If you’re looking to break away from your current work arrangement and start doing something that you’re passionate about, consider starting a microbusiness: a business typically run by one person. This will give you the freedom to set your own schedule and focus on a product that you care about. Though microbusinesses have been around since the days of Ancient Greece and Rome, the advent of the internet and social media have made them easier to start and more lucrative than ever before. Where you once needed to have a fair amount of funding to start your own operation, you can now do so for as little as $100 and without loaning a cent from the bank.
There are really only six steps you need to take to launch your business:
Throughout this summary, you’ll learn how to expand on these steps to grow your business from a barebones model and find success as a startup entrepreneur.
The first step of creating a business is deciding on a product or service that has worth: in other words, that makes people’s lives better or easier. To create a useful product or service:
As you create your product, determine who you’re trying to sell to. To do this, break your ideal customers down into demographics. There are two kinds of demographics:
While traditional demographics can be useful for specific organizations, new demographics are usually more effective as they pinpoint the wants and needs of your target audience.
When building products around your target audience, consider the following strategies:
Your primary goal as a business owner should be to develop a product that solves a problem or helps people. To do this, attribute the value of your product to its benefits, or the ways that it can help your customer, not to its features, or the details of the experience.
For example, if you were marketing a meditation retreat, the benefits of the retreat would be “freeing the mind” or “calming the body,” while the features would be “sound-bath meditation” or “guided practice.” While your customers would need to know the features eventually, they’ll likely be more drawn to your product by the promise of freedom and relaxation.
Use the following three strategies to provide an experience for your customer that goes above-and-beyond:
As you start your business, changing trends in the market may lead to new ideas. Don’t be afraid of exploring these avenues because they often reflect changes in customer demand. For example, consumers are more aware of environmental issues than ever before. This has created a market trend towards sustainability, which may create an opportunity for you to develop new products using recycled materials to appeal to this trend.
The following are common sources of inspiration that could help you adapt to an ever-changing marketplace:
Once you've decided on your product, it's time to start planning your business launch. As preparation for your launch, develop an offer and create a one-page business plan.
Be warned: It’s easy to fall into the trap of “perpetual planning.” If this happens, you may spend years trying to make the perfect plan and never actually turn it into action. Instead of overcomplicating things, take action quickly and adjust your plan as you go.
Once you have your product in mind, develop an offer based on the value of your product. A successful offer consists of three elements:
When creating your offer, keep these strategies in mind:
Some entrepreneurs believe in building a long business plan that outlines every facet of their organization. However, these can get confusing and complicated, leading many investors to skim through the material without really grasping it. Instead of making more work for yourself, make a one-page business plan that investors will actually read that includes:
Every launch is different, but they all follow the same general steps:
The following strategies will help ensure that your product launch is as successful as it can be:
The work doesn’t end once you’ve launched your product. After your initial launch cycle, keep your business moving forward through self-promotion and ensuring profitability.
Effective self-promotion is a balance between style and substance. Style is your ability to effectively market your product, while substance is the quality of your product. If you have style, but no substance, your shoddy product or service will undermine your charm. If you have substance, but no style, people likely won’t hear about your product, no matter its quality.
If you have a quality product and market it effectively, you’ll be able to grow your client base and grow your business. As you create your promotion plan, use the following strategies to help expand your audience and spread the word about your business:
Above all else, in order for your business to survive, you must be able to make a profit. While social media followers and dedicated customers are great to have, they mean very little if your company isn’t making money. Ensuring profitability can be boiled down to two basic concepts: spend money wisely and generate more income.
It’s often tempting to spend significant amounts of money on large ad campaigns, complex websites, or custom merchandise. However, if your purchase doesn’t build your brand or generate sales, then the cost isn’t justified. Especially in the early stages of development, keep costs low by only spending money on items that have a direct impact on sales.
While this seems obvious, many companies struggle to bring in enough cash to stay afloat. To generate more income, consider the following strategies:
Growing your business usually isn’t as hard as starting your business. If you can keep your customers happy over a long period of time, word of mouth about your business will spread naturally. However, there are three things that you can do to keep your business moving forward:
Once your business is up and running, find ways to increase your income and expand your company. The first thing you need to do is determine your model of growth. From there, the key to finding which adjustments benefit your business the most is experimentation.
