Cheatcodes: Massive Growth, 10% Rule, and How to Live
In today’s newsletter, we’re talking about the pleasures of massive growth, a weird business equation to explode your business & a book quote about charging more.
Motivation
Massive growth happens when you realise that taking a loss isn't as big of a deal as holding fear is.
Always prefer loss to fear, and take the chance.
If I had a tattoo, I’d have this on it. (I’m scared of needles so no chance of this happening.)
Business Framework
When people ask me how to grow their business, I always refer to the 10% rule.
There are only 3 ways to grow a business:
Increase the number of customers
Increase the average price they pay for your offer
Increase the number of times they buy
If you want to grow your business, the key is to focus on one of these and just grow it by 10%.
Putting it into practice
Let's say you make £200,000 in your social media services.
You have 100 clients who pay you £1000 per service and they pay you 2 times a year.
That’s £200,000 per year business.
How would you grow this business using this framework?
1. Increase the number of customers
This will involve doing more outreach, more marketing to let new people know about you.
Let's say you increase that to 110.
2. Increase the average order value of a post
Once you’ve sold them initial services, then you could sell them consulting or trend forecasting —something that gets them to spend more with you.
This way the average customer who would have just spent £2000, maybe spends 10% more, or £2200.
3. Increase the number of times they buy
You create tailored packages around times of the year... Halloween specials, New Year’s specials, etc.
By doing this, you give customers a reason to spend more with you and they will.
That way you increase their buying frequency, say by 10%, and make more money from each customer.
So now we’ve gone from them paying you on average 2 times a year to 2.2 times a year.
Here’s is the crazy part:
110 x 1100 x 2.2 = 266,200
The increase of just 10% of the individual parts means that you end up making a 33% increase in your business.
Kinda crazy when you see it like that right?
Use this in your next planning session.
Book Excerpt
I just finished reading this book called How to Live by Derek Sivers. It’s very short at only 27 chapters.
Every chapter is a way to live but they all seem to conflict.
Below is one of my favourite passages:
Make it stand out
Whatever it is, the way you tell your story online can make all the difference.
I love this quote because for many entrepreneurs, they get squeamish about raising their prices. But it is one of the biggest things you can do to grow. The world is full of money. Go and take it.
That’s all for today. If this helps at least one person then it’s done its job.
Keep winning,
Timo
