Perhaps you’re reading this article because you have trouble understanding your pricing structure. Or you feel like you have run out of time to onboard or even take on new clients. Maybe you are working a lot but not believing you are generating enough revenue. You could feel overwhelmed with a massive list of things to do that don’t seem to be impacting your bottom line. You are witnessing others in the industry appearing to do exceptionally well, meanwhile you have inconsistent months, unsure where your clients are coming from and are even nervous to raise your pricing because you worry about losing the clients you do have, ultimately capping your income potential.
If any of these situations are true for you, first please understand that you are not alone. These are actually quite common growing pain points for most, if not all, entrepreneurs. Second, this article is written for you.
There are three modes you as a business owner can engage in to make money. The first mode is to get more clients. The more clients you get the more income you can earn. However, at some point you can run out of time to take on more clients.
Thus, you enter into the second mode which is to get better clients. Having better clients just means clients who are willing to invest more. The idea of raising your rates conjures up the fear that you will lose some clients. But what if that was not a bad thing?
For example, let’s assume you charge $50/hour and have 20 clients. That nets you $1,000. If you raised your rates to $60, assume you lost 3 clients. Now you have 17 clients at $60/hour. You are still making more at $1020 while working less. If you raised your rates to $70 and assuming you lost a quarter of your clientele, you would still be making more while working 25% less time!
Remember, you are not just selling your experience. You are selling the outcome, result and transformation that you provide to your clients.
In addition, when you charge more, you actually command more of an investment from your clients beyond financial. They tend to invest energetically and emotionally in proportion to their monetary investment.
The third mode for entrepreneurs is to create additional revenue streams that do not have a direct relationship to time.
This can include, but is not limited to, low-ticket sales, high-ticket sales, partnerships and special bundle sales. This is not about spending all of your time creating new products and services, it is about looking for opportunities to increase your revenue margins by making a few key additions to your portfolio of offerings.
For example, I had written an e-book that I sold for $30. After I sold a few hundred units, I created an affiliate program where others could make 50% if they sold any books through their URL. That alone generated hundreds of new sales that I would not have made otherwise. I then wrote a second e-book and bundled it with the first for a packaged sale of $40 and sold even more. Years later, I turned the e-book into a digital course at $30/month in perpetuity. That is how I took a $30 and turned it into a six-figure business.
Another example, in 2015 I created the FITposium conference and sold 55 passes at $69 each. The following year we tripled the attendance while increasing the rates to $100-to-$150 and added in paid sponsorships. In 2017 we added in another tier of passes and increased pricing of the general admission passes. That same year we started doing branded merchandise sales. In 2018 we increased the price again, added in even more sponsors with an expo, included book sales and opened up sales for an exclusive mastermind. In 2019 we grew the attendance yet again in addition to selling our monthly membership and mastermind from stage. This is one single idea that led to a bevy of revenue sources.
I share these two examples with you to get your creative brain in gear to think about ways to diversify your income streams.
This could look like you adding a low-ticket sale to your core offering. Something like a course, challenge, book, webinar, guide or the like. Something with high value but a low investment. The goal is not necessarily to make a significant amount of revenue from this one item, but to use this item as a stepping stone for those who are not yet ready to invest in your core offer.
You could bookend this with a high-ticket offer (something north of a $2,500 investment) for clientele that are willing to invest in the most exclusive access or the most transformative experiences.
Another option to explore is a recurring revenue model such as a monthly membership so you can create predictable income on a regular basis.
The point is that additional revenue is closer than you think through slight additions or remixes to your portfolio of offerings.
James Patrick is an award-winning photographer with more than 600 published magazine covers, entrepreneur coach, podcast host and best-selling author of Fit Business Guide: The Workout Plan for Your Brand and Fit Business Online: Establish, Market and Profit from Your Brand in the Fitness Industry. His work can be seen at JamesPatrick.com/Coaching or on Instagram @JPatrickPhoto.