For many small businesses even making a mid-range five-figure income seems to be an unobtainable goal. BUT, I have some really good news. Predictably the cause of this is because you’re not using revenue STRATEGIES as a corner-stone for your business model. If you are interested in making a six-figure income there are 3 simple revenue strategies that work to make more money with your business because they work with every business.
Okay, there are typically 4 revenue models that businesses use but the one many use DOES NOT WORK if you want to have a business you love. If you are experiencing discouraging financial results with your business, I suspect you are using the Employee Revenue Strategy. It is not so much a strategy as it is a game of chance. You do a little marketing, make some sales and basically make money with little or no intention behind it. It is neither planned or unplanned. If I were to ask you “Did you intentionally go after a targeted income amount?” and you could not answer “yes,” then you are operating under the “employee” revenue mindset. You’ll have to break free from this employee revenue strategy first to make more money with your business.
For most of us we simply don’t know any better. How could you? There is a real dearth of financial training for business owners. During our early growing up years we were being taught to be employees not business owners. Being taught to be “happy” to get paid for some of our time. Think “allowance.” Why were you paid? Did you have some chore your parents said was tied to your allowance? You just had to do what they wanted, and they paid you. Bet you didn’t think much about it. Now think about how it works for employees. A business owner hires you to do a specific job and they pay by the hour and you are “happy” to have it. Or are you? For me, my experience was that what I could do or have with this revenue was truly limited and there was very little I could do about that. I could work harder and hope my employer would pay me more money but it was always in their hands, not mine. What about you? Are your results less than satisfactory? What does your “now” look like? Is your financial future wide open or limited? Is your financial future in your hands or someone else’s? This is quite the usual result of the Employee Revenue model.
So, WHAT does work to make more money with your business?
There are 3 financial models any business can use that come from intention. While they take strategic planning, they are relatively simple and consistently produce results.
The Lateral Revenue Strategy, is the one most business owners use and it is a very good one. It is both effective and works extraordinarily well but it can eventually “cap” out before you achieve your financial goal (you do have one don’t you?). It is easy to implement and typically delivers the results needed now and can help you lay the groundwork for future growth.
How it works is that after calculating your revenue needs (see my Income Calculator blog post here and download my free Income Calculator here), you ascertain the rate of pay you need for the hours available to do billable work or the amount of product you can produce and deliver. Pretty straight forward right?
The downside is both the service provider and the product producer will find there comes a time where they cannot competitively charge more, work more hours or produce or sell more product. While it allows for easy forecasting for today and tomorrow, there comes a time where more is just not reasonably in the cards if we are going to have life we love. Future growth can be scaled by hiring employees but this strategy relies on an ever-growing customer base to remain sustainable. In smaller communities it may not be realistic to rely on this model.
If the Lateral Revenue Strategy serves your needs and aspirations that is FABULOUS. If it does not, you can CREATE MORE money with your business with the Spiral Revenue Strategy which calls for a little creative thinking and pre-planning. This is a highly desirable strategy to implement because its very design supports future growth because by its very design you sell more to your existing customer base.
Your product or service works most effectively when it solves a problem or is very desirable and of good value to your customer base. You want to get your pricing to that place where it encourages a quick, easy sale. Your customers come to know you and the value you offer and happily do more business with you.
That’s where the pre-planning comes in to play. You will need other related goods or services that will be of interest or needed by your existing customers. Since they already have a relationship with you and their value experience will renew with each purchase, they will come to you rather than a competitor.
Lastly, there is the Funnel Revenue Strategy. It has some of the same benefits of the Spiral Revenue Strategy in that your customer base buys more because they know and trust you. How it differs is that instead of buying some different but related product or service, they have to buy more of the same to meet their same need. Think subscription or add-on services.
While this is a powerful financial strategy capable of producing 6- and 7-figure incomes, your customers must get their needs met otherwise they really will look elsewhere. An example would be Intuit (the makers of QuickBooks – with which I have a love/hate relationship). They have a superior product, but the basic versions are quickly outgrown so a business needs to upgrade to get the needed features and it costs more money. Monthly subscriptions are relatively new for QuickBooks. Here again their basic monthly fee starts out small but by the time you upgrade to get additional features to meet your needs it can really add up. They suck you into a funnel. However, you, too, can make more money with your business intentionally under this strategy.
It takes more than knowing about financial strategies to have a business you love. You have to implement them! If you are ready to stop having less than satisfactory results and ready to start being compensated for the time you invest in your business, then don’t wait any longer. Do something. Call or email me and let’s get an appointment to discuss how your business can use one of these strategies to bring in more revenue now and set in place the financial cornerstone you need to have a life you love. Let’s do this!