Welcome to week 3 of this month’s series “Profit Plan” where I’m teaching you the step by step process of how to build a profitable business!
So far we have talked about your product/offer, your goals and this week we are diving into pricing strategy.
Once you’ve created your offers and set your goals it’s important to know how to price your offers correctly in order to help you hit your goals.
Let me show you how to do that:
Step 1: Look at your current monthly financial goal
The first thing you want to do is look at your current monthly pricing goal. Look at how much money you want to make every single month and ask yourself “how close am I to getting there right now?”. Are you close? Far? No matter what the answer is there is NO WRONG ONE and the key here is the awareness.
Step 2: Look at your existing pricing and offers
The next thing you want to do is look at your existing pricing and offers. What I want to recommend that you do if you have multiple offers is that you pick the average price of those offers for this exercise. Once you have the average price go on to the next step.
Step 3: Divide your monthly financial goal by the average price of your offers
Let me give you an example here. If your monthly financial goals is $5,000 and the average price of your current offers is $1,000 then you would divide $5,000 by $1,000 and get 5.
5 would be your monthly sales goal meaning you have to make 5 sales in order to hit your monthly financial goal.
Step 4: Adjust accordingly
If your monthly sales goal does not feel doable, for example if you are seeing you need to make 20 sales and you are a service based business that could not handle that workload then you know it’s time to adjust your pricing.
For example, if your monthly financial goal is $5,000 and you want 5 clients per month then how can you create an offer or a package that is a value of $1,000 per month that you can charge for accordingly? This is where you have the space to rework your business model, pricing, and offers based on everything you have learned so far so that you can be 100% sure that you will be PROFITABLE before we dive into selling.
Work through these steps in order to lay the profitable foundation to be prepared for the upcoming strategies.