Simplify your product offering to boost your profit
Monday, January 09, 2017
It is difficult for small business owners to pass on any opportunity to make a few dollars. We take any job that comes along and hope it will turn a nice profit.
However, many times these are the jobs that bite us in the proverbial rear end. We often do not know the pitfalls or problems that can occur. And we end up spending too much time — or worse, dollars — to fix the issues.
But there is a surefire way to avoid this problem: Simplify.
If you focus your efforts on a small set of products/services, you can become an expert on the subject matter. When you are an expert, it becomes much easier for you to accurately quote a job.
This makes it possible to avoid the issues that have you up at midnight before the deadline trying to figure out how to get a job done. And you can avoid the costly mistakes that leave you losing money (or not making what you should).
So how exactly do we go from the "jack of all trades" to the "profitable provider of products"? It takes three simple steps: evaluate, focus, grow. It is really pretty easy — having the discipline to follow it through is the difficult part.
Exactly how do you figure out which products you should specialize in? Simply look at the jobs you have done in the past.
Look at how difficult they were to produce or broker out. Compare how much money was made on those jobs. Look at what your competition is offering. Is this product unique in the marketplace or something that is a commodity?
Ranking your past jobs and the market opportunities will help you quickly narrow down your list.
Once you figure out the 5-10 products or services you want to offer, you can now focus on learning more about them.
Go to the internet and search the product. Search trade groups and industry magazines on the topic. Take the time to investigate the competition, and how you can match them or beat them.
Be a sponge! Your goal is to learn everything you can on the subject. Become an expert. Customers love experts.
Now that you have the focus and knowledge to sell your products, get out there and sell. Find out who uses these products. Make your pitch and grow the business.
In the beginning, you will need to charge prices in line with your competition. But as more customers use your services and realize what a great job you do, the more they will tell their friends. And when customers realize you are an expert, you can slowly raise your prices and increase your profitability even more.
The nice part is that once you become an expert on your small set of products, and business is going well with those, you can then start to add more offerings. If you start simple, you can build the profitability you need, pass on the jobs that take too much time and become a profit-generating machine.
I understand how difficult it can be to pass on any job — especially if business is slow or you are just getting started. But in the long run your customers will be satisfied, your mistakes will be reduced, your prices will rise and your business and profitability will grow.
Sounds like a winning proposition to me.
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