It's one of the hardest business lessons I've ever learned ...Apr 28, 2022
It's one of the hardest business lessons I've ever learned ...
- 𝗕𝘂𝘁 𝗯𝗲𝗳𝗼𝗿𝗲 𝗜 𝗰𝗼𝘂𝗹𝗱 𝗹𝗲𝗮𝗿𝗻 𝗶𝘁
- 𝗜 𝗵𝗮𝗱 𝘁𝗼 𝗮𝗱𝗺𝗶𝘁 𝘁𝗵𝗶𝘀 ...
- My business model had a huge flaw.
- My tough-love mentor pointed it out.
- I was greatly offended by his words.
He said my Very Best thinking was producing my lousy results.
(In other words, I wasn't very smart.)
My pride fought against admitting it. It humbled me.
I was in my early 30's leading a fast-growing technology training company. I had a fortune 500 clientele and a great team.
My wife became pregnant and we decided she would leave her great paying job to stay home.
But that cut our income in half. I couldn't figure out how I could pay myself more to cover the loss of her income.
My business budget was too tight.
So I met with my mentor, a very wealthy corporate trail attorney. He didn't mince words.
As it turns out, I had landed most of my clientele by charging less than my competition. My margins were horribly thin.
The solution was to raise my prices and risk losing our best customers.
>> I had to admit my VERY BEST thinking had created this mess. I had a lousy business model.
So ... I decided to change my model, raise my prices, and risk losing my best customers. The decision could kill our business.
In the end, none of our customers left us. They couldn't understand why we discounted to start with. They actually loved us.
The increase in our profitability made the difference in my personal income, and as we scaled, into the lives of our entire team.
This lesson paid off greatly for me. What I learned about business models later produced multiple INC 500 businesses.
It's one of the greatest business lessons I've ever learned — the hard way.
If your results aren't were they should be — check your thinking, check your model. Forget your pride.