There are many, many handmade creative product businesses. Whether you make jewelry, paint pictures, created wooden or porcelain gifts, or make something else, you are a creative product business. I have clients who make soaps and lotions and clients who make artwork and gifts. I find there are a few key areas where creative product businesses lose money, and I have a few tips to help your business stay profitable.

 

Creative Business

 

 

 

Tips for Creative Product Businesses

 

 

 

 

Know your actual costs to create your product and include your labor

 

  • Include all the items it takes to create your product, paint, paper, beads, yarn, wood, labels, shipping boxes, lotion bottles, etc. and your operational costs. For my easy formula for pricing anything guide visit:  https://entremoneycoach.kartra.com/page.pricing .

 

  • Calculate how long it REALLY takes you to create each product, and then calculate your labor cost, per piece, that you want to recover in your pricing. Don’t shortchange yourself, the number is the number. Make sure you have the true costs so you can make pricing decisions that reflect your actual time spent.

 

  • Make sure to also include your shipping materials, tissue paper, bubble wrap, stickers, boxes, and any other items you use to ship your items above actual postage. A flat handling charge may be a good, transparent way to do this, or if shipping is included, add it into the price.

 

  • Finally, know your fees for Etsy, Shopify, eBay, etc. if you use any of these selling sites. These can take a pretty significant chunk of profits if you use all their features and advertising offerings. Think also about the table at the fair or the farmer’s market booth. You must consider the cost to sell your product in your pricing.

 

 

 

 

Have a custom option available for customers and charge appropriately

 

One way to increase the price of an item is to have a custom option available. I’ve worked with clients who personalize items, and clients who create custom items for occasions such as weddings. Having some sort of customization available for people to buy can increase your revenues and margins. This can also be a way to resell to customers who need your custom item again in the future, such as for gifts.

 

You need to charge more for the extra time to tailor the product to your client’s specific wishes. Anytime you veer from a standard item, you need to have a charge. Whenever someone orders something custom, please get a deposit. It doesn’t have to be half, it can be a smaller percentage, but get some financial commitment from the buyer before you start creating your one-of-a-kind work.

 

 

 

 

Watch your discounts, coupons, and bonuses

 

I see creative entrepreneurs constantly markdown items, which cuts into the profits.  A coupon for signing up for the email list, then free shipping, then a bonus trial size, then some other thing, and all the sudden you lose money on the sale. I know that many, many people try to compete on price in the creative space, but what you create is unique because you create it.

 

I don’t recommend discounting items often, or buyers will expect them and just wait to purchase until you markdown again. Offering a 10% off coupon with a newsletter signup may be ok, or even a free shipping option on a minimum purchase. Just make sure you have the margin to offer them. I worked with a client one time who barely broke even after offering her discount coupon, after the Etsy fees and advertising costs.

 

 

 

 

Have policies on product changes, returns, and refunds, and stick to them

 

Things can happen in shipping, the item ordered may not be exactly what the customer expected, or there may be another reason for items to need replacing or returning. Protect yourself with clear policies on shipping and tracking shipments, how long you will accept a return, and when an item will be replaced at no or little charge.  Create a policy that all sales are FINAL on custom items.

 

When people order products online, they have several guarantees offered by payment vendors such as PayPal. They can begin a chargeback or complaint and receive their money back- from your account.  Unless you have clear, understandable policies in place, you probably will lose any dispute and be out however much your item cost plus the additional vendor fees. 

 

There is always a demand for beautiful handmade items for gifts or for any occasion.  I know someone who buys a great pair of new handmade clay earrings every other week. She just loves them. Too many creatives under charge for their items and lose money in their business. Following the tips above will help you stay in profit and have the money to keep on creating what you love. Do you have a specific question related to your own business? Reach out and let’s chat!

Do you have a food business? Whether it is a cottage business like a home bakery, or a restaurant, or takeout place, there are a few key things you can do to stay in profit in your business. Here are some financial tips for food businesses. 