There are two ways that your company can grow:
Both models are valid, and it is possible to see limited growth in both directions at the same time. As you start to make adjustments to your business, keep in mind which model of growth you're focusing on, and how you can use your adjustments to support that model. Use the following strategies to increase your revenue based on your growth model:
Franchising yourself is the process of splitting your time between multiple business ventures to gain one or more new streams of income. Running multiple ventures can be a lot of work for just one person. For this reason, you may choose to get outside help with new projects. This allows you to build relationships with other business owners, explore new ideas, and target new audiences without having to take on all of the risk and effort yourself. There are two primary ways to enlist the help of others when franchising yourself: partnerships and outsourcing.
Partnerships are collaborations between you and another business owner, usually in the form of joint ventures, or single projects that both teams contribute to. For example, if you ran a makeup company, you could partner with a beauty blogger to create a new line of lipsticks.
Sometimes, partnerships create a completely new business that is collectively owned by the partners. For example, if you were a fitness instructor, you could partner with another fitness instructor to create a new private training gym.
Outsourcing is the process of hiring outside contractors to help with the management of your business and the development and fulfillment of your product or service, thus freeing up your time to pursue new ideas.
Outsourcing’s usefulness varies from business to business. Its pros include getting help with meeting demand, removing pressure from the fulfillment process, and using resources or technology you don’t have direct access to. Its cons include increased costs, less quality control (as you lose direct control over outsourced processes), and increased management time.
As your business comes into its own, determine how much you want to expand. While some business-owners dream of taking over the world, others just want freedom and stability without the added stress of growing too large. To grow your business the way you want to, define the ideal size of your company and invest time into development.
To make effective decisions about the future of your company, you need to know what the ideal version of your business looks like:
As you grow your business, you will inevitably fail at least once or twice. Don’t let these failures stop you from taking action and growing your company. Instead, learn from your mistakes and use the knowledge you’ve gained to grow.
If you’re looking to break away from your current work arrangement and start doing something that you’re passionate about, consider starting a microbusiness. Microbusinesses, or businesses typically run by one person, give you the freedom to set your own schedule and focus on a product that you care about.
Though microbusinesses have been around since the days of Ancient Greece and Rome, the advent of the internet and social media have made them easier to start and more lucrative than ever before. Where you once needed to have a fair amount of funding to start your own operation, you can now do so for as little as $100 and without loaning a cent from the bank.
Before you start building a business plan or developing marketing plans, develop a clear idea of what you want to do and which of your skills may help you to do this:
Once you have a grasp on these three concepts, you’re ready to get to work on your startup. You don’t need bank loans or an MBA to begin building your business. In fact, there are really only six steps you need to take to launch your business:
Throughout this summary, you’ll learn how to expand on these steps to grow your business from a barebones model and find success as a startup entrepreneur.
(Shortform note: While this summary does follow the general structure of the original book, some sections have been restructured for the sake of clarity.)
The first step of creating a business is deciding on a product or service. Ultimately, your product needs to have worth: In other words, it should make people’s lives better or easier. Ideally, this product or service should also be something that you’re passionate about. However, before you dive into transforming a passion or hobby into a business, consider the following questions:
If you answered “yes” to all of the above questions, you’re ready to start developing your product or service. To do so:
As you create your product, determine who you’re trying to sell to. To do this, break your ideal customers down into demographics. There are two kinds of demographics:
Traditional demographics still have a place for some small businesses, especially those with storefronts. It’s often helpful to know the traditional demographics of the area around your storefront because you want to make sure your product or service can thrive in the region. For example, if you know that you cater mostly to women in their 50s, you wouldn’t want to open in a storefront in an area with a younger population.
However, traditional demographics can be rather vague. For example, catering to “middle-class, 20-to-25-year-old men” could mean a variety of things, since men in this group may have diverse interests and preferences. Are they young professionals? Gamers? Athletes? Traditional demographics don’t answer these questions.
On the other hand, new demographics help businesses shape their product based around the wants and desires of their customers. For example, if you ran a clothing boutique, you could use new demographics to decide that you want to cater to young women in the workforce who are interested in climbing to the top of the corporate ladder. With this knowledge, you could shape your product and marketing by creating stylish, but professional attire that appeals to your target market.
When building products around your target audience, consider the following strategies:
When deciding what you want to sell, look at trends that are popular with your target audience. These often pop up in the areas of dieting, fitness, technology, social media, and entertainment. For example, you could coach people interested in fitness through a trendy diet plan such as Whole30 or Paleo by giving personalized meal plans and grocery lists.
