Hi. I want to ask you a question.
Are you setting your business up for long term profitability?
My name is Michael, and I'm the CEO of Thank You Media, and I want to take a minute just to really profoundly ask you that question. Are you actually setting your business up for long term high end profitability?
A lot of businesses when they construct their profit margins, may build their businesses and their whole pricing matrix, that actually forget about long term profitability and the simple, simple, simple solution to making sure that happens. And you want to know what that simple solution really is? It's the thing that a lot of business owners hesitate to do because they often feel like, man this is going to drive clients away from me. I'm gonna now ... I'm gonna do this and people are gonna be worried, they're gonna want extra value when I do it. They're gonna go somewhere else, they're gonna go to my competition. Business owners often create this really big fear around this simple thing, and it's absolutely necessary. Because everything else around you goes up in price.
Therefore your services and your product must do the same.
The answer to have really excellent profitability in your business long term, is systemized price increases.
Always, always, always set a date, set a strategy in your business about how you're gonna systematically continue to increase and raise your pricing over the course of months, perhaps just a few years out. So that you're maintaining the value that you can offer to your client because you're maintaining the profit margins that make your business successful. One of the biggest challenges that a lot of business owners face is they don't systematically continue to raise their price.
I know that when I took over one of the businesses that I now own, the pricing had been where it was for nearly eight years. And it was about 25% below what it's market value was, at other businesses delivering that same service to really the same client. 25%. But man oh man, I would way rather serve clients in an appropriate way at the proper pricing range than under serve more clients at a price range that's no longer profitable. And that's the real test of the metal here. You have to ensure that you're rhythmically giving yourself and your business that profitability so you have to systematically improve your prices.
And that could be that every six months you go through a pricing adjustment. Right. In some of my businesses, I work with manufacturers, they price adjust every quarter. You're gonna see price increases, almost every single quarter from these businesses as their manufacture costs go up. They pass those costs along to us as the retailer, and then we pass those price increases along to our clients.
The same thing must exits for you. Now a lot of solopreneurs go, well it's just my time why do I need to take the prices up. Whoa, whoa, whoa, whoa, whoa. Your time is the best thing you have to offer people. Therefore it must also systemically go up in it's value based on the fact that everything goes up in price; it's just the nature of the beast, right. The nature of our economic structure. Prices go up.
So I encourage you take a look at a full next year of your business, and put down some price increases, to make sure you're sustaining a long term profitability which means business health really. Make sure you've got some systematic price increases inside your business, so that's you're always, always, always going, okay this time, we're gonna raise our prices 5%, at this point six months from now. Another 5% at this point in six months from now.
And you can let your clients know this is when we're price increasing and this is why. And they'll be way more accustom to it as you go. Alright. Hope you got great value out of this.
Thanks so much for watching, once again Michael here from Thank You Media.
PS. Remember, Thank You Works!
Hi, Michael here from Thank You Media. A few years ago I spent $20,000 on a single marketing campaign that brought in only $3000 in revenue. The next year I spent $20,000 on a single marketing “strategy” and brought in over $285,000 in revenue.