12 Principles of A Wildly Profitable Business

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• List - 12 principles of a wildly profitable business (part 1)

(in a 5 minute read)

I’ve recently joined a business community. It’s for entrepreneurs who have established businesses but are looking to expand their reach and scale.

Something discussed recently was the idea of developing an ‘oversubscribed’ business.

Where you don’t chase customers but customers chase you.

There were 12 principles shared that I’m confident will transform your existing business or help you create one that hits the ground running.

This is part 1 where I’ll share with you the first 6 principles.

Here’s the 6 principles below ↓

1. Only the oversubscribed are profitable

Only businesses that have more demand than supply make significant profits.

This principle is foundational in economics, emphasising that profit margins are not determined by how hard a business works or its customer service but by the balance of supply and demand.

It’s why an airline with huge supply (always available flights) and medium demand (does not sell out every flight) makes small profit margins.

And Rolex which has small supply (limited availability) and HUGE demand (18 month waiting list) has big profit margins.

Pro tip: Offer a finite amount of your product/service

2. Focus on YOUR people

Your market is not everyone; it's the people who know, like, and trust you.

Building a connection with your audience is crucial.

Data shows that it requires at least 7 hours of engagement, 11 interactions, and exposure across four different contexts (mediums) before potential customers truly engage with your brand.

Every person that you build the 7, 11, 4 with, is part of your market.

It’s part of the reason I started this newsletter. To add value and build connection and trust with future customers.

Evidenced by the subscribers that have become clients.

Pro tip: Start with the 7 hours of engagement. Content is the easiest way to do this.

3. Market Creation Before Sales

Glastonbury Festival is a great example of this.

They make a market of people who want to attend but can’t buy a ticket.

How?

They make you register for a ticket but don’t let you buy.

And for just an hour in the whole year, they open it up for you to buy a ticket.

And even then the supply is significantly smaller than the demand.

This approach is a "signal collecting campaign" where potential customers express interest before the product or service is available for purchase.

Pro tip: create a waiting list before creating your product or service. Find out if there is genuine demand. Create a buzz and anticipation.

Live Example

Over the past few months I’ve been sharing content and speaking with potential customers of a new product I’m planning on launching.

A business accelerator for working parents who want to launch a side hustle. We teach the ‘how’ then we build the infrastructure of the business for them.

I’ve been collecting signals from lots of people here: https://gibusconsulting.com/launch30

4. Meet customers where they are

Meet customers where they are not where you wish they were.

We wish customers cared about what we cared about, but often they don’t.

You must align your business offerings with the existing desires and needs of your customers, rather than expecting customers to share the business's passions.

Understanding and empathising with customers' current situations is key to effectively selling to them.

What are their problems? frustrations? desires? passions?

Answer this question - What do people want and how does your product/service align to it?

example - fitness trainer who is excited and knowledgeable about diets, training methods etc. But to effectively sell they must understand that their customer (at this stage) is only excited about fitting into an old pair of jeans. They must speak that language.

Pro tip: Sell people what they want and package in what they need aswell.

5. Create conditions for sales

Sales happen when customers are ready, which requires the right mix of logic, emotion, and urgency. Here’s the perfect condition:

Transparency - each customer needs to know that others want to buy.

Logic - they want to buy as it makes sense.

Emotion - they know, like and trust you and feel a sense of desire to buy.

Urgency - there’s a cost associated with not buying right away e.g. May miss out.

Pro tip: think about your offer and adjust it to ensure the above conditions are met.

6. We want what others want

People don’t buy what other people want to sell. They buy what other people want to buy.

If you can show potential customers that other people have bought (testimonials/reviews) or want to buy (waiting list) you’ll attract more customers.

We all look for social cues when buying.

Ultimately we’re sheep not shepherds.

Pro tip: remove as much friction as possible when collecting testimonials or feedback (ease, time etc)

Conclusion

Apply these principles and you should see a shift from having to fight to win business to fighting to curate business.

Next week I’ll share the remaining 6 principles. Be sure to read that!

And share this with someone who would benefit.

Not sure how to implement? Book a free 15 strategy call here: https://api.leadconnectorhq.com/widget/bookings/lonelypivot15

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That’s all from me.

See you next week.