I am terribly bad at following blogs. So far, the only blog I actually read every day is Blondinbella.se, one of Sweden’s biggest blogs run by a 25-year-old female entrepreneur. But since I started blogging myself, I’ve been on a hunt for new interesting blogs, preferably business related. Are there any blogs run by young ambitious females like myself? If you know one or are one, please let me know!
Anyway, on this hunt I found an interesting blog post by www.chic-ceo.com about the author getting four rules from a billionaire she knew that you should follow if you want your business to make money. Here’s they are;
“1) Don’t do retail.
Yikes! But Stephanie! I’m already doing retail! It’s ok. Look at IKEA. They are retail and wildly successful. Sara Blakely with Spanx, she’s a billionaire and she’s crushing it. Remember, these are his rules. But that doesn’t mean it’s not a good one! Selling B2B rather than B2C can turn in to really big profit, really fast. The deals tend to be bigger, the work more focused and sales efforts more targeted.
You may have heard the 30% margin rule. If you don’t have 30% margins, you won’t have enough money to have a profitable company. And if your margin is higher? Yeeeee!!!! That’s awesome. One of my best friends used to work for a company that made shoe inserts. A very big company. They created inserts for around $3 and sold them for over $200. That’s a healthy margin right there. A standard 30% margin on a $3 product would be around $4.35. But $200, that’s around 96%. Holy guacamole.
Now, don’t go thinking you can up your prices if the market won’t bear it, so you need to get creative. Some products that provide massive margins are info products or software products. Anything that you can make once and sell over and over again.
Does your business have healthy margins? Like HEALTHY margins? What can you do to up that percentage?
Annuity: aka recurring payments. Selling your customer over and over again is easier than finding a new customer over and over again. But the key here is necessity. Recurring payments for your product or service must be a necessity – or a perceived necessity to your customer.
Think of your cell phone bill, the wifi, your gym membership. Your product or service needs to be so vital to your customer that they can’t live without it. If it comes to either having a cell phone or your BirchBox subscription – which one would you choose if you had to?
Your product needs to fulfill a big need for your customer so a recurring payment is second nature to them.
Also known as sales. Ramit Sethi wrote about passion this week, and I recently wrote about it in my book “No One Told Me, Until Someone Told Me” – the worst thing someone could tell you is to follow your passion and the money will come. (You need to be solving a problem… but that’s for another post.)
Actually, make some sales and the money will come. Selling a lot of a product that creates annuities and has an amazing margin will ultimately lead to wealth according to my billionaire friend.”
I like these rules. I would like to get into retail at some point but I think it could be smart to save up for a start capital or get funding somewhere. What are your thoughts? Visit www.chic-ceo.com for more blog posts like this one!
I wish you all a wonderful Wednesday, keep hustlin’ x AE <3