May 22 2010
Once you know your niche market, how do you make more money?
For solo business owners, the irony of growing a business is that at the beginning you are focused on bringing in any amount of money. Many people begin their business after leaving a job or completing a training program.
Whatever the circumstances, most solo entrepreneurs have no savings and no start up cash. They use credit cards, do everything themselves and focus on bringing in cash right away so they can eat and pay their rent. Sound familiar?
Entrepreneurs in this category are some of the most hardworking people I know. They put in long hours and work all the time. They are driven not just by need, but by their passion and desire to be successful. However, money is important and they also want the freedom. Freedom from stress and worry about their cash flow and freedom to be able to take a vacation without more huge credit card debt.
The irony is that, in order to make more money you have to spend more money. There is an order to this process:
1. Know your niche market inside and out. Know exactly who you are helping and why. Know exactly what your people need and what they are willing to pay for.
2. Once you know that, develop your main service and product around their problem and how you can solve it.
3. Develop more and more products and services that continue to offer help to this same group of people.
This 1-2-3 process works. You will begin to earn more money, your cash flow will increase as there are more income streams, however there are also more financial outlays. It cost money to make money.
1. You can’t do everything yourself eventually. You will need to hire people to help you for specific jobs.
2. You will need to update your website or build a new one that better reflects your business.
3. You will need to hire a mentor because if you don’t you will not have the support to face all the issues and problems you will need to overcome along the way.
4. You will need to spend money on new equipment, software and tools.
5. You might need a new office.
So, how do you actually increase your profits with this scenario? It has to do with strategic planning, developing income streams that become self-supporting after the start-up costs and keeping your long term vision clear. I now understand the old saying, ” It takes five years before most businesses make a profit.”
