Jessica Osborn [00:00:00]:
You're listening to she's the Business podcast. And today we're talking about the six profitability traps that are keeping your business under earning. Stay tuned. It's coming right up. Welcome back. So I don't think there's any business owner out there that's saying, hey, I don't want my business to be more profitable. I would rather be spending far more on expenses and making less profit. Right.
Jessica Osborn [00:00:28]:
So where can we find more profit? Or where can we avoid doing the things that are taking away your ability to be more profitable? And in reflecting over the businesses that I've worked with over the years and my own businesses, all the lessons and learnings and insights that I've gained in that time, come up with six. There could be more, but I'm going to give you six today. Profitability traps that are keeping your business under earning that are taking away that ability for you to grow for your business to be more profitable. So let's get into them. Number one is having multiple services or products. So this one I think is really interesting because a lot of people are under the impression that they should have multiple revenue streams and the more revenue streams the better, like diversify. And I feel like we, when I look around this is quite old, old school business advice that definitely came from the textbooks back when I was at university in the 90s. And that's certainly how when I look at the businesses that I worked for in my early years, you know, they were taking that approach.
Jessica Osborn [00:01:44]:
And when you look out and see, you know, the, the giant companies, so you know, the ones that are top of the stock exchange, huge organizations with thousands of employees, many of them do have multiple revenue stre. So you might think as you know, a business owner, maybe you've come from one of those type of companies as an employee you're starting your own business, it kind of makes sense to you and definitely makes sense to your brain that that's how you grow a successful company is you have these multiple ways for people to buy from you. However, what I learned, and I learned this way before I had my own business, I was the marketing manager at the Royal bank of Scotland in London and we had multiple brands and business segments that we used to serve and manage all of their digital marketing for. And I remember actually talking to the management and saying every new sub brand and different brand that we're doing, it is just increasing the workload behind the scenes. But it's not actually more useful for the business. Like there's so we've got to every time There's a new brand, you're doubling your workload, then add another one, you're tripling it. It's like the increase in the amount of just minor things, but this is all taking your time and resources that are part of your unpaid effort. So there's a lot more effort and energy and then you're just trying to sell something on the front end.
Jessica Osborn [00:03:20]:
Now also think about it for a minute. Every new product or service requires its own strategy, its own messaging, its own sales system. We've got website pages, you've got onboarding systems, email sequences. Do I need to go on? Everything is multiplied. So every new thing that you create, you're creating a bundle of work. And that means that you probably then need more resources to manage it because, you know, you certainly can't manage all of that stuff as a site solopreneur. So you're going to need more people, a team. So one VA becomes six VAs.
Jessica Osborn [00:03:59]:
And is it making your business more profitable? Well, I learned the hard way that it actually didn't. And even though I knew from my time in marketing that it certainly added a lot more work, every new business sub segment or new brand that they decided to launch would create a pile of mountain of work in the back end. I, I still made that mistake in my own business and, you know, tried to launch too many different offerings, ending up with more systems, more tech, and yes, you pay for that tech, more processes, more people to manage it all. And although the revenue may have been higher, the profitability was lower and it's actually earning less in dollar terms profit than had been before. So multiple services, multiple products, while it may seem smart to one part of your brain, it actually is likely detracting away from your ability to be more profitable. If you could put that same effort and energy into growing your one service offering, then you will find the profitability there because you can make more sales for the one that you already have all of that stuff set up for. So number two is chasing the tactics. So what I mean by that is looking around and chasing, you know, there must be a magical marketing method that people are doing that makes it all work.
Jessica Osborn [00:05:28]:
And so what I see people and entrepreneurs, coaches, you know, people like us running an online business who really want to grow and want to grow profit and revenue, but they're hopping from one spot to another to another, looking for the tactic that's going to be the one that makes their business explode. And every time you do that, you are basically almost starting to build your machine again from scratch. Or you're adding on yet another thing for you to manage. So it's a little bit similar to the first one where it's all this unpaid admin time. And that's another sneaky way that you are adding it, thinking that this is a good idea. It's like, well, I need to be on all of the platforms of social media and I need to now have, you know, maybe a podcast. Haha, ironic because you're listening to mine and then I need a YouTube channel and then I need this and that. And you know, chasing all these different tactics, you don't need to be everywhere in order to be found by your ideal clients.