Food business

 

 

Financial Tips for Food Businesses

 

Know your real food costs on everything you sell and have good margins

 

  • Make sure you calculate your food costs, don’t guess. Take the time to know what it really costs you to create that dish or bake that cake. All the costs involved. Include costs of packaging, labels, and labor, to calculate the true prices. Consequently, that container adds to the cost of delivering the food, as do any food labels– whether it is served in-house or sold online.

 

  • Don’t forget operational expenses and waste costs in your pricing scheme as well. For instance, every business has fixed operating expenses such as rent, internet, and phone. However, as a food business, you also must include waste and other costs like linens, that other industries do not have to include.

 

  • Watch your margins. If you are producing food products, I like to see 60% or better, if you are reselling items, I like to see north of 35%. You will save money, and will have higher margins, by buying ingredients and producing items in-house versus re-selling food that was already made.

 

Watch your inventory spend

 

It is VERY, VERY, VERY easy to overbuy inventory in a food business. In fact, suppliers give volume discounts. It is important to remember that any money you have tied up in inventory is money that you do not have available for other things.

 

Keep in mind how often you can get a delivery from your suppliers. Is the savings of $10.00 worth the additional $77.00 in your walk-in or freezer?

 

Good inventory management will allow you to have better cashflow. Knowing your top sellers and the items that need to be on a regular schedule of ordering will prevent the “feast and famine” orders swinging hundreds of dollars each week.

 

Have an emergency fund and keep debt low

 

Lots of things can happen that affect revenue in your business. If you have bad weather and your restaurant doors are closed for a day or two, or a shipment of your cookies gets damaged and needs to be replaced, it costs your business money.  Relying on the public to decide to eat out or order in on a given night isn’t always predictable. Keeping some cash stashed is a good idea to offset any lower revenue months. Typically, quarter one each year is brutal on food businesses. Having the money set aside to cover any income dips can be the difference between staying in business and not.

 

Along the same lines, keeping debt low is important. Most of the inventory in food businesses are perishable and aren’t available as collateral to take out an emergency line of credit if needed.

 

For example, the depreciation of equipment also can make the food business equipment a little riskier for the bank to loan on for full value.  In addition, not having a lot of debt in the business can also make a difference in the success of a food business in a slower season.

 

Create a sinking fund for equipment repair and replacement

 

Food preparation requires equipment. Ovens, fryers, stovetops, refrigerators, etc., are commonly found in restaurants and home food businesses. These pieces of equipment will often need regular maintenance, and at some point, replacement. Creating a separate fund early in the business where money is parked for these specific needs can ensure that if a piece of equipment goes down, the restaurant budget doesn’t struggle to cover the repairs.  This fund truly protects the business from expensive appliance repairs that must be made to keep the business running.

 

 

Author’s Note on Financial Tips for Food Businesses:

 

Using these tips will help to ensure that your food business operates with finances in the black. You can protect yourself and your business from the most probable money issues facing your industry by:

  • getting good margins
  • only having the necessary inventory
  • having an emergency fund and keeping debt low
  • saving to maintain equipment.

 

Did this blog bring you a bit more clarity?

 

Then visit our linktree below for some useful resources!

 

https://entremoneycoach.com/linktree/

Are you ready to form an LLC? I’ve seen quite a bit on social media lately about forming a Limited Liability Company to create a business. I want to remind you that not everyone needs to rush into creating one to have a business.  It can protect your personal assets from being reached to pay a judgment if it gets sued.  There are important decisions to be made about an LLC.  Make an informed choice based on where you and your business are at right now. 

 

business registration

 

An LLC has some great benefits. But, it also has some responsibilities that not enough business owners are aware of. 

 

Here’s the skinny on forming an LLC:

 

 

Form an LLC: It Creates a New Legal Entity

 

When you form an LLC, it creates a new legal “person” who will have its own legal identity. You and any partners become “members” of the organization. The organization is the “citizen” of the state where it is formed.  Typically in the state where the member(s) live. You are creating a new structure. It needs to be treated that way, even if you are the only member of the business. Depending on where you live you may need to renew your entity each year and file to keep your LLC in operation. Additionally, the LLC will have a separate Employer Identification Number (EIN) for taxes, and you must maintain separate bank accounts. 