Using surveys and interviews, ask people within your target demographic what they're looking for in a product—for instance, the issue that they'd like the product to solve. One of the most straightforward ways to get people interested in your business is to sell them a product they already want. When creating your questionnaires, include questions such as:
Once you have an idea about the products you’re looking to offer, reach out and ask for feedback on your ideas. You could ask people to rate your product ideas based on what they’d find most helpful or if they could see themselves buying any of the products in the near future.
Note: Be careful about over-involving the customer in product design. While asking for feedback on fleshed-out ideas is helpful, asking customers to do too much work can cause stress or overwhelm them.
For example, if you order a steak at a restaurant, the waiter will probably ask how you’d like the steak done. Your opinion helps shape the preparation of the food and doesn’t require too much work on your end. However, if the chef came to your table and asked you to come back to the kitchen to help with the process, you may feel stressed or frustrated.
Once you’ve conducted your market research, you may have so many product ideas that you don’t know where to begin. To organize your thoughts and determine which ideas are the best, use the decision-making matrix. The decision-making matrix contains four scoring categories, scored between 1 and 5:
At the end of each row, tally the total score of each idea. When you’re finished, the matrix should look something like this:
| Impact | Effort | Profitability | Vision | Total | |
| Idea 1 | 4 | 2 | 5 | 5 | 16 |
| Idea 2 | 2 | 5 | 3 | 3 | 13 |
| Idea 3 | 3 | 2 | 2 | 1 | 8 |
Using the above example, you could reach the following conclusions:
When selling your product, focus on the experience that your product creates. To do this, attribute the value of your product to its benefits, or the ways that it can help your customer, not to its features, or the details of the product. Instead of marketing what your product does, you’re marketing the positive experience a customer will receive.
For example, if you were marketing a meditation retreat, the benefits of the retreat would be “freeing the mind” or “calming the body,” while the features would be “sound-bath meditation” or “guided practice.” While your customers would need to know the features eventually, they’ll likely be more drawn to your product by the promise of freedom and relaxation.
Use the following three strategies to provide an experience for your customer that goes above-and-beyond:
Often, customers don’t know what they actually want. They may have an idea, but it’s your job as the expert to lead them to a product or service that’s going to give them an excellent experience that they didn’t necessarily anticipate.
Note: This doesn’t mean ignoring their requests. If the customer asks for something specific, give them what they’re asking for. However, you can guide them in a certain direction or provide an additional service if you believe it’s going to elevate the value of their experience.
For example, if you’re a wedding photographer, some couples may ask for “non-traditional” photos, but you know people tend to regret not taking traditional photos after the fact. To accommodate for this, shoot the non-traditional photos, then ask if you can take just a few quick traditional group photos. Worst case scenario, they don’t like the photos. Best case scenario, they’re given a beautiful memory that they’ll cherish the rest of their life.
People often look for products or services that will help make them look impressive or skilled. When defining the value of your product, show your customers how your business can elevate them at home or in the workplace.
For example, if you run an online course on website creation for aspiring web designers, you’re helping your clients gain the skills they need to successfully and efficiently provide their clients with stunning websites. Explain how your product will make them look like heroes to the people that they serve.
Customers are typically looking for a simple, clear solution to their problem. If you bombard them with too much information about the details of your product in your marketing materials, they may get overwhelmed or confused, disengaging with the item or service in the process.
Keep your promises concise and straightforward. This allows the customer to clearly understand what they’re getting from your product, making them more likely to purchase. If they ask for more details, then feel free to provide them with more information. Just don’t assume that everyone wants an in-depth breakdown of your product.
For example, if you’re starting a voice studio, don’t lead by explaining the intricacies of every single vocal methodology that you’ve studied. Simply explain that you want to help people become better singers and that you’re going to give them the tools to succeed. If they want to know more, they’ll ask.
As you start your business, changing trends in the market may lead to new ideas. Don’t be afraid of exploring these avenues because they often reflect changes in customer demand. For example, consumers are more aware of environmental issues than ever before. This has created a market trend towards sustainability, which may create an opportunity for you to develop new products using recycled materials to appeal to this trend.
The following are common sources of inspiration that could help you adapt to an ever-changing marketplace:
By staying open to new ideas and ways of working, you will find the business model that works best for you and your product or service. The following are specific, non-traditional business models that you may be interested in exploring.
To run a successful business, you need a product that satiates demand or solves a problem. If your passion doesn’t create a clear product, then you’re probably not going to make money without some adjustments.