Jessica Osborn [00:06:31]:
You actually just need to be far more strategic about it. But the main thing is that constantly chasing the new tactics means that you're constantly in first gear development mode. Like learning it and trying to figure it out and actually getting it up and running and started is always the hardest. That is when you're in first year, going slow but burning lots of fuel. Stick with it. Stick with something for longer than that initial test and deciding, oh, this doesn't work and now I'm going to go and chase something else. Actually run with it for a while. It may not work very well when you very first try it.
Jessica Osborn [00:07:08]:
You know, maybe your first webinar or your first live training or workshop or whatever you've decided to do in your business, maybe it doesn't work all that well. But instead of deciding there's a problem with this and that doesn't suit my business, probably does, you just haven't given enough time and effort and energy. So go from the engineer who's building it to now the scientist who's going to figure out, okay, how do I make this run better? How can I optimize this? Now that you've spent the time and effort creating it, it's far easier to optimize something that you've already built than to go back and start with a blank page and create something over from scratch. So that is the second profitability trap that will really keep you playing small, earning low and constantly in that hard hustle, that heavy drive, because you're in first gear all the time and not allowing yourself to get into second third gear because you're swapping and changing and chasing something else new. The third thing that is a big profitability trap is actually throwing money at a problem. So what I see when I'm talking about this, it's like where you decide, well, I want to do ads, but I don't have time to learn ads. So I'm just going to throw money at an ads manager and expect them to solve the problem and then it may not be working. You just throw more money at it.
Jessica Osborn [00:08:35]:
Now I'm not saying that you need to become an expert at everything. And absolutely in trying to do that, you will use a lot of your own time, energy and resource, which will also be keeping your profits low. However, it's very, very dangerous to just outsource something knowing nothing about what it is that you're outsourcing. So there is a very fine balance where you're going to get the best out of outsourcing. And I 100% agree with outsourcing stuff. Getting the things that are not your expertise off your plate. You want to outsource. Yes, that is a very good thing to do and that will actually help you to grow your profit when you're doing it right.
Jessica Osborn [00:09:17]:
What is very dangerous is where you're outsourcing something and you're just doing it blind. Like you have no idea what success looks like. You have no idea what you're really asking that person to do. And I will. I've seen this again and again and again clients come to me, they say, well, I tried ads and it didn't work like ads do work. But either you just weren't doing it right. So they'll go, but I hired an ads manager. I'm like, okay, and what was your brief to them? What did you tell them about what it is that you needed? What was your strategy? Can't just expect someone else to pick up and know your business better than you and to know the strategy and what it is that you, you're trying to do.
Jessica Osborn [00:09:57]:
You need to be the person in the driver's seat and in control. And yes, outsource the stuff. That's the heavy lifting outsource so that you can get it off your plate. So you can be spending the time doing the revenue producing activities. But you do need to know what success looks like, how to brief those people properly, how to actually integrate it and manage it in your business. Otherwise you are literally just throwing away your profit. You are throwing it at someone else, probably making them fairly profitable. But they will be frustrated as well because they probably know that they could be far more successful.
Jessica Osborn [00:10:35]:
It's just that there's going to be a lack of understanding and engagement and proper process in doing it. Now some people will tell you that's okay, they bring all of that strategic knowledge. You have to remember it's not their business, it's your business. And you need to have a certain amount of knowledge for them to be able to work with you properly. The amount of agency owners, experts, you know, like website designers, copywriters who say that someone tries to hire them and they don't even have their business strategy in place. They don't know what they're selling, they don't have a target market. They say, I'm marketing to everyone and then expect them to produce good results. And they're like, well, I've got to try to help them to build their whole strategy before they can even do the job that they've been hired to do.
Jessica Osborn [00:11:25]:
And that's not their expertise. They're not the experts in helping someone with their market positioning or with their offer. They want to build you the great website, they want to write you good copy. You need to be bringing that stuff, you need to be providing it with them. And I have many of them who say to me, I need to send my clients to you first so they can come through business jam, get the strategy in place. And then it's like they'd be the dream client, you know, for a website designer, for a copywriter, for an ads manager. Then you become the dream client because you've got your ducks in a row and you know what you're asking of them and you have the metrics and the way to measure the success. You know what it.
