A Tactical Guide
The funny thing about money is that it’s an artificially limited resource controlled by The Federal Reserve. The Fed tries to manipulate our economy by changing the amount of money in circulation, the money supply. In the U.S., money is not a precious metal or non renewable resource and it’s not backed by gold. It’s printed on a machine. Most transactions these days aren’t even done in printed cash, they happen through bits and bytes and binary codes going from one bank server to another.
Just stop and think about how weird that is. We’re all in on this belief of value because if we aren’t, then what the fuck are we doing with our time and our lives? Money is ultimately backed by our collective belief and our collective agreement to trade things we make and services we provide for paper that tells us how valuable our contributions are. The whole world is in on this belief.
This thought process is useful to me because it helps me illustrate the fact that we create “valuable” things out of nothing and that we’re not all competing for the a limited number of gold bars. You can exchange your debt for something valuable - a degree, a car, a house. Then you must go and create value so you can pay back that debt. It’s kind of amazing.
What I’m trying to say is, it’s possible to increase the amount of money you make. Even though your resources will always be limited in a sense, I want you to expand the limits you’re currently imposing on yourself. I’m sure many of you believe in the possibility of earning more, but I’m certain many of you don’t. Are you the person who isn’t valuing their work properly? Do you think you need to work crazy hours for crazy cheap because you’re paying your dues? If that is you, it's time to let go of the beliefs that aren't serving you and time for you to fuck up the equation.
First, Be Open to Earning More
This might sound like a silly suggestion. But as I illustrated above, mindset is a powerful thing. We all have a friend or we have all been that person who has or has had a belief that is limiting. A limiting belief is exactly what is sounds like. It’s a thought in your head that has been played on loop so damn much that you’ve internalized it into part of your belief system. And the belief is holding you back.
Here are some examples of limiting beliefs: I don’t have enough time to work out, I don’t have time to eat healthy. I don’t have enough money to travel. I could never start a business.
Of course, we can’t just believe things into existence, we have to try to manipulate events in order to create an outcome. And sometimes there are circumstances totally outside of our control, but there are still things that we can control. So focus on those things. Belief is one of those things.
If you don’t believe that you could be an artist who actually does art for a living, you might not see opportunities that pop up that would help you reach your goal. Your beliefs could prevent you from acting on these opportunities.
Examine your beliefs surrounding your ability to earn more money. If you lack the skills, education or experience, it’s reasonable that you might not be able to earn more until you level up in those areas. But if your beliefs are rooted in some bullshit that isn’t true, it’s time to let go of what isn’t serving you. It takes time and patience and practice.
So now that we’ve addressed our #feels. Let’s dig into some tactical ways to increase revenue.
Change Your Pricing
Stay on top of what your competition is charging. Even if you don’t compete on price, it’s good to know what the industry standards are and how and why they deviate from that standard.
You can lower your price, hoping to attract more customers and clients so that you end up with more sales and more revenue. You might decrease your margins, the amount you profit on each transaction, but it’s possible to earn more revenue overall.
Lowering your price might mean you’ll serve a different type of customer or client, perhaps one that is price sensitive. I’m important to understand how your pricing strategy may impact the customers and clients you attract.
You can increase your price and make more revenue without having to increase sales.
Let’s look at my dude Yohan’s business. Yohan makes logos for new businesses. Last year he had 30 clients pay him $500 each for a logo design. So that means Yohan made $15,000 designing logos. (30 clients x $500 = $15,000)
This year Yohan wants to make more scratch and he wants to make it happen by raising his prices. So let’s say he increases his fee to $750 and works with the same amount of clients, 30. He can expect his income to increase to $22,500 (30 clients x $750 = $22,500).
Cool. Easier said than done, right? The thing about pricing is that the market determines the price someone is willing to pay. And the price someone is willing to pay is based on the perception of value that they’ll receive.
If you’re increasing your prices, you might be serving a different type of client. A different type of client might have different expectations. Make sure you’re ready for this.
If you want to raise your prices, how will you communicate the increase in actual or perceived value? Communicating the value of your work is part of your job.
This might happen naturally. For example, an interior designer who has her designs published in Architectural Digest and Elle Decor has increased the perception of value just by association. Authorities in the industry have tipped their hat and said, this designer is excellent. And the designer might have so many inquiries that she can easily increase her prices without anyone questioning the value of her work.
Another example is a wedding photographer who launches a new website, with new copy and offers new service packages. Through that channel of communication, the photographer is describing the value their clients can expect to receive from their services.
