At the end of the day, if you're not making money, you can't keep doing what you love.
Worse than that, you can't support the staff, contractors, and vendors you love, the causes and charities you love, and you can't provide for your loved ones.
So here's how to bring in more money without bringing on more staff.
Raise Your Prices
"But Wes, it's tough out there. Competition is cut-throat. Overseas manufacturers will do the work for pennies on the dollar. Unethical vendors here rip off what I do and sell it at half off. There's no way I can raise my prices."
I'm writing this from a nice room in a Marriott in Woodland Hills, CA, where 50 people have paid $15,000 and have flown in from around the world to spend eight days learning how to create a bigger impact in the world. (That was Sept 13, 2016.)
So not only are they disrupting their businesses and their lives for eight days, they are disrupting their bank accounts by $15,000 + $500-$1,000 on travel + $1,600 on lodging + $400-$700 on meals, and many will spend an additional $5,000 to $25,000 while they're here on additional coaching and consulting.
Money is bountiful. It's your thinking that is not.
In any and every industry, there is the low-cost provider, the mid-range provider, and the elite provider.
Like walking down the middle of the road, the mid-range provider eventually gets run over. Only the high and the low survive.
That being said, the next way to make more money is to...
Lower Your Prices
"But Wes, ahhhh...did you not get a good night's sleep in that Marriott? You just contradicted yourself."
If you are either the low-cost manufacturer and/or you have the means to survive a hit to your cash flow and want to go grab market share and make it up on volume, slash your prices, and sweat out your competition.
This can be a key strategy for putting the screws to your competitors in a time of disruption and not only stealing their key accounts but their key personnel as well because, like a submarine going deeper underwater, increasing pressure quickly identifies the weaknesses in the structure.
When your competition starts to break, it's usually the top performers who don't play games and, therefore, don't have the political connections at the company who leave first.
PRO TIP: Rarely is it a good idea to simply lower prices and create the impression in the marketplace that those prices are the new norm. You must put safeguards in place that explain the rationale, the "rules," and the timeframe of the price adjustment.
For example, maybe you got a price break from a supplier who had a fire at their overseas warehouse, and rather than throw away the raw material, they passed on great savings for a larger-than-normal order today.
Or you offer lower prices in return for larger orders.
Along those lines, you could accept a purchase order for the larger amount today and allow the customer to spread out delivery of the orders over the course of the next quarter or even the fiscal year, and they simply place orders against the P.O.
That's a great way to cut into the future sales of your competitors and create a predictable pipeline during the timeframe of the P.O.
Announce You're Raising Your Prices
When a new quarter or new year is fast approaching, inform your best customers that you have good news and bad news.
The bad news is your prices are going up. The good news is they can place an order now for any amount at the current lower price, and you'll honor it.
Those who really like you and value the goods and services you provide and who plan on sticking with you for the foreseeable future will jump on this and pre-pay you with a smile on their faces.
Offer a Discount...
Yeah, Yeah...and No, No.
Yes, I heard you before, and No, I did not get a bad night's sleep. Allow me to explain again.
If you have a product that is more than a few dollars and accept payment plans, consider offering a discount if they pay it all upfront.
For example, let's say you have a $20,000, 6-month consulting package that allows the client to pay in five equal installments of $4,000 each.
Experiment with offering a 10% discount—$2,000 off—if they pay the entire $18,000 upfront.
You'll be pleasantly surprised at how many of them take you up on that offer.
PRO TIP: When offering this type of discount, have them pay you by check instead of credit card to lessen the impact on your bottom line. If you're paying 3% on the $20,000, that's $600 in credit card fees, which makes your net $19,400.
When you accept $18,000 from your client by check, they save the full $2,000, but it's only a $1,400 net discount to you. Not only that, the headache of chasing down payments goes away entirely, which is worth its weight in gold!
Add a Financing Charge
Similar yet different to the concept above, let's say you offer the same $20,000 consulting package for six months of training, and that's your final offer.
For those who cannot afford to pay the entire amount upfront, apply a finance charge of whatever amount the market will bear.
Maybe you get five payments of $5,000, which would be a 25% increase over your asking price for the privilege of your clients being able to work with you immediately and begin benefiting from your services before they finished paying you, thereby creating another win-win.
Make It Easy To Get Paid
American Express has large fees. PayPal can be a pain in the butt. Wire transfer fees can be costly as well. Accepting checks can delay things until it clears.
I get it.
I also get paid.
I make it easy for my customers to pay me, and since I know what I'm worth and I know how to convey that worth, I can raise my prices by 5% or 7%, or 20% to offset the fees my merchant account charges me.
Do you really want to lose a $5,000 sale because you didn't want to pay an extra $35 or $55 to American Express, and that's the only card your almost-customer wanted to use, so they bought from your competitor?
Be smart. Collect the cash. It's the only reason you're in business.
Need some help finding out how to raise your prices?