You probably gave a lot of thought to starting your overall business. But as time has passed, you might not have analyzed the individual products you sell for value. If your small business is the heart of your Financial Freedom, your products are the mouth, nose and digestive system. They bring in nutrients and turn them into fuel that delivers lifesaving nourishment to sustain your endeavors.
So are the products you sell doing a good job nourishing your business?
Whether you’re in a Profit Business or a Legacy Business, the right mix of products is essential to sustainability and growth. To help you evaluate products in a Profit Business, we’ve put together four questions to ask yourself about every product you sell. (You’ll find this process laid out in detail in Module Four of Cash Flow Cure) Keep in mind the questions you’ll need to ask yourself are a bit different if you’re trying to grow a Legacy Business. We’ll address those questions in next month’s Building Your Business article.
Question #1: Are you inspired?
Your small business should be an extension of you. The more passion you have around what you’re offering, the more inspired you’ll be to spread the word and get as many people as possible to buy your product. And the more people buy your product, the faster your business will grow. Be honest with yourself about which of your products and services inspire you the most (or the least) to develop and fulfill against with your audience. What kind of impact do you hope to have?
Question #2: How much profit do you make?
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If someone said you could sell something and make $10,000, you’d probably be on board. But what does that number really mean? What goes into making the product in terms of time, labor and raw materials? In a Profit Business, getting the profit margin as high as possible without turning off potential buyers is key to growth.
Question #3: How much time and effort does it take you (to make this product)?
Are you an essential component in all aspects of your product? Or can you outsource some of the necessary time and effort? If you’re selling a product for $100 that costs $50 in materials and two hours of labor to create, you’re ultimately making a profit of just $25 per hour. But if you outsource the labor for $10, your profit margin nearly doubles with little effort on your part. Remember, your aim is to completely automate and/or delegate any activity you can.
Question #4: What is the product’s growth potential?
Are you offering a product that will grow in value over time? Or something that’s hot today but could potentially see a decline in sales in the next few years? Your answer to growth-related questions like these determines everything from pricing to marketing strategy. They’re a necessary aspect of evaluating the viability of products and services within your business, month after month.
Answering these four questions honestly helps you to see whether your product or service is a good fit. Not only for the business you want to create, but also for your ultimate goal of Financial Freedom. Likewise, shedding products that don’t make sense for you is the first step in making room for products aligned with your vision.
After asking these questions for each of your products, what is a product you were surprised you needed to eliminate? Share with the Business Owner Only Community today!
image credit: Bigstock/Jakub Jirsak
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Makaylah Rogers is the co-founder of MindShift.money. She is a Thought Leader for her generation, teaching people how to rewrite their “money rules.” With an extensive background in wealth building and personal development, Makaylah’s path has taken her into executive roles in various fields including launching startups, real estate sales and motivational keynote speaking.