 

 

 

Form an LLC: All the Business Income Belongs to the LLC

 

One of the biggest issues I see is that people create an LLC to protect their personal assets, which it can, but they use the LLC bank account as their personal piggy bank. In order for the LLC structure to work, and to protect you, the finances MUST be kept completely separate. The LLC pays you as the owner.  Either by a paycheck or through an owner’s draw. You don’t swipe the business debit card to pay personal expenses. Ever.  If you do, the courts can conclude that you didn’t actually treat the LLC as a separate person and that you are really the “same person” as the business, so they can go after your personal assets. It’s a little complicated and beyond the scope of this post, but I cannot stress enough how strictly you must keep the finances clean with an LLC. 

 

 

 

You May Not See Tax Benefits Until You Reach a Certain Income Level

 

Another reason to create an LLC is there can be some tax benefits to the business owner. Depending on the tax structure of the LLC, such as an S-Corp, personal income taxes are being paid on the income the owner actually takes as salary or draws, not on the income that is remaining in banks at the end of the year- which belongs to the LLC.

 

Tax structures and whether the LLC is taxed as a “pass-through” to the member’s personal taxes or as a separate entity is a little outside the realm of this article. But you may be surprised to know that the benefits may not be that great until you pass a certain income threshold. Until your business makes a certain amount in profits, the difference in the amount of taxes may be minimal.

 

 

 

 

Understand the Benefits AND the Costs

 

The many companies preparing and submitting LLC documents to the states are either assuming business owners know all the details, or they are focusing so much on the protection they fail to talk about the expense and the upkeep of creating a new entity. In some states, the renewals can be quite substantial. For one of my clients, her LLC renewal is $800.00 a year.

 

Weigh the costs against any assets that may be at risk, and of course any potential tax savings you could have.  Long story short, not everyone needs to rush into an LLC when they first start a business. Talk to a tax professional about any potential tax benefits, and know your state costs and rules before you create your new business entity.

 

Need free resources for your business? Check out our free resources! 

 

.I have personally fought the deep fear that I was going to make a wrong decision. I have lived with “analysis paralysis” and turning the same question over and over in my head while trying to figure out every possible outcome. It was exhausting and my business was also stuck. I finally realized that not making a decision IS a decision. I was choosing to keep spinning my wheels. 

 

What If You Couldn’t Make A Wrong Decision

 

Perhaps you have a decision to make that you just can’t. And it is keeping you stuck. Perhaps you have been holding off finding a VA or new software or marketing support. Maybe it’s a financial decision. Maybe it’s the decision to enter a new market or offer a new service.  I want to give you a quick and easy process you can use to help you make the decision. What if you couldn’t make a wrong decision?

 

The Cost-Benefit analysis for this is a simple tool. It shows you if the benefit of something in your business will outweigh the actual cost of having it.  I am a HUGE proponent of the cost/benefit analysis. But the cost/ benefit is a tool that shouldn’t keep you up at night.  I made the biggest mistake with this process by not committing to implementing the best course of action that the tool revealed.

 

 

 

 

I feared that even if I picked the “best” one, it may be wrong for the business. But what if I couldn’t choose “wrong?” What if you couldn’t? Your mindset has to be that you will go with the decision. The decision based on the knowledge that you have when you use the tool.

 

The easiest way to work a cost/ benefit tool is to sit down and handwrite all of the costs and benefits of the decision you are trying to make.  And you use this tool for each decision point. You can handwrite it on a piece of paper, or use a computer program. I am personally a pen and paper and coffee and relaxed environment kind of girl, but you do whatever will allow you to think clearly.

 

 

 

 

Be specific. For example, a Virtual Assistant will save you time that can be better available for money-making activities. Email Automation can make sure nobody who opts in for your newsletter falls through the cracks. And continue to list the benefits that you will personally receive in your business.  Then look at all the costs, financially or otherwise, of implementing the thing.  