Increase Your Customer Base
Let’s go back to Yohan the logo dude to illustrate this example. If Yohan wanted to keep his price point at $500 because that’s the type of client he likes serving, but he wanted to increase his revenue, he might take on more clients. So instead of serving 30 clients, he takes on 45. His revenue is increased to $22,500 (45 clients x $500 = $22,500).
The different here is that he has to serve more people. This might be great because he has his process masterfully practiced and it’s easy for him to take on additional clients. He can comfortably crank out logos at that volume.
Increasing the volume of customers or clients doesn’t work for everyone though. If your process is intense, time consuming or requires a lot of energy, it might not be a good idea for you to take on more clients. Beware of the risk of biting off more than you can chew and sacrificing the quality of your work.
How to Reach More Customers + Clients
Expanding your reach and boosting your marketing is an obvious way to get more customers and clients. Make sure you to understand who and what market you’re targeting, use the proper language and channels to reach them. For example, you might want to use Instagram ads to reach a younger, app-obsessed, early-tech-adopting consumers. If you’re looking to reach baby boomers, you might go for Facebook ads instead.
Review your distribution channels to examine how effective they are: etsy vs. ebay vs. creating a full-blown website and trying to drive visitors there. Should you look into wholesale in addition to retail? For services, should you join Facebook groups or online communities to find clients or are you a direct mail kind of business? Don’t forget: the channels you use should be determined by the audience you are trying to reach.
Sell Other Things to Your Current Customers + Clients
Selling more to your clients could be through the classic upsell. You already know what an upsell is. It’s when you get asked, “Would you like fries with that?” The dude selling you the fries knows you’re already pulling out your wallet and is hoping to add a few bucks to your bill. If you’re running a product-based business, this might be a natural way to increase revenue with complimentary products. For example, you can sell a bunch of different DIY kits or maybe a variety of dog accessories. Yes, this complicates things because now you have more inventory, different margins on different products and just more variables in the mix. Remember, there is no free lunch; upsides do come at a cost.
The key to selling more is that you must have more to offer. Back to Yohan. He can do more than one logo for each client, but the client must have the need for more than one logo. Maybe some of his clients have more than one business or play on a dodgeball team that needs a logo, but what if most don’t.
So if he wants to serve the client more than once, he needs to serve them in a different way. Maybe he can offer a website design package. Maybe he can offer an entire branding package. Maybe he can offer copywriting services. But remember kids, get good at this or hire people who are good at this. You can have your clients pay you to learn to a certain extent.
Yes, this complicates this for Yohan because now there are more variables, different pricing, maybe freelancers he might need to bring on to help him with the project load. So why would Yohan want to expand his freelance practice? Some small businesses say repeat business is where it’s at. Sixty-one percent report that more than half of their revenue comes from repeat customers, rather than new business. So all hassle might be worth the benefits.
Sell More of the Same Thing: Have More Frequent Transactions
Can you get your customers to buy more of what you’re selling? Depending on what you’re offering, it might not be a possibility. A wedding photographer (hopefully) has a very low limit on the number of times he can sell the same client(s) the same service. But somebody selling artisanal bone broth could have some customer who buy ten mason jars of bone broth a month and another customer who buys thirty mason jars of bone broth a month.
If you can increase the frequency of transactions, how can you do it? That’s the five-million-dollar question. Probably good old customer service: add value, listen to their complaints, communicate in their language, be easy to do business with.
Ultimately all of business is developing relationships. When you’re making sales or your client is going through the experience of paying for your service or product, you’re developing a relationship with them. These relationships are powerful AF. For example, are you one of those grown ass adults who fucking loves Disneyland? That’s ok if you are, I’m not judging you. But what I am judging is how Disney, the company, understand this relationship and develops and nurtures it from childhood. It’s pure brilliance.
It’s obviously important to have good relationships with suppliers and contractors because you want your life to not suck and you want happy customers. Easy. Less obvious relationships are ones with companies, non profits or associations that might be be in your industry, but are not direct competition. An example could be in Yohan, the logo designer, hanging out with owners of boutique companies that develop brands. There might be instances where the customer isn’t a right fit. So instead those customers get referred to Yohan.
Another type of cross-promotion relationship may be with companies that are outside of your industry, but you have the same market. So a new, hip brewery might sponsor a live music event because they want all the young people to love and buy their beer.
Find What Works for Your Business
There are lots of different ways to increase revenue. With increased revenue you can invest and expand your business. You might also just want to pay yourself more so you can buy a bunch of shit or get your ass out of debt. Whatever the reason, all of these strategies can be nuanced. If any of them seem like the right fit for your business, I encourage you to nerd out. I want you guys to make that funny paper so you can focus on your family or your art or just so you can sleep at night.