Consulting is a good option for people whose passions won’t make a profit on their own but can be used to help other people. For example, you probably won’t make money by blogging about your travel experiences. However, if you can help other people travel, you can transform your travel hobby into a profitable travel consultancy business.
This can be done in many different models. You need to find what works best for you and your product:
Once you know what model you want to use, consider the following:
In addition to consulting, another common startup model is self-publishing. Thanks to advances in technology, self-publishing your book is easier than ever, allowing you to share your knowledge or expertise without having to go through a traditional publisher. The result is higher profits and more direct control over your product.
To become your own publisher, use the following steps:
If you’re able to start a successful online business, you may not have to stay in a particular location, allowing you to travel to your heart’s content. If you want to see the world while maintaining your startup, consider the following tips:
(Shortform note: For more tips on how to run your business while traveling, check out our summary of The 4-Hour Workweek by Tim Ferriss).
To effectively market your business, you need to know your target audience.
How would you describe your ideal client or customer? Think about both traditional (age, gender, income, and so on) and new demographics (interests, beliefs, values, and so on).
With that ideal client in mind, how could you adapt your product to meet their needs and make a sale?
Similarly, how could you adapt your marketing strategy to appeal to your ideal client?
Bring customers in by sharing the benefits that they’ll experience by purchasing your product or using your service.
List 3-5 features of your product or service. Remember, features are the details of what your product or service does.
Using the features of your product, list 3-5 benefits your product or service provides. Remember, benefits are how your product is meant to make customers feel.
Select one of the benefits you listed above. How could you communicate that benefit through marketing?
Once you've decided on your product, it's time to start planning your business launch. Be warned: It’s easy to fall into the trap of “perpetual planning.” If this happens, you may spend years trying to make the perfect plan and never actually turn it into action. Instead of overcomplicating things, take action quickly and adjust your plan as you go.
Before you launch your business, you need to ensure your product is marketable because, if it isn’t, you’ll struggle to convince people they should buy it. To check if your product is marketable, ask yourself the following questions:
Once you're certain your product is marketable, start planning the details of your launch. As preparation for the launch, develop an offer and create a one-page business plan.
Once you have your product in mind, develop an offer based on the value of your product. An offer consists of four parts:
When developing your offer, use the following format as a guide:
A successful offer consists of three elements:
When creating your offer, keep these five strategies in mind:
Most people like to purchase products, but they don’t like being sold on a product: It turns them away because they feel uncomfortable and pressured. While offers require gentle persuasion, if you have the proper audience and the right timing, you shouldn’t have to spend a lot of time convincing your customers that they need your product.
For example, if you went door-to-door trying to sell vacuum cleaners to people who don't necessarily need them, you’d likely have to aggressively sell your products to convince people to make a purchase. However, if you set up a website and let customers come to you, you ensure that you have the proper audience (customers that are interested in your vacuum) and the right timing (the customer needs a new vacuum).
Nudge your customer to purchase your product by offering time-sensitive or limited-quantity offers. These could be 2-for-1 deals, discounts, or packages. For example, if you ran a yoga studio, you could offer a limited-time offer that would give clients two months of classes for the price of one. By setting an end date for the deal, you’re urging customers to purchase before it’s “too late.”
Building an FAQ page allows you to address objections early on and people’s minds at ease, while simultaneously displaying the value of your product. Some common concerns include:
Note: While you do want to offer solutions to people’s concerns, you don’t want to get defensive. Focus on what makes your product valuable and avoid attacking the objection.
For example, if a commonly-asked question is “Why is this service so expensive?”, your answer shouldn’t be, “If you’re not willing to pay, then don’t buy this service.” Instead, a more productive answer would be, “Unlike other services, this service is personalized to you! While that does lead to a higher cost, this program is designed to give you the best experience possible. ”
Customers often worry about investing their money into a product or service that they haven’t used before. Offering a satisfaction guarantee alleviates your customers’ fears and creates a mutual bond of trust between you and your clients. For example, if you’re selling a teeth whitening product, you could promise your customers that they’ll see whiter teeth within thirty days or you’ll give their money back.
Note: Either offer a strong guarantee such as giving a full refund, or offer no guarantee at all. Middling or unclear guarantees can actually hurt your credibility. For example, a guarantee such as, “Satisfaction guaranteed. If not, we’ll figure something out,” makes you seem unsure about your own product as you’re unwilling to take on the risk of offering full refunds.