 

Many times, when you write it all out, an investment is a “no brainer” and your business will benefit so much you need to add whatever it is, now.  On the flip side, if you are wondering whether to keep something in your business, you can use the same approach. If the benefits (be honest) are not enough to justify the cost, you don’t keep it.

 

 

 

 

Author’s Note:

 

But here is the key, you cannot get it wrong. When you use this tool with the best information you have, your decision is the best you can make at the time. Period. Not making any decision and spinning your wheels is a decision and one that isn’t moving you forward.  Try this tool the next time you have a business decision to make and commit to implementing what comes out on the paper. You will be amazed at how much stress is gone because a decision is made, a course of action is taken, and you can now focus on the next thing.  On one last note, rarely is any decision permanent, so move confidently on the best one that reveals itself to you the next time you feel stuck.

It is so much easier to make more sales and sell products and services to an existing customer than it is to try and find a new customer. In fact, there’s something called the “80/20 rule” that states 80% of your sales will come from 20% of your audience Once your customers and fans are in your world, they are more eager to buy your offerings than a cold or even lukewarm lead.

 

Make More Sales

 

So, how do we make sure we are serving and selling this 20%? By making sure all of your offers will be a good fit for your audience, give them multiple ways to buy from you, and giving exceptional service that will win you loyal fans.

 

 

 

 

Making sure your offers are a good fit

 

Nobody wants to be in the awkward position of offering something that no one wants to buy.  It’s important to talk to your customers, get feedback on your products and services. Don’t be afraid to run a beta test or provide samples of your new thing to your audience. I don’t suggest you give things away to just anyone. Have a way to qualify your customers, and when you find them, get their input on what you offer.

 

For example, I have a signature 6-week group program to help entrepreneurs grow their revenues and profits by focusing on one plan for a short time.  This particular approach didn’t work for one of my clients, who felt that the every-week meeting was too quick to allow her to implement the next step in her plan.  She wanted two weeks between meetings to give her more time to work on her plan. 

 

This request created a 12-week program and is a great fit for certain businesses who need to focus on growth over a quarter. By taking the time to listen and adjust my offers, she works with me over and over when she needs support with her business growth.

 

 

 

 

Multiple ways to buy from you

 

If you offer handmade organic body lotions and scrubs can your customers order in both full and gift sizes? Will they fall in love with your product? Are there gift options that would allow them to ship it to a friend? This is one example of how you can create multiple reasons your customers should buy from you.

 

In the service sector, do you have an “offer ladder” with related and logical offers for your customer to take advantage of? How about a mix, like a course and a live program? Take a minute and think about the logical ways people would benefit from working with you through multiple sales.

 

 

 

 

Giving exceptional service with every sale

 

If you want to keep the fans coming back, you have to give the most amazing service. Ensuring so, they feel well taken care of. 

 

Drop the extra note, send the Voxer, follow up on their delivery.

 

Put a card in your package.  Send a gift. Answer the email. Jump on a call.

 

There are a million ways to let your customers know that they are important to you.  If they feel good, they will continue to buy from you. 

 

As entrepreneurs, we are often asked if we have a “business strategy” for just about everything. Social media, marketing, growth, operations, and on and on. But what does it mean to have one? The word strategy, as defined by dictionary.com means, “a plan of action or policy designed to achieve a major or overall aim.”

 

business strategy meeting

 

In all honesty, it can feel a little overwhelming to think about everything that needs to be planned in your business. On the other hand, operating without any plan, that is, just winging it in your biz, will cost you time, energy, and money because you will be trying to hit your targets in the dark. The truth is that you need an overarching plan for your vision, then mini-plans in each of the action areas.

 

 

 

 

Must Fit Into Your Bigger Vision and Goal

 

You want to go from New York to Los Angeles in the car. That’s the goal, get to LA. There are so many different routes to get there, but we can probably agree that you need to have a starting road and you need to be going west. Without looking at a map or GPS or having a strategy to get to your destination you could end up anywhere else costing time and money.  It is true that your starting route may change, and you may end up on a different interstate- but as long as you hold the vision of getting to LA, you will be ultimately moving west. Make sense?

