4 Tips to Help You Build A More Profitable Business
I asked Geraud Staton — an entrepreneur, coach, and oil painter to speak to the 2019 cohort of the FYSO accelerator on how to build a profitable business.
Geraud is the Founder & Executive Director of the Helius Foundation, which is focused on working with necessity-driven entrepreneurs. Geraud specializes in helping entrepreneurs get to the place where they are making a living wage and is great at giving practical advice about all of the minute details that come with building a thriving business. Geraud is also passionate about leveling the playing field when it comes to minority and women-owned businesses and this passion shines through his work at Helius.
Here are 4 tips to help you build a more profitable business shared by Geraud:
1. Price indicates quality
Most entrepreneurs think their customer is them. More specifically, they think that their customer has the same wants and needs they have.
However, the person you’re selling your goods and/or services to is 9.99 times out of 10 not YOU.
Don’t keep dropping the price of your offerings to “win” more customers. You deserve to get paid.
Instead, find the right customer persona that knows the worth of your goods and is willing to pay for them. “You sell out of your own comfort zone quickly.” Geraud has sold paintings for between $1500 to $2000. The first time he sold a $2000 painting he was shocked, but he learned the worth of work and immediately changed his prices on his website.
One of Geraud’s art mentors once told him, “If you raise your prices 10% and lost 10% of your customers, you make the same amount and do 10% less work.”
Don’t be afraid to raise your prices and sell to customers that are willing to invest in the value of your work.
2. Find support: Whether that be a partnership, advisors, or some form of support (interns, consultants, or implementers)
To build a business, you need support and accountability.
It is great to be a visionary but, if you’re not careful, you’ll come up with many great ideas and never implement any of them. The same goes for the alternative — even if you’re great at implementing solutions for your customers, it can still be beneficial to get high-level strategic support from visionary, big-picture thinkers.
If you’re considering finding a partner for your business, know that you have options:
- You can find a long-term partner. If you go this route be very careful in how you approach this process. A business partnership is very similar to a marriage.
- Alternatively, you can search for a partner that can support you for a specific period of time during your organization’s journey. You can bring in that person for a percentage of ownership, shares, or you can profit share for a certain time period.
Another option is if you’re at the place where you can afford to hire some, then hire someone.
Keep in mind, normally you need $150k — $200k in revenues if you plan to hire someone full-time. If you’re not there yet, consider finding support by hiring part-time contractors.
3. Take how much you want to get paid and then multiply that by 3 to determine how much revenue you should be targeting for your business
One mistake Geraud often sees entrepreneurs make is thinking that their revenues are the amount of money they will be able to pay themselves.
Geraud explained that if you want to make $50k, you should be targeting $150k in revenue: if you’re building a scalable business then it’s very likely that $50k will go to you, $50k will be invested back into the business, and approximately $50k will go towards taxes.
4. Focus
Geraud shared his version of this Warren Buffet pilot story and points out the importance of truly being intentional about what you focus on. At the end of the day, strategy is as much about what you say NO to doing as much as it is about what you say yes to. Your time is valuable, it is essential to focus it on the most important things.
It can be challenging to stick with focusing on THE top 5 key strategic goals and ignoring everything else… but it’s a proven strategy to ultimately becoming successful.
If you’re interested in learning more, you can watch our full interview here.
Originally published at https://christinamarienoel.com on September 23, 2020.