After making a purchase, many consumers feel a moment of anxiety where they question their purchase. To alleviate this fear, go above-and-beyond to make your customers feel like they made the right choice. A few ways you can over-deliver your product include:
As well as creating your offer, you should also draft a business plan. Some entrepreneurs believe in building a long business plan that outlines every facet of their organization. However, these can get confusing and complicated, leading many investors to skim through the material without really grasping it. Instead of making more work for yourself for little benefit, make a one-page business plan that investors will actually read, using the following format as a guide:
In addition to your business plan, you should form a mission statement, or an explanation of the central values upon which your company is built. This statement should be no more than 140 characters and should explain in simple terms how your business can help people.
For example, if you run a day-care center, your mission statement may be, “I help working parents feel comfortable with using a day-care center by giving their children personalized, quality care during the workday.”
While every launch has different goals and obstacles, all of them require pre-launch preparation and active participation during the launch cycle.
A successful launch relies on thorough preparation. To prepare for launch day, create a launch plan, build anticipation, and set yourself up for success.
There are a lot of moving pieces involved in a launch, and the more planning you do, the more smoothly your launch will run. Your launch plan should outline:
On top of preparing your product and marketing for launch, make sure you’re ready to receive the proceeds from your customer purchases efficiently by doing the following:
Build anticipation by slowly feeding information to your target audience. This will create hype and get consumers excited about purchasing your product. For example, film studios release lots of pre-release information about movies, including teasers, trailers, interviews, and behind-the-scenes footage.
As you start to promote your launch, use the following tips:
To help build anticipation, answer the following questions:
In the days leading up to your launch, take the following steps to help you run your launch day effectively:
As you approach launch day, a variety of issues may arise that could tempt you to delay your launch. Barring absolute disaster, you should stick to the deadlines you set. Constantly delaying looks bad to customers and may keep you from ever actually launching your product.
A launch cycle is the period of time from launch day to the end of your “launch promotions.” For example, if you launch on a Monday with a “limited-time launch offer” that ends on Friday, your launch cycle would be five days long.
Take an active role in your launch by communicating with customers, sharing information, and solving problems as they arise. Use the following practices to help you keep the process as smooth as possible:
Your efforts to build hype shouldn’t end once you’ve launched. Keep sharing information with potential customers to get them interested in your product. To do so, consider the following tips:
Keep the costs of your launch cycle low by considering the following:
The following four strategies will help to ensure that your product launch is as successful as possible:
Strategy One: Keep your word. If you offer a time-sensitive discount or bonus, you must adhere to the guidelines you set. If your launch went well, you will likely receive a series of emails or phone calls asking for an exception. While it may be tempting to make more money, sticking to your word tells people that you’re serious about deadlines, something they’ll remember next time you launch a product.
Strategy Two: Be honest about flaws. Though it sounds counterintuitive, being upfront about any limitations of your product and why those limitations exist will help build trust with your customers. If you try to hide issues or restrictions, customers may view you as untrustworthy or manipulative.
Strategy Three: Create effective marketing materials. Your launch marketing must do three things:
Strategy Four: Pay attention to feedback. When you launch a product, listen to your audience. If most people are providing positive feedback, you know your launch has been a success. However, if most people don’t agree with the valuation of your product or are dissatisfied with it, make adjustments accordingly.
While the next part of the summary will cover long-term growth and development, there are a few things you need to do directly following your launch cycle:
Before selling your product, you have to develop a clear offer that entices your target audience by describing benefits, quelling concerns, and creating urgency.
What are you charging for your product? What benefits could you use to justify that price?
List 2-3 objections that your audience may have to buying your product.
How would you respond to each of these objections?
Why should customers want to buy your product or service right now? What could you do to make your offer more urgent?
To ensure a successful launch cycle, you must generate interest before your product or service goes on sale.
What makes your product unique from competitors?
What launch cycle incentives could you create? What would the timeline be for those incentives? (For example, a “20% off” launch special may only last for 2-3 days after launch day, nudging customers to buy quickly.)
List 3-4 ways you could use social media to get people excited about your launch.
The work doesn’t end once you’ve launched your product. Once your initial launch cycle is complete, keep your business moving forward through self-promoting and ensuring profitability.
Effective self-promotion is a balance between style and substance. Style is your ability to effectively market your product, while substance is the quality of your product:
To organize your promotion efforts, build a promotion plan using the following template as a guide:
As you create your promotion plan, use the following four strategies to help expand your audience and spread the word about your business.