 

My question to you. Where are you going? What does this look like in the future? What is your vision? This is your very first strategy assignment, create a picture of where you are going. This is where people look out 3 months, 6 months, a year, five years. But for now, just pick a timeframe within 2 years and grab the picture in your mind. Now we need to hold that vision to create a plan to get there. Write down this vision and your goals.

 

 

 

 

Must Lead Into Action Plan

 

Some of us love to plan. I do. Unfortunately, sometimes we replace action with planning. Planning is preparation, and I am so guilty of this when I have any fear or resistance around taking the next step. The best use of strategy is to translate your plan into actions that you take every day, week, month, towards your vision.

 

This is where multiple strategies are developed. For example, the social media strategy, marketing strategy, and webinar strategy must nest within the bigger vision. To do this, look at your written vision and goals and describe what each plan needs to do to support your journey. If your business is product-based you may have a strategy that includes sales to both wholesale and retail audiences, so your sales strategy needs to address how to support both.

 

The actual number of plans will vary by business. If you are in manufacturing, you will have strategic needs that aren’t necessary in the coaching world. At a minimum, however, I think just about every business needs:

 

  • A marketing strategy (with a social media plan)
  • A sales strategy
  • A customer acquisition, service, support, and retention strategy
  • A clear strategy for delivering the products and services to market

 

With these four strategies defined for your business, you can make decisions and take action every day aligned with your bigger vision.

 

 

 

 

Must Be Reviewed At Least Twice A Year  

 

It is so true that businesses start with one thing and ultimately evolves. You may start with a single idea and grow it into several lines of revenue. You may need to meet your customer a different way as the industry changes. The strategy will also evolve and grow with your business.  So, creating your strategy isn’t a “one and done” event.  Reviewing it twice a year is a great way to see if your goals and vision are still aligned based on the daily real-world business things.

 

If you aren’t a natural planner, I get it. I hope you see how important it is to have an overarching map and strategy to get to your vision.  You’ve been given a vision, and your entrepreneurial purpose is to reach it. If you need some help with planning your next moves, grab a spot on my calendar for a chat, I have an intensive 3-hour session available that is intended to get your plan reviewed and if needed, back on track to support your goals.

I am not from the school of thought that believes in raising prices often. Yes, I am a coach and yes, I have raised my prices over time, but raising them was not my first response to making more money. I believe it is what you keep- not what you make- that matters. This means that if you can have good margins at lower prices, that should be a consideration in your formula. Here are a few reasons, however, that you should consider raising your prices as a response to market changes.

raising prices

 

 

 

Raising Prices

 

  1. Your margins have gone down, and your expenses have increased.

 

It is expected that increased expenses should be passed onto the customer and client. If your costs have increased, your prices may have to increase to match. Sometimes costs go up temporarily, for example,  gas prices in the summer, but if there are permanent price increases from your suppliers and service providers, you have to increase proportionally to stay in business. This can be a tough thing for businesses to do. Alternatively, look for lower pricing in your costs.

 

 

 

  1. Your financial goals require a price increase.

If you are at maximum capacity and availability in your products and services, the only way to make more money is to increase your prices. For example, if you coach 20 hours a week, and that is your maximum availability, the increase from $100.00 an hour to $200 an hour is the only way you can make more. This increase needs to be attached to a goal, and you can do the math to figure out how much you need to go up. I’m not necessarily a fan of a 100% price increase, as I used in this example, but I AM a fan of increasing to meet your financial goals.

 

 

  1. Your expertise and value in the market demand it.

 

Finally, sometimes you have to raise your prices because your value demands it. If you have a waiting list for your products and services and cannot keep up with demand, raise your prices. As your expertise grows and you are able to perform at a higher level, your value in the marketplace also increases. Raising your prices to match your increased value is important to keep up with demand.

