Help! My Business Isn’t Profitable Yet and I’m Running Out of Money… What Can I Do?

If you’re feeling the pinch, thinking that you have tried everything to make your business work but are still struggling to turn a profit, then this blog is for you! I’m going to be giving you ideas and strategies that you can use to bring back your confidence and create the business you have always wanted from the start…

 Want to listen instead? Click Here to hear this episode of The Abundant Business Podcast

Before we dive into the nuts and bolts of improving your business finances, today I wanted to  start with your mindset. As I’m sure you know 80% of your success comes from your mindset and how you look at whats happening around you… A proactive, successful mindset is essential for overcoming challenges and achieving your goals.

I know that When times are tough, it’s easy to become discouraged and focus on the negatives of whats not happening the way you want it to rather than looking at what actually might be going in the right direction or what good you do have in your life.

Without meaning to come across as a bit woo!.. a positive outlook and focusing on something great can make all the difference…. I can say that because I have had to do it multiple times throughout my business career…  Your mindset shapes your actions, and your actions shape your results.

So, even when things might not be looking as rosey as you’d like them to, remember to stay positive and proactive.

Look for opportunities, learn from setbacks, and keep your vision of success clear in your mind… you can get there but business is a marathon, not a sprint and it can be an uphill battle at the start especially if you haven’t quite understood who your perfect customer is that you want to be buying your products from you!

Now, let’s get into the practical steps in todays episode...

One of the biggest mistakes many product business owners make is not fully accounting for all their costs when pricing their products. This means that you’re actually pricing your products too low and are probably pricing based on what other people are charging rather than pricing based on the value that you provide…

It’s crucial to ensure your prices reflect the true value and cost of your work, whether you have curated the products that you sell, or you have made the products that you sell…

1. So when you Calculate you Costs: Include everything from raw materials and production to marketing, resources, overheads and shipping. Don’t forget your own time and effort either! Calculate how much it would cost to pay someone else to do the jobs you’re currently handling. What would they be charging you per hour? This should be factored in to your pricing because you can’t work for free… and that’s probably why your profits aren’t matching what you want them to be.

2. Pricing for Profit: Once you have a clear picture of your costs, price your products to ensure a healthy profit margin. Don’t just cover costs; aim to make a profit that justifies your hard work and investment… here is where I would suggest that you have at least a 60% profit margin… and if that means you're charging more than your competitors… don’t panic!

Remember this is about the experience, the value, the benefits that you provide.. when you share all of these things with your customers they will be able to shop on value rather than price … after all whats the difference between a high end t-shirt and a t-shirt from a budget shop? It’s value, it’s the materials used, it’s the perceived benefits and its all in the messaging and the way the product is sold!

Step 2: Strategies to Boost Sales:

When you’re running out of money it  is essential to increase sales… however this is the trap that to many people fall in to and think that they need to start a huge discount to lure customers in… well this is just decreasing the profits you would be making and you are only likely to reach on hit wonders who will only shop on a bargain…

Here is what you should do instead…

1. Upgrade and Cross-Sell: Think about your perfect customers and create irresistible opportunities for them to upgrade or buy products that will give them a bigger / better / faster result. This is all about increasing your average order transaction. For example, if someone buys a camera, offer them lenses, bags, or tripods. All of these things will help that person to have abetter experience.

2. Create Bundles: Bundle your products in a way that makes purchasing decisions easier for your customers. When you create Bundles correctly, they should highlight the full value you provide and often encourage customers to spend more without having to make any further decisions. Bundle products that customers tend to buy together, that can give them a greater experience or help to move products that aren't selling well and give your customer even greater value.

3. Relaunch Underperforming Products: If some of your products aren’t selling well, consider a re-launch. This isn’t something I see happening enough… savvy product business owners will always have a launch for any new products… but even savvier product business owners wont just let it happen once and let sales dwindle over time… if sales start to dip after the initial excitement relaunch! Share the benefits and value of these products with fresh insights and new imagery. Show your customers how to use them and why they’re worth purchasing. This will get people talking about them again and feeling the need to purchase.

Step 3: Subscription Models:

Introducing a subscription model for your popular products can ensure you have a steady stream of income each month. This way, you’re not starting from scratch at the beginning of each month… you know you can rely on money landing in to your account on a consistent basis! There is a reason why subscriptions are one of the fastest growing markets worldwide! Because not just consumers like them but businesses love them too!

1. Identify Popular Products: Look at your bestsellers and think about how you can offer them as a subscription. This could be anything from monthly deliveries to exclusive member-only products.

2. Build Value into Subscriptions: Make your subscription even more appealing by adding great value. This could include exclusive content, special gifts or samples from other businesses that you decide to to a joint venture with!

Step 4: Engage with Customers:

Staying engaged with your customers is integral for long-term success and One of the most effective ways to do this is through a weekly e-newsletter. Yes, a weekly one and no, this isn’t too much!

1. Start a Weekly E-Newsletter: Send out a newsletter that provides value to your customers every single week. This can include helpful tips, exclusive offers, and insights into your products. Staying front of mind with your customers is key to driving repeat business and when you're consistently providing them with ways you can benefit their lives and how great your products are and drawing them closer in to your world, the more they will get to know you, the more they will be able to like you and the more they will trust you… and what happens when you have all 3?! More sales!! By sending a monthly newsletter you are sending 3X less content so it will take you 3X longer to build this trust that you need.

2. Showcase Customer Stories: Share testimonials and stories from your happy customers. Share them everywhere! Across your website socials, google, in store, at your market,literally everywhere… nothing build trust as quickly with new customers and encourages them to buy as the words of your current customers… so use them!

Step 5: Optimise Operations:

And my last tip for the day is Optimising your systems. This can free up resources and improve profitability.

1. Inventory Management: Implement an efficient inventory management system to avoid stocking too many products and reduce holding costs, especially if you're storing in warehouses! Use data to from previous months to help you predict demand and adjust inventory levels accordingly. Not all stock will sell the same throughout the year so by knowing the ups and downs of products you can purchase without having a ton of stock sat gathering dust waiting to be sold.

2. Outsource Non-Core Tasks: I know it might seem difficult to imagine this at the moment if resources are low but when you start outsourcing and delegating jobs that aren’t essential for you to be doing. The minimum wage jobs that someone else could take off your plate so that you can focus all of your attention on core to your business, will help you to focus solely on customer attraction strategies to upgrade and cross sell, encourage return business and create better profits for your business. This can be so much more cost-effective than handling everything yourself, stretching yourself too thinly and allow you to focus on what you do best.

Conclusion:

So, there you have it! If your business isn’t profitable yet and you’re running out of money, don’t give up. Take a deep breath, reassess your costs, and ensure your pricing reflects the true value of your work. Implement strategies to boost sales, introduce subscription models, engage with your customers through newsletters, and optimise your operations.

Remember, your mindset is key. Stay positive, proactive, and focused on your vision of success. With determination and smart strategies, you can turn things around.

Book Your FREE Discovery Call 

We will discuss:

- Your Business and where you're at right now 

- Your Success and what that means to you 

- Your Struggles and what's blocking your growth 

- Your timeline and how quickly you want to achieve your goals 

- Your investment and what type of coaching would be most suitable for you 

Book Now