A business has to make MONEY! So what are your revenue streams, and how do you find more? We breakdown some money-making tips for you to apply to this next section of your business plan.
Haven’t been keeping up? Check out last week’s tips. Let’s get started….
Now that you have figured out what you want to do, researched your market, found your mentors, and defined your competitive advantage, its time for you to discover the ways that your business can make money.
This section requires some creativity to uncover some hidden revenue streams that take your business from a mom and pop shop to a megastore (…if thats what you’re looking for).
Nail The Obvious
Write down all your obvious streams of revenue. If you are creating a coffee shop, those would be: selling coffee, tea, coffee mugs, desserts, etc. Write those all down in a list. Next to each item, write the price-point. Will your coffee be $4 or will it be $.50. Think about it, a higher price doesn’t always mean more revenue. A higher price might attract a smaller amount of people. Whereas a lower price-point might attract a larger crowd.
Match Your Pricepoints To Your Marketing Positioning
If you are creating the ‘anti-Starbucks’ coffee shop, then your price-points will be a lot lower. But if you are creating a Parisian-style coffee/tea shop, then your price-points should match that experience. What we are trying to inforce is the point that your price illustrates your marketing plan.
If you walked into a business that’s positioned as the “Anti-Starbucks” but your price-points are higher than Starbucks, then the pricing doesn’t match your message.
And that’t not only for coffee shops as this can be translated into any business.
If you are creating a prescription cream that fights acne, your price-point would either make you appeal “generic” or a more commercialized version.
Compare Your Pricing To Your Market
You want to make sure you keep your price-point in line with your market. Twenty-dollar coffees may be above the demand of the market of “coffee drinkers”. So take a second to ask the people around you, how much would you pay for this?
Think About “Add-Ons”
Create revenue packages that allure customers, but also drive business. Businesses do it all the time. To continue our coffee shop example, you can run specials that would charge only $5 for a coffee, dessert, and newspaper. Sounds like you’re selling a lot? Maybe not if the typical coffee buyer only purchases a cup of coffee for $2. For only $3 more, they get an EXPERIENCE. By combining the items you are selling, you offer added value to your customers and more money in your pocket.
Merge Business Ideas
This is the FUN part! You have a coffee shop, but you WILL NOT only be a coffee shop! Look around, what other businesses benefit from a coffee shop? Hmmm, maybe the music that’s playing can be turned into an added revenue stream. But lets not ONLY sell CDs to your customers, sell the opportunity of have music being played in your shop to a record label! MORE $$/LESS WORK! Now you partnered with a record label who will have the opportunity to join in on your experience. But not only that, the mugs you sell can be from the craft store down the street, and you get added revenue from them by allowing them to feature their products in your store. As you MERGE your business, you have the chance to make more money, increase your business connections, and add added value to your customers.
Focusing on the numbers is sometimes the hardest part. Next week we get a little into the nitty gritty of the numbers game by teaching you how to do the actual math. But this week you learned how to price your product and add more revenue streams to your existing business.
Keep pushing Girltrepreneurs!