When starting a business, use the allies you already have by sending a message to your friends and colleagues about your business. Don’t spam them with marketing materials or try to “sell” them on the product. Instead, explain what your company does, the primary product you’re trying to sell, and the goals that you’re trying to achieve. From there, provide one to three ways that they can help you if they’re willing. Be sure to thank them for taking the time to read your message.
Offer your services free-of-charge or at a low cost when you see friends, colleagues, or customers in need of assistance. Don’t put conditions onto your help or demand something in return. If you show that you sincerely want to help others, not just sell them on your product, you’ll be able to build long-term relationships that may help you in the future.
For example, if you run an interior design company, you could offer online consultations free of charge. If you use the time to genuinely assist the client instead of trying to make a sale, you’re going to form a stronger relationship.
Saying “yes” to requests from both customers and other businesses can help you develop new relationships and reach unique audiences. While you may need to become more selective as your business grows, allow yourself to explore different avenues while your company is young. For example, if another business reaches out to you about a cross-promotion opportunity, agreeing to the request will create connections with both the business owner and their audience.
While you’ll have to embrace a little cost or time upfront, giving away products or services can help you build your audience. There are two reasons for this:
There are many ways to go about providing a free product, including a free consultation, a contest, or a giveaway. Experiment with different methods to see what works best for your business.
Note: There is a difference between contests and giveaways. Contests include some form of competition between customers, where giveaways only require customers to provide a name or email to be entered into the draw. Contests require more work but usually generate more engagement than a giveaway.
Above all else, in order for your business to survive, you must be able to make a profit. While social media followers and dedicated customers are great to have, they mean very little if your company isn’t making money. Ensuring profitability can be boiled down to two basic concepts: spend money wisely and generate more income.
It’s often tempting to spend significant amounts of money on large ad campaigns, complex websites, or custom merchandise. However, if a purchase won’t build your brand or generate sales, then the cost isn’t justified.
Especially in the early stages of development, keep costs low by only spending money on items that have a direct impact on sales. For example, if you buy a branded hoodie for $20 and sell it on for $40, that’s an investment that has a direct impact on sales. However, if you spend $750 on a custom website that ultimately doesn’t generate significant traffic or sales, then you generate no return on your investment.
In the internet age, there are many ways to start a company on limited funds. Online storefronts and digital consulting remove the need for a physical space, thus reducing costs. As a result, the need for business loans has decreased.
Of course, there are still costs associated with starting a business. If possible, avoid borrowing money as it starts your business in the red. Instead, consider starting a crowdfunding campaign online. This allows you to raise money while building an audience in the process. You can offer gifts for different levels of donation but be sure to keep your promises realistic.
While this seems obvious, many companies struggle to bring in enough cash to stay afloat. To generate more income, consider the following strategies:
When pricing your product, charge your customers based on the benefits they’re receiving, not the cost of producing the product. For example, if a single physical book cost you $1 to produce, you wouldn’t charge $2 for the product. Instead, you’d determine the value of the content of the book and charge $20-25.
When you set your prices, be prepared to defend your product. People will complain that the price is too high, or that they can find it for a lower price. If someone is unwilling to pay for your product at its price point, don’t crumble to their demands. You may lose one or two sales in the process, but appeasing people who don’t see the value of your product is not worth it.
Once you know the value of your product, create tiers that offer more pricing options for your customers. If you can, price up from your base model, not down, and keep the range limited. For example, if you charge $75 for your service, you could offer a $100 advanced service and a $150 complete service.
If people are going to spend their money on a product or service, they want to feel like they’re getting the complete experience without breaking the bank. Because of this, typically, a few people will go for the basic item, and a few people will go for the premium item, but most will go for the central item, allowing you to make more money in the process.
The following shows a potential income difference from 20 sales using a single pricing model versus a tiered pricing model:
| Single Pricing Model (Sales/Income) | Tiered Pricing Model (Sales/Income) | |
| Basic Website Package ($100) | 20/$2,000 | 5/$500 |
| Comprehensive Website Package ($150) | Not Offered | 10/$1,500 |
| Premium Website Package ($200) | Not Offered | 5/$1,000 |
| Total | 20/$2,000 | 20/$3,000 |
Instead of selling a single product per customer, find ways that your business can offer a subscription or membership service that includes a recurring payment. Recurring payments create a more reliable source of income and keep your customers coming back.