 

 

AUTHOR’S NOTES:

 

Raising prices can feel scary. But it is a necessary step for maintaining margin, making more, and addressing your market value. Happy Entrepreneuring!

Marcus Lemonis loves to remind business owners that “If you don’t know your numbers, you don’t know your business.” And those numbers he refers to include “margin” as in the profit margin, expressed as a percentage, on every product and service you sell. To make things a little more fun, for our conversation “margin” can be expressed after production costs (gross margin) and after operating costs (net margin). It’s important to recognize the difference to ensure we are looking at the right numbers to make decisions.

 

 

 

Profit Margin: Gross Margin

 

Gross Profit Margin is calculated by subtracting what it costs to produce something from how much it is sold for. For example, it costs you $5.00 to produce a widget (labor and all materials) and you sell it for $10.00. You have a 50% gross profit margin.  This is only half the story though because you have other business costs (operating costs) that also have to be paid from the gross profit.

 

To figure out our net profit we need to further subtract the operating costs from the item. If each $10.00 item actually incurs $1.00 of operating costs, the net profit isn’t $5.00, it’s $4.00.  That’s the number we want to work with for managing pricing and expenses. In our example, this $10.00 item has a 40% net profit margin.

 

Anything that affects that $4.00 net dollar amount affects the margin of the item. If costs go up or down, that $4.00 can get bigger or smaller. Let’s say that materials go up in cost $.50, so that costs are now, $5.50 to produce, the net margin goes down from $4.00 to $3.50. From 40% to 35%. Make sense?

 

 

 

 

If you don’t know your margins, you need to take a little time to figure them out. The amount of margin that’s considered “good” or “healthy” varies by industry. Restaurants typically have lower margins than retail and retail is typically lower than many service provider businesses. Online businesses have lower operating expenses and often higher margins than businesses with physical locations.

 

 

 

 

PROFIT MARGIN: WHAT AFFECTS IT?

 

This article is about the things that affect your margins, and margins can be the difference between struggling and thriving. And those things are many. Changes in any costs can affect your margins and require you to address your pricing to maintain your profits. Any cost. Utilities, service providers, suppliers, and other expenses can go up in cost at any time unless you are under a contract.

 

As margins go down, there is less and less money left over, and it can affect your growth and your ability to weather any unexpected events. This is why I encourage entrepreneurs to check their expenses through the Breakthrough Number process once a quarter. You can use these resources to figure yours.  Keeping your eyes on the margin can help you head off issues that can affect the health of your business. Set aside the time to learn your numbers.

 

 

 

AUTHOR’S NOTES:

If you want to walk through a step-by-step method to manage your margins, your income, and profitability, join me for the next Quarterly Intensive. Visit https://entremoneycoach.kartra.com/page/quarterlyintensive to learn more.

“I don’t know what I am going to make.” I hear this statement all the time, and when your business is fairly new, I get it. But even from the very start, you should understand your capacity and availability to predict your revenue.  Whether you are a business or a service, you should be able to figure out how much you can make in a given time and create a path to get there.

 

 

It is so important that you figure out a predictable revenue at every phase of growth. Using these numbers can help you make the best business decisions regarding whether it is time to scale. The first thing you have to do is get your pricing right. If you need a pricing formula that will help you price any product or service for profit, you can find it in this blog: How Do You Calculate Selling Price? | Entre Money Coach .

 

Once your pricing is where you need it to be, we can talk about your capacity to make products and services for predictable revenue. I’m going to use a recent example, a client of mine who is starting a coffee roasting business.  We calculated his pricing based on operations, cost of the beans, labor, packaging, and shipping. We also figured out both a wholesale and a retail price for his products, because part of his model is to be on consignment in small local stores.  Here’s how we went from pricing to predicting monthly revenue:

 

 

 

 

  1. Capacity and Availability

 

Roasting coffee takes a certain amount of time per batch and based on the roasts and origins times can vary. But we averaged the time it takes to roast a batch, and the number of bags of product he can make in each roast cycle. That number alone will limit his capacity to make more than a specific amount of product each day. 

