“It’s unthinkable that I would do anything in my business and not make a profit.”
Just the other day, my client said that to me, and it made me so excited. She finally got it! Have you ever thought about that?
Have you paid much attention to your profit margins lately? Perhaps in the last quarter, you noticed a dip in earnings and a spike in expenses (a common pattern during the summer months) and you’re looking for ways to even the scales? Or maybe you’re putting together your annual projections and hoping to pocket a bigger holiday bonus this year?
No matter what income level you are currently at in your business, there’s always room for more profit. After all, a positive bottom line is a surefire sign that your business is growing, and ready for strategic reinvestments that will further speed up that growth. So if you’ve got big goals and audacious dreams on your horizon, you’ve got to make profitability your top priority. If you want to swipe the top bottom-line-boosting tips, techniques, and tactics that helped me to scale my business to 7-figures and beyond in record time (yes, the very same strategies James and I recommend to our clients), then keep on reading.
Now, before I begin, I’ll be the first to admit that profitability wasn’t quite at the top of my mind when I first started my business in 2014. Don’t get me wrong, I was prepared to put strategies in place to increase both my impact and my income. Having lived on a $25k salary for years and worked a tireless string of unsatisfying jobs, I was ready for my business to afford me a more elevated lifestyle—and more than willing to put in the time and the energy needed to make it happen. I knew I had a purpose for the money I wanted to make, and most importantly, that I had a mission worth buying into: to help millions of women worldwide to create a life better than their dreams.
What I was not prepared for were all of the costs that came along with running a business of my own (yes, even a service-based coaching business that requires very little upfront capital to get off the ground). From monthly software subscriptions to website hosting and development, to investing in high-level mentors and eventually making strategic hires and acquires… the expenses kept racking up at a much faster rate than I expected.
I’m eternally grateful that my business scaled very quickly (going from making $442 in my first month to surpassing 7 figures a mere 18 months later), but truth be told, keeping track of our finances was a feat I hadn’t yet mastered. In fact, it took me a few years to get to the place where I was actively working towards profit, not just revenue. I know this is the same for many business owners.
And whilst I’m a firm believer in the circularity of money, and that any money you invest in yourself and your business returns to you tenfold, at the time, over the years, there were a few instances that motivated me to step up into my CEO seat, pay more mind to our numbers, and adjust both our spending and our revenue-generating activities as we go.
Three things became clear to me:
- Increasing our profits would open opportunities to invest money back into the business (be it through high-vibe experiences and mentorship, expanding my team, or building out better systems to save time and make us more money).
- This would, in turn, exponentially increase both my personal income (thereby allowing me to fill my life with the luxury I desired) and my company’s impact (because I’d finally be able to serve more people despite relying less on my time)—the very goals I had in mind when we were starting out.
- There are only two major ways to increase your profit margin: cutting your expenses and growing your revenue. Naturally, we would do both, but the majority of my focus would go to growing our revenue.
Why? Because whilst spending less may seem like the more attractive of the two options (because we’ve always been conditioned to believe that spending money is easy but earning it is hard), sustainable success is all about focusing your efforts where they make the biggest difference.
And for me, cutting a few subscriptions and services out of my monthly bank statements wouldn’t matter much in the long run. What would matter were the experiences and transformations I could offer to our clients. So I checked in with what the abundantly-minded CEO version of me would do, and got to work on the strategy.
1. Prioritizing revenue-generating tasks, and pushing the rest
We’ve all heard the saying that time is money—it’s one of the oldest mantras in the book. It goes to follow that if you want your business to grow not only in revenue but in profit, too, you owe it to yourself to figure out where your time is worth the most money, and focus the brunt of your efforts within this area.
In his bestselling book, Clockwork, Mike Michalowicz emphasizes the importance of finding your QBR (Queen Bee Role), which is the set of tasks and functions that only you can do best—the ones that make you essential and irreplaceable in your business. At the beginning of my own business journey, I definitely wasn’t acting within my QBR. Instead, I was trying to do everything myself—or at least keep close watch over every single piece of my business. But over time, I realized that keeping a tight link between my time and my company’s outputs was not the most profitable way to do things, and instead started building a set of time-saving systems and processes to free up space in my schedule. That’s how I was able to focus on serving more coaching clients while leaving my team to subserve the rest.
If you’d like to hear about the long-term benefits this brought to my business (apart from boosting my bottom line), then listen to episode 237 of the I Heart My Life Show, where I talk about finding balance in between hustle, hard work, health, and happiness.
2. Focusing on retention and referrals
Did you know that acquiring a new client or customer can cost five times more than retaining an existing one? In fact, according to recent marketing studies, increasing your retention rates can cause a 25-29% rise in profits—making this a step you definitely don’t want to miss.
People are naturally creatures of habit. We reach for tried, tested, and trusted solutions more often than we’d care to admit. So whilst it might be tempting to ramp up your marketing efforts and focus on lead-generation when you’re trying to boost your bottom line, your biggest line of gold might be hiding where you least expect it: within your existing client pool.
As a coach, service provider, or even an e-commerce business owner, reputation is everything—so it goes without saying that the cornerstone of a successful retention strategy is always the quality of your service. That’s what keeps clients and customers coming back on autopilot, writing up glowing reviews, and sending friends, family, and business besties your way. You might already see this happening organically in your business—but if you want to see your referral rates skyrocket, I always recommend implementing a refer-a-friend program or affiliate scheme. They take a financial (and time) investment upfront, but pay off exponentially—and with minimal extra effort on your part.
But don’t just take it from me—here’s what my VIP Day client Jen has to say: “Our next product launch was by far our most successful yet (we tripled our revenue (after implementing the affiliate partnership ideas Emily suggested), and we totally have her to thank for that… and the fact that we’ve since tripled our revenue again.” See? Proof that retention works.
3. Continuously raising your rates
Here’s the thing: I know prices are a contentious topic. Most traditional business advice will tell you to make your rates competitive in order to have an edge on other practitioners in your field of expertise… but in my books, that line of thinking is bound to keep you forever out of pocket.
So many female entrepreneurs are afraid to raise their rates because their money blocks are keeping them stuck—whether they are worried about how their work will be perceived or received at a particular price point, or because they’re questioning whether their skills and expertise are up to par. But the truth is, keeping your rates low isn’t doing your services any favors, and in fact, it might even be actively repelling potential high-ticket clients. After all, the link between cost and quality has been inextricably woven into our brains (which is why we’re willing to spend more on a Chanel purse than we are on one from Target).
My challenge for you today (and something I recommend that all my clients do the moment I meet them) is to raise your rates right now—especially if the very thought of doing it fills you with dread. And continue to raise them as your experience and expertise increases. I know this might feel difficult at first, but trust me—exchanging money means exchanging energy, and your soulmate dream clients desire the opportunity to invest in themselves at a high level. So let them.
Creating a scalable, sustainable, and, above all, profitable business model is your one-way ticket to freedom, Lovely. So don’t shy away from the numbers like I did in my first (few) years of business, but embrace them instead.
Which one of these strategies are you implementing ASAP in your business?