For example, if you make olive oils, you could start a box subscription service where you send the “oils of the month” to your customers. If you get 100 subscribers at $20 per month, you’ll make $2,000 per month. Without that subscription model, you’d have to rely on individual purchases, which can vary wildly from month-to-month.
Self-promotion is vital to spreading the word about your product or service.
What is the primary goal of your self-promotion? This could be to bring in more customers, to increase sales, or to develop relationships.
What friends or colleagues could you ask to help you with spreading the word? How would you ask them for assistance? Write a simple mock email.
What kinds of businesses could you cross-promote with? (If you have specific organizations in mind, note their names down.) Why do you think these businesses would be good promotion partners?
What could you give to your customers for free to help generate traffic or sales? Be specific. (This could include contests, giveaways, or consultations.)
The most important part of maintaining your business is ensuring that you have a strong income stream.
What business costs could you cut? Think about ventures that aren’t leading to traffic or conversions. (This could include ad campaigns, website development, or branded merchandise.)
Describe 2-3 ways you could generate more revenue. (Think about pricing items based on their value, tiering your pricing, and creating a recurring payment model.)
Growing your business usually isn’t as hard as starting your business. If you can keep your customers happy over a long period of time, positive word of mouth will spread naturally. However, there are three things that you can do to keep your business moving forward effectively:
Once your business is up and running, find ways to increase your income and expand your company. The first thing you need to do is determine your model of growth. From there, the key to finding which adjustments benefit your business the most is experimentation.
There are two ways that your company can grow:
Both models are valid, and it is possible to see limited growth in both directions at the same time. As you start to make adjustments to your business, keep in mind which model of growth you're focusing on, and how you can use your adjustments to support your chosen model.
As you make adjustments to your company, use the following strategies to increase your revenue:
The success of your company relies on regular traffic to either your storefront or your website. The more eyes you can get on your product or service, the more likely you are to make a sale.
(Shortform note: For more information on generating traffic to your website, check out this article from Forbes.)
Once you have a decent amount of traffic, focus on increasing your conversion rate, or the rate at which people make a purchase. For example, if you have 100 customers visit your website, and four make a purchase, your conversion rate is 4%.
One way to create more conversions is to do A/B testing. A/B testing places two live offers, headlines, or webpages against one another and determines which is leading to more conversions. This allows you to constantly adapt your promotions and marketing based upon which efforts are working the best. There are many services you can use to help with this process, including Google Optimizer.
Beyond A/B testing, you should look to the sources of your traffic, including Google searches, social media, and referrals, and determine which are creating the most conversions. This will give you a better sense of where you should focus your marketing attention.
There are three ways you can increase the average price per sale of your product or service:
While bringing in new clients is important, your existing customers have already shown that they’re willing to spend money on your product or service. Capitalize on this by creating advanced or supplementary products or services that your current clientele can purchase.
If you currently offer a service, develop a product that relates to that service. For example, if you run a restaurant, you could sell a cookbook that includes some of your most iconic dishes.
Alternatively, if you currently offer a product, develop a service based on that product. For example, if you wrote a self-improvement book, you could offer life coaching sessions based around the lessons discussed in the book.
Highlight your best or most successful customers and share their testimonials about your business. For example, if you’re a physical trainer, and one of your clients lost 100 lbs while training with you, ask them to provide a testimonial with before and after information.
If possible, provide a variety of stories from people with different backgrounds. This helps build your credibility by proving that your product or service works for a wide variety of people. For example, if you’re a physical trainer, sharing testimonials from both a world-class athlete and a person who hasn’t worked out a day in their life shows that your service can work for a wider audience.
Ask your customers to write a review, share your page on social media, and tell their friends about your product. If you can, offer a referral incentive such as a discount or special item for both the customer and the people they bring to your business.
Franchising yourself is the process of splitting your time between multiple business ventures to gain one or more new streams of income. Your new ventures may be related to your original business idea. For instance, Brooke, the owner of a holistic health practice, franchised herself by founding a secondary business training other health practitioners.
Running multiple businesses or projects can be a lot of work for just one person. For this reason, you may choose to get outside help with either your original business or your new ventures. This allows you to build relationships with other business owners, explore new ideas, and target new audiences without having to take on all of the risk and effort yourself. There are two primary ways to enlist the help of others when franchising yourself: partnerships and outsourcing.
Partnerships are collaborations between you and another business owner, usually in the form of joint ventures, or single projects that both teams contribute to. For example, if you ran a makeup company, you could partner with a beauty blogger to create a new line of lipsticks.
