How can you position your business to make more profit?
To make the most profit, your business should be jammed as far as possible into one of the points of this triangle. The closer you are to the middle, the harder it will be to make a profit.
Is your business Different?
The Elite Swimming Academy was the first swimming school run by an Elite Channel Swimmer, Ed Williams. He hires exceptional coaches and limits numbers to just three children per class. Their results are outstanding and they are widely acknowledged to be the best swimming school in Cambridgeshire. They charge premium prices and always have a waiting list.
Is your business the only, the first or the best? If so, you are more likely to make a good profit.
What’s your Niche?
A big mistake is to think you can appeal to everyone – that puts you right in the low profit, middle of the triangle section.
A niche product or service solves a specific problem and more people are willing to pay for that than something cheaper that doesn’t quite do it.
What do you do if you need power tools in a place where there is no electricity? Buy Lehman’s non-electric tools. They ship them all over the world to developing countries; environmentalists living in remote areas; people with unreliable electricity living on islands and mountains; second home owners, hunters, fishers and cabin dwellers; the “chronically nostalgic,” and even Hollywood set designers looking for historically accurate period pieces.
What do you do if you have curly / frizzy hair that is hard to manage? Go to Blow -outs on the way to work. They offer a quick blow-out without washing, cutting or colouring and have queues out the door.
What do you do if you want to network but don’t want to be sold to? Join Drive – the business network that works without elevator pitches.
Other examples of niche services are salsa classes for overweight men, VA services for single parent business owners, Fast Casual restaurants for those who want good food in the fast food style.
The more niche you are, the higher your profits are likely to be.
Selling on price is tricky.
“You won’t find it cheaper” only works for high volume businesses like airlines and supermarkets. Every aspect of the business needs to be designed to keep prices and profit margins low – not recommended for a small business.
However, the things that people buy because they’re expensive or exclusive, can make high profits because value is all about perception.
When you have a precious parcel to send, you look for the reassurance of a high priced courier.
When only the very best will do you’ll find very profitable businesses catering for people for whom low prices will never be an option.
If you can proudly claim to be the most expensive “because you’re worth it”, you’ll attract a certain type of customer and your profits will be guaranteed.
If you need help figuring out how to position your business to make more profit, contact me and we’ll have a chat!