Jessica Osborn [00:12:05]:
What does success look like? You know what it looks like. You're very clear on it, right? So don't throw money at a problem and just think, I'll just hire someone and that will make that go away or that'll make it successful. Actually, it's your business and unfortunately for you, but also fortunately, because it's the way that you become successful, you own it, right? So you have to understand it to the degree that you can outsource it and that you can be a good leader of those outsourced people. So the other, the four, number four is almost like the opposite of that, is like not hiring out at all. So as I mentioned before, if you're trying to actually just learn it and then do it all yourself, you're going to be spending all your time working in your business and not on your business and not actually doing the stuff that brings in the revenue which is serving your clients. That's what you want to be spending the majority of your time doing. If you're the expert and it's your expertise that you're selling, then the majority of your time, when your business machine is built and it's operating is on the revenue generating activities which is serving your clients and probably a bit of the sales, right, in the building mode, when you're still building the machine and you know, maybe you've got an existing business, but you're trying to go from ad hoc one to one or freelance type of work to actually having, you know, a program and having a sales system in place. Yes, you're going to spend a little period of time where more of your time is spent behind the scenes in the development, you know, actually creating that, that machine, creating that system.
Jessica Osborn [00:13:48]:
That's normal, but it's not normal for it to continue. Right? So once it's built, then you're out and you should be in the profit generating phase where you're working on the revenue generating activities. In order to do that, you do hire the support, right? You hire the right people to come in to take the time consuming, repetitive systemized process task off your plate. And there are definitely ways that you can do this really, really effectively and ways that people absolutely fail at the hir. Usually when, you know, I'm just going to say there's. There's one key difference between people who do it successfully and people who fail at the outsourcing. The way that you fail is basically, you know, all the tasks and you're giving tasks out one by one and your outsourced VA's or staff that are in your business are waiting for you to tell them what to do. That is how you become the bottleneck in your business.
Jessica Osborn [00:14:52]:
So forget it. You need to have a completely different approach where you're hiring someone for a role. The role has a specification of what it is and what it's responsible for. It has again, what does success look like for that role and that you actually have a process that you're handing over for that person to manage themselves. They should be in charge of what it is that they're doing and have a process that you have developed. So you're like, I know how this is meant to work. Here is the process that I want happening. You hand it over and they do it.
Jessica Osborn [00:15:28]:
That's how you take it off your plate, right? Not by giving them tasks every day like, can you now do this? Can you now do this? I need you to send this email. I need you to do that. If you're telling me like, whoa, I could not do that for more than a couple of days without my brain exploding, that would be so inefficient and ineffective and also frustrating for them and for you because they're just sitting there waiting for the next task to drop in and not having something to do, like let them take ownership of the role and give them the accountability for it. So I'm not going to turn this into a, into a management or leadership episode, but that just gives you a real taste. Yes, you definitely need to hire in order to be profitable. And it's definitely about the way that you do it that makes a difference. Now the fifth profitability trap. Keeping your business under earning is actually investing in far too much technology than what your business actually needs.
Jessica Osborn [00:16:26]:
Technology is wonderful, it absolutely helps and it is, I would say, essential to having an efficient business. But you can make some choices that create way too much complexity, too many different systems that need to talk to each other, that make it complex in the background and it costs a lot. Right. So how much of your earnings are actually paying for your technology where you can simplify, bring them in, into one system, it's so much better, you know, and I made some choices years ago where I had a whole lot of separate systems. I was paying for each of them separately to find an all in one that actually suited my business, that had the things that I needed and had some stuff that I thought I was going to need, as in when I looked ahead, what I wanted to do in the future, is this going to support me in my plan and my vision for where I'm growing my business to? The answer is yes, that made it the right fit for me. And there are lots of different options out there. There's been many that have come onto the market that are in that, I'm not going to call it an all in one space, but they kind of are like they, they're trying to serve you so that you've got one main platform and maybe a little bit here and there on the side. The more you can have in the one place, the far lighter, easier and more efficient really your business is going to run.
Jessica Osborn [00:17:56]:
You get into so much trouble when you have multiple different tech platforms and you know, things like plugins and all of these separate things, all developed by different people needing to talk to each other, that is creating tech chaos. And you don't want to be spending your time troubleshooting, putting out fires and finding, oh my God, my website's down because there's some plugin conflict or, you know, anything like that. They're just headaches you don't even need to be having. And they're totally avoidable if you choose the right tech. I actually have on my website a Page where I've listed my favorite tech tools that I either use in my business or ones that I've tried because, you know, some of them will suit other businesses. So I've given a little summary of, you know, what I think this one's good for and who it's best, what type of business, why I recommend it so that you might actually find some solutions in there for you. You can hop over to my website and check it out. Um, I'll put the link in the show notes now.