Sometimes, partnerships create a completely new business that is collectively owned by the partners. For example, if you were a fitness instructor, you could partner with another fitness instructor to create a new private training gym.
Regardless of the project or business, there are a few things you and your partner(s) must agree upon:
Outsourcing is the process of hiring outside contractors to help with the management of your business and the development and fulfillment of your product or service, thus freeing up your time to work on other ventures or other areas of your original business. There are many pros and cons to outsourcing, and its usefulness varies from business to business.
Companies that promote the outsourcing process say the following:
Companies that reject the outsourcing process say the following:
Affiliate programs are outsourced marketing agreements in which a business offers a percentage of a sale to an external party in exchange for that party marketing their product. For example, many podcasters participate in affiliate programs. Companies reach out and give the podcaster a unique discount code that the podcaster then shares with their listeners. Every time a listener purchases a product using that unique code, the podcaster is given a percentage of the sale.
As a business owner, affiliate programs can be instrumental to reaching a wider audience. However, if you offer a small commission, don’t expect affiliates to do much more than the bare minimum of the agreement. If you want to encourage greater participation, offer a better rate and make your expectations clear.
As your business comes into its own, determine how much you want to expand. While some business-owners dream of taking over the world, others just want freedom and stability without the added stress of growing too large. To grow your business the way you want to, define the ideal size of your company and invest time into its development.
To make effective decisions about the future of your company, you need to know what the ideal version of your business looks like. If you don’t want to worry about the stress of expansion and aren’t concerned about making more money, you may want to keep your company small. This allows you to keep your stability and freedom without sacrificing your personal life.
If you want to make more money but don’t want to sacrifice too much ownership of your product, you may want to consider a mid-sized model. This allows you to expand your business and reach a wider audience without being beholden to larger corporations or mass markets. For example, if you made designer sunglasses, you could maintain your mid-sized business by hiring employees to meet demand while refusing to outsource the creation or distribution of your product.
If you want to make a lot of money and aren’t concerned about the ownership of your business, you may want to consider a “built-to-sell” model. A built-to-sell business is a business created with the express purpose of being sold in the future. In a built-to-sell model, your business must have its own identity and must be scalable because a potential buyer wants to be able to separate you from the brand and grow the organization according to their needs.
The most scalable businesses are built on a concept that is both valuable and teachable. For example, you could create a business that conducts financial research to build personalized reports for businesses. This information is valuable to companies, but can also be taught to a large number of employees.
Note: The “built-to-sell” model is different from the “$100 startup” model. Where the $100 startup model is built on a passion and requires almost no capital, the built-to-sell model isn’t built on personal interest and requires more capital upfront.
As your startup grows, you may find yourself spending more time fixing problems than working on the development of your company which limits your potential for growth. For example, if you’re spending all of your time dealing with a faulty website or responding to emails, you’re not focusing on the long-term trajectory of your company.
Even if it’s just for an hour every morning, take time to take actions that will improve your business, not just maintain it:
As you create a development plan, you’ll need to keep your eye on a few key metrics:
Select two metrics to look at every day and leave the rest for biweekly or monthly reviews. Every company is different, so take the time to find the metrics that mean the most to you and your business.
Failure and Unwanted Advice
As you grow your business, you will inevitably fail at least once or twice. Don’t let these failures stop you from taking action and growing your company. Instead, learn from your mistakes and use the knowledge you gained to navigate future issues.
Whether you’re struggling or thriving, people will give you their advice, whether you want it or not. While other people can provide useful information, you ultimately have to trust your own judgment. Your company is yours to run, and you have to make choices that align with your perspective, not the perspective of others.
Growth requires more funding. Make adjustments to your current model to ensure that you're maximizing your revenue.
List 2-3 ways you can increase your average price per sale. Think about upselling, cross-selling, and making sales after a sale.
Describe 1-2 new products or services you could offer to existing customers or clients.
How might you develop a new product from your existing service (or vice versa)? (For example, you could create a subscription model themed around your product for product-to-service, or write a book about your service for service-to-product.)
Franchising yourself through partnerships and outsourcing helps alleviate your workload while building relationships with other business owners and new audiences.
What kind of business could you develop an effective partnership with? Do you have any specific organizations in mind? Think about your product and how it could relate to other products or services.
What elements of your business could you outsource? What are the pros and cons of doing so?
With these pros and cons in mind, do you think that outsourcing could be an effective resource for your business? Why or why not?