I was in a conversation with my wife last night, we were discussing what exactly is required to grow a profitable business in Nigeria.
I thought I should share our conclusions with you because I believe it might benefit you one way or the other.
I am also hoping we can be corrected if our conclusions are wrong. If you do not agree with these steps then reply this email and let me know what you think.Click here to learn the easiest, quickest way to grow your business profit online. It's Free.
Here are the steps:
I was speaking at an event yesterday and I asked a business owner to tell the audience why we should buy their products and services?
And then I asked someone random from the audience to tell us why they would buy his products and services.
Something interesting happened, the person from the audience had a different reason from the business owner.
As the person from the audience was saying why he would buy and you could hear other people in the audience agreeing. This did not happen when the business owner was talking.
I repeated this 3 – 4 times, it was the same result.
Build a business that people want.
Key Point here: – If your business is going to be profitable you need to validate it with your customers (The way you see your business is always different from the people who buy it).Find out what your customers want and why they will buy it from anyone. If you understand what they want and… Click To Tweet
Most business experts will tell you not to focus on money but value (Value is money).
This is very true and that is why the first step is to validate your business.
Your customers know the value they want from your products and services and based on the value they are happy to pay for it.Click here to learn the easiest, quickest way to grow your business profit online. It's Free.
After you know the values that your potential customers will derive from your products and services. You now need to put a cost to it.
Pricing is an interesting topic but you need to understand that a profitable business means you need profit.
This means you decide the price (not the customer) that makes you profitable however, here is a point of warning that your pricing must be at least 10% of the value your customers will perceive.
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Apple is an amazing company that will start telling you about the value of their products 6 months before it is launched.
So, you already perceive the value from product and imagine the cost as premium.Because they also tell you the value based on customer research – You want it, they give it to you.
Your pricing should also be guided by rule of quantity or quality.
After you decide the cost then you need to understand how many customers you need every month:
a. How much do I want to make this year that makes me profitable? Let’s say 12 million.
b. Divide the number by 12 months and you have 1 million every month.
c. Now, let’s say your product cost is 100,000
d. Divide how much you want to make monthly by your product cost. 1million/100,000 = 10 customers.
e. This simply means you need 10 customers every month to meet your profitability target.
Key point here: It is easy for you to reach profitability in your business if you know how many customers you need to meet your profitability target.
You want to make a pledge and if you have a marketing team you want them to make a pledge. This is the pledge:
Every week, you measure your progress by this statement.You are allowed to get more customers but not allow to get lower than the number you need to achieve profitability.
You need to first figure out where your customers are and show them how your products and services can drive value for them.
Here you want to understand that the most important activities in marketing is selling value and not the products or services.
Key point here:- You can only achieve profitability if you market your products and services by selling value.
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