Increase Your Business Profits Now!
by Jeffrey P. Fisher
Almost every single day, I try to uncover better ways to make more money from my artistic pursuits. Here are the most effective ways that I've discovered to put more cash in your pocket.
Work your strengths.
Concentrate on the projects that bring in the most money and let the rest go. If you are making decent cash doing certain things while wasting too much time on pet projects that bring in peanuts, it is probably time to reevaluate your priorities. Swallow hard and commit to pursuing only the real moneymakers, not the pipe dreams.
Raise your rates.
When was the last time you increased your fees? Just as every employee has an annual salary review, you should step back and look at what you're charging, too. At one point I went 26 months without a fee increase. What was I thinking? Now I push up the rates at least 5% every year.
Knowing the going rate for the services you provide helps, too. Ask around. What are your peers and competition charging for similar work. You'll find rates all over the map. If you're young and green, charge about 80% of the average rate you discover. However, should you posses impressive credentials, charge on the higher end, 120% or more of the average.
The best gauge of the right rate is to keep pushing it higher until clients start to complain. When that happens, back off a little and you've found the highest rate your market will bear. Notice I said clients complain, plural. One complaint from a notoriously cheap patron should be ignored. Only when protests come en masse should you yield.
Cut your expenses.
It's a simple formula that everybody in business recognizes: Income - Expenses = Profit. To make more money you must look at both increasing your income and minimizing your expenses. Keep these fundamental concepts in mind.
The easiest way to increase your income is to put a larger gap between what you earn and what you spend. Set aside 5% of what you make as your rainy day gear and other materials splurging fund. Objectively evaluate your needs, industry trends that affect your business mix, any specific demands by clients, and, most of all, the profitability of any new equipment acquisition. Will you make back its cost through increased billings?
Also, look for ways to reduce your fixed business expenses and keep careful watch over other expenditures. Rent, utilities, telephone, and Internet charges can easily get out of hand. Thankfully, they are easy to reduce, too. If you're unsure of where your money goes, record your spending habits for a few weeks and find ways to cut the chaff. Don't limit this technique to business expenses either. You can target and cut many frivolous personal expenses at the same time, thereby increasing your take home pay, too.
Be good to your anchor clients. Don't neglect the 20% of your established client base that provides 80% of your revenue. Treat them well and they'll reward you with their continued patronage and loyalty. I find that simply picking up the phone and either inquiring about new projects or pitching my own ideas invariably results in an assignment. Sharing case studies of other successes is another way to encourage your best spenders. Introducing a new product, service, or piece of gear? Make sure they know about it first! Also, offer discounts or other incentives just to your best clients. Anchor clients are also good sources for referrals to other prospects who may need your music and sound services. Don't be shy asking for their help finding new business.
Find better clients.
Stop wasting your time on nickel and dime gigs. It's worth the extra effort to find those clients with bigger budgets. Find these deep pockets and pitch your most persuasive argument so they hire you. A few projects from better clients can keep you busy for weeks and paid handsomely.
Launch some new promotions.
If you don't have any work lined up, please don't wait for the phone to ring. It's time to get up, get out, and get going to win new business. Promotion is the secret to making sure you always have a steady flow of new business at your project studio. The minute you stop promoting is the minute your sales plunge and it all goes away. Promote regularly to both past clients and new prospects. Put 60% of your time, money, and energy toward promoting to your current clients and the other 40% toward getting new prospects. Keep your name in front of these people and make sure they choose you first when they need help.
Unless you have an impeccable reputation, don't expect people to contact you. You need to initiate proper promotions that bring a steady stream of new business to your room. Call past clients and see if they have any new projects coming up. Make some cold calls to possible prospects, too. Write a news release about your latest accomplishments and send it to the media including blogs that reaches your target market. Put together a simple postcard about your services and send it to your contact list. Have a sale and offer a discount of some kind. Look for networking opportunities, too. Go where the work is. Hang out with the people who need the products and services you offer.
Keep your name, and the benefits you offer, in front of buyers regularly. It's the essential way to secure your success, now and for the future.
Resurrect old leads.
Did somebody inquire about your services but never buy? Time to check in with them again. People move around a lot. Your contact at one company may have left their job, and the person filling their position may never have heard of you. Simply reconnecting with lost leads can generate lucrative assignments. Also, don't lose track of those job jumpers either. They may have moved on to better horizons, and they still may remember how you helped them along the way.
Products can sometimes be 50% of your revenues. If you limit yourself to only selling services, you severally cut your income potential in half. Now is the perfect time to add products to your overall business mix. Choose only those products that complement what you sell. As a composer, I sell a buy-out music library product to supplement my income earned from soundtrack and jingle gigs. One studio owner worked out a commission deal with a local music store to sell some of the gear available in the room. Many musicians finished their sessions at his studio only to leave with a new toy and a lighter wallet.
Develop additional services.
Are clients or industry trends hinting at new services you should be offering? Listen to what people tell you. Follow the industry closely. And then act accordingly. Finding a distinct need and filling it is a sure way to keep cash flowing in.
If you work alone, there's only so much time to accomplish what needs doing. Consequently, there's only so much money you can make. If you hire other people or firms to handle ancillary services, you can get more done in the same time. You'll bill out higher invoices, too. You don't have to hire employees to make this work. You can hire independent contractors and other businesses to pick up your slack.
Have a fallback.
What if your primary source of income dries up? Do you have another way to generate income in your life? Can you do something else? Capitalize on some other skill until you get things back on track.
Follow these strategies and in no time at all you'll see a significant increase in the money you make from your endeavors.