Jessica Osborn [00:18:59]:
That was number five. So we're up to the last one, the last profitability trap that is keeping your business under earning. Um, this one probably is no great surprise, but a surprisingly high amount of people are doing it. So it is undercharging for your services. And you're like, yeah, oh my God. Okay, well, I've already, you know, some of the people have now just dropped off this podcast episode because they're like, that's too obvious and simple. Yeah, it's obvious. And are you doing it? Can you sit there and tell me with your hand on your heart that you are charging an appropriate amount for your services, or are you charging the amount that you think is what people want to pay? But inside you have this little twist of resentment, this, like, knowing in the pit of your stomach that it's actually worth far, far more and it's just your inability to market it.
Jessica Osborn [00:19:58]:
Or maybe you haven't even tried at that higher rate and you're absolutely afraid of changing the price because you think changing the price will mean losing clients. Well, if that's you, then I recommend going back and listening to the last episode I did that was about how you find quality clients. Because there are clients at every price point. There are some who will tell you that a five dollar product is too expensive, and there are others that will happily fork out $15,000. Okay, obviously not for the same thing, but there are people who are at every single price point. So it's not that your market won't pay more, it's just that you've not. You actually haven't even started speaking to those people yet. The people who you're speaking to now are probably people who are at a certain price point and level and what you're offering is suiting them.
Jessica Osborn [00:20:52]:
But if you know that you're undercharging and you should be, there's that little niggly should in the back of your mind could be or can charge more, and maybe you just doubt whether you can. I'm here to say that you absolutely can. The problem is that you've just not been speaking to those people yet. Right. So there's a whole part of the market that you have not yet tapped into. You haven't yet discovered who are people who have the funds to invest and absolutely will are just waiting for that higher quality offering and maybe even for you to step up and show that you believe in your worth and that it is absolutely worth it. I don't know how many times my clients have told me, you know, wow, this is worth thousands more than what you charge for it. Yeah.
Jessica Osborn [00:21:44]:
And I love hearing that because I think, well, they are super happy, they got really great value. But I also have to be happy with the price that I'm charging and what I'm earning for it. And if there's any resentment there, I'm now very aware of it. And I know straight away, well, if there's resentment, then I'll actually be turning away sales as well as keeping my business less profitable. So if there is flex and scope and room to make my price higher and more, you know, maybe a little bit closer to the true value of what it is that I offer, then, you know, there is absolutely nothing stopping you from changing your pricing. Maybe you want a bit of support with that. Maybe it's like, well, how do I know what the right price is? Yes, there are frameworks for that, there's strategies, and there are definitely a process that I go through in order to find what the best price is for my stuff. You know, when you're pricing information, type of services, you know, coaching, that type of thing, it's very different from pricing a, you know, a hammer or a nail or a physical product that has actual cost of the materials that are used.
Jessica Osborn [00:22:57]:
Right. When it is your knowledge and your expertise and, and your time, there is an absolute sliding scale. And really it's up to you. You'll probably find someone in your niche who's charging at least double what you do for the same or maybe even less than what you're offering. And there are people buying it. So, you know, when you look out there and see that person, it's like, well, it's not because there aren't people who buy, it's because you're not putting the price on it that you actually want. And that is absolutely an opportunity that you have right now, today to increase the profit in your business. So I hope you found this really valuable.
Jessica Osborn [00:23:41]:
Please hit a subscribe button. I'd love you to drop a review if you've just got a moment, a little minute of time. And you would like to help other people find this podcast because maybe you've been enjoying the episodes and really tuning in and loving the nuggets of gold that my guests are sharing. And hopefully you've been loving my episodes as well. Then please hit the five stars on your podcast listening app and write a few words. It doesn't have to be many. Even just one sentence helps other people to find the podcast. So I would highly appreciate that from you and really thank you in advance.
Jessica Osborn [00:24:23]:
So much gratitude for you for being here and tuning in today. And I'll be seeing you next time here on she's the Business Podcast.
