings at the end. The only problem? I had no
offering. Nothing that was easy to offer and aligned with my topic.
So I created an offering. I knew our topic and the stories I would
share. We'd be talking about storytelling anyway, so it made sense to create a quick course.
We recorded the podcast and we ended with my pitch. I shared details
about how they could order my course and then I moved on. I literally
did nothing else. No additional promos. No email follow-ups. Basically, I
was the worst.
But we've all been there, right?
And when the year was wrapping up, and I was looking over my revenue
streams, which one do you think shocked me? That's right. This little
course I had recorded and created in less than a week. Not because of
me. Not because of anything I did that was amazing.
What worked was crafting a solution for Lisa's audience.
Now, you might think that it was a fluke. But I did it again for another podcast with another person's audience.
Does it help that Lisa Larter and Chris Brogan are amazing? Sure.
Don't do this with someone who doesn't have an audience. That doesn't
make sense.
But also, don't imagine that it's something special that requires you to create lots of online courses. My buddy Joe just announced a 20+% growth rate from doing this very thing.
He runs his own podcast and did podcast swaps (both promo swaps and
feed swaps) where he partners with another podcast to leverage each
other's audiences.
The results are always the same. Because the underlying reality is
that everyone's audience always wants more. So introducing someone new
to them is good stuff. It's additive. And we all like new stuff. So we
check it out.
[Tweet “Leveraging other people's audiences works because that audience wants new stuff (as much as we all do).”]
So there you have it – 6 different strategies that should help you
drive revenue into your business. All focused on helping you grow
profits in the new year.
