How to Develop Your Products and Services Effectively
In previous posts I covered the importance of developing products and services that are popular and selling well but also have a unique twist that will make them stand out from the competition. I hope you followed through with the action plan to develop your USP.
A few months back I mentioned that some of the big mistakes business owners make. Let’s just list them again here as a reminder before we focus on your money making system:
• Poor quality products
• No niche
• No marketing funnel
• Poor website
• No SEO
• Ineffective sales conversion
• Wasting money on ineffective marketing
• Not understanding what it takes to run a business
• Giving up too soon
• Listing features not benefits
• Offering something people don’t want
• Poor communication
• Using rewards inappropriately
Hopefully, you are starting to address some of these issues…
This time I want to reinforce the importance of creating a complete money making system that will become a multi-layered system producing multiple income streams. First let’s look at the ideal moneymaking system.
The ideal moneymaking system
The ideal money making system has three basic components:
• Low cost
• Low risk
The ideal moneymaking system will be low cost or preferably require no investment to get going. That doesn’t mean it won’t cost anything but it will cost you nothing. Billionaires such as Andrew Carnegie bought many of his businesses with nothing down and Robert Allen is one of the masters in buying property for nothing down.
The idea is to use other people’s money to fund your business or develop your products. Get business grants, investment from business angels, bank loans (within reason!), business partners or sell assets or stock that are no longer useful – but avoid using your own money to fund a business project.
Another tip is to create assets to fund your liabilities if you want to be wealthy. For example, a luxury car is a liability if you just use it for your own pleasure but could be an asset if you use it for a chauffeuring service and make a profit from it. Similarly, a private jet is a liability if you just use it for your own lifestyle – jetting around the world – but if you run a private jet charter business and make money from it it becomes an asset.
See what I mean?
You should work for your assets and let your assets pay for your liabilities. If you continuously work to pay for your liabilities, you will always be chasing more money. Assets also include stocks and bonds, property, self-sustaining businesses, an antique collection and so on – basically, things that can earn you money.
The point is, your products and services should be assets that will make you money to fund your liabilities. For example, if you write a book, it is an asset, if you have a machine that can get rid of wrinkles, it is an asset. A huge stock of widgets in your lock-up that are not selling is a liability – it is tying your money up.
So, reassess your products and services in these terms and see if you can reduce your liabilities and find ways to increase your assets.
One you reduce your liabilities as I have suggested, you automatically reduce your risk. But there are other ways to reduce your risk.
Consider making your business a limited liability corporation to limit your personal risk, look at other legal entities to reduce risk such as contracts and so on. Take out adequate insurance on your business and cover your assets to reduce risk.
Also, as we go through this course, you will learn about the entrepreneurial qualities needed for success and how to develop those qualities to reduce the risks you yourself impose on your business through faulty thinking.
A successful moneymaking system ideally should be self-sustaining in terms of time, management and energy. This doesn’t mean you don’t put time or effort into your business. It means that you should be working toward making it self-sustaining. Once established, your business should be able to operate without your continual input. This frees you up to work on the next moneymaking project and allows you to create multiple income streams.
Your aim is to get your project on automatic pilot as quickly as possible. For example, if you write a book, you pass it over to the publisher who organises all the production, marketing and selling of your book, leaving you free to write the next bestseller. If you run a health club, for instance, you should employ staff and managers to run the business, leaving you free to start up your next business.
Wealthy business owners delegate and outsource much of the day-to-day work, leaving them free to develop new ideas for their current business or get new businesses off the ground, creating multiple income streams. The power of creating multiple income streams is that if one fails or dries up then it’s not critical as you have other income streams to rely on.
The aim is to create a self-sustaining system (or systems) that produce cash flow without your continued input. Your job is to come up with new ideas, implement them and then get others to follow through with the day-to-day running or preferably put the whole system on automatic. This can be achieved with digital products sold over the Internet and to a degree selling physical products from a website, especially if you use drop shipping.
Your income streams should be self-sustaining but in order to expand your business and make more profit, some, if not all your income should be residual income – that is a recurring flow of money that comes in whether you are there or not. Some examples of this are interest paid on a bank account, appreciation on your house, stocks, equity value in your business, commissions, royalties from books, films, software or patents or a website that sells through an autoresponder.
We will look at the marketing funnel in more detail in later posts and I will help you to develop a more profitable range of front end and back end products and services and show you how to offer them so that your new customer becomes a lifelong customer.