 

So, based on roasting time and resting time before packaging, we calculated the maximum amount of product that can be made per day, and then per week.  The cool part is that you can decide how much and how often you work. My client wanted to be part time to start, so the amount of product produced was also determined based on his availability and the number of hours he wanted to work.

 

 

 

 

  1. Number of items of each type to sell at each price

 

My client has two package sizes of roasted coffee beans right now, a 3oz size and a 12 oz size. How many of each size he makes, and sells, each week can help him predict his income. Some will be sold at wholesale, some at retail, with pricing at each size. Based on the number of wholesale and retail orders, plus the product he makes, without orders, to sell that week we can predict how much he will make each week, then month, then quarter. These numbers need to be reviewed at least every quarter.

 

For example: He sells 20 12 oz bags and 10 3 oz bags in a week.

 Ten 12 oz bags at $10.00 wholesale becomes $100.00 and ten 12 oz bags at $14.00 retail is $140.00.

Adding ten 3 oz bags at $2.50 wholesale is $25.00. With this mix of products, he will gross $265.00 this week on 30 total bags, mixed in size and price.

 

This is his “predictable” revenue. He can make more or less by selling more at a retail price instead of wholesale. This is just one small example of how knowing your “mix” of capacity. That and knowing your availability, audience and price can be brought together on paper. Doing this will allow you to predict how much money you will bring in.  I want to note that this isn’t actual sales at this point, but a very solid estimate.  You CAN predict your revenue, even as a new business.

 

 

 

Ready to plan your revenue for Q2 2021? Join me Saturday, March 13th for the three-hour Revenue and Profit Planning workshop! Visit https://entremoneycoach.kartra.com/page/quarterlyintensive for more information!

 

 

I work with many entrepreneurs on something called an “offer ladder.”  This is a variety of offers available for sale in your business for people at different levels of awareness about you and your brand. There are some very, very, very successful business owners who only offer 1 or 2 things for sale and are well known for that thing.  For a lot of us in the first years of business, we need to have offers for sale that allow clients to buy at different levels of know, like, and trust about us.

 

offer ladder

 

 

 

Offer ladder : Know, Like, and Trust

To be honest, I hadn’t heard about the “know, like, and trust” factor in business until I took Entre Money Coach online.  My business was heavily referral-based. There was a level of trust built in when I met with clients for the first time. Honestly, I still love building organically and getting clients by referral. The reality is that often that strategy isn’t really enough to grow the business as big as we want. It is important to relate to our audience at different levels as they get to know us.  

 

What do I mean? I have worked with several entrepreneurs that had offers for their audiences starting at several thousand dollars. They did not have anything else aside from that. The offers they had also created had a commitment of 3-6 months. Not to mention the monthly payments that were the size of car payments. They did make a few sales here and there, but the issue was the client journey. It took too long to make the sale. It’s nice to see $3,000/$6,000 programs. But it’s challenging if you only do it every few months.

 

 

 

Offer LADDER : Price Points

Those price points and time commitments feel like a relationship, don’t they? So, one of the things we worked on together in our sessions was to create something at a lower price point and time commitment for their audience. This way, if someone wanted to work with my client, but not on a long-term basis, they now could. Some quick ideas can include a power hour session or a few hour session that solves a particular problem.  Having this live offer to work with you for a few hours can be a great entry point for your audience to buy from you sooner.

 

I see some online service entrepreneurs create their lower-priced entry point with online courses, but I think having a live offer available so someone can learn about your approach and process can be beneficial. The first step to creating your offer is to define very clearly the problem you can solve in a short period of time. Can you help solve a sales problem or a copywriting issue on a sales page? How about creating a quarterly plan for something? A bonus to the quarterly offer is that you can have repeat business every three months if the client loves the result.

 

 

 

AUTHOR’S NOTES:

If you don’t have an entry-level offer for clients to get a “little bite” chance to work with you, consider creating one. As with everything else you do, the result is the key. Start from your audience’s most pressing problems and find the one that you can solve in a shorter live session.

 

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