Niching for Profit

7 MIN READ
Posted By Troy Dean on

Welcome to another episode of Silence is Golden where we give away invaluable tips for your business. 

This week, we talk about all things money and how finding your niche can increase profit. We also talk about the power of community and what Troy and Ray learned from attending a recent Masterminds workshop.

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Stuff That Happened

The Power of Community

There have been a few events on lately! Troy and Simon spent some time in San Diego running the Mavericks Mastermind Workshop. Then last week Ray and Troy visited the Gold Coast to attend another mastermind group called the Black Belt run by Taki Moore.

Ray says that he loved being a part of a group where so many like-minded individuals are working to grow their business, leave their legacy and make a difference. It was pretty inspiring!

Troy says that most people think that they want one on one coaching, but group coaching is so much more powerful. The problem with one on one coaching is that it is easy to pull the wool over the coaches eyes and not be completely honest if you haven’t done the homework. However, in front of a group, you don’t want to look foolish!

In our Maverick's Mastermind, we set some pretty ambitious goals and keep each other accountable. We then have to get together in three months time and report on our goals and say whether we have achieved them. This brings about some healthy competition!

What Troy & Ray Learned

One of the things that Troy took away from the Black Belt workshop is that WP Elevation is doing well in terms of revenue, sales and membership but that we need to look at our net profit. So he is going to look at where we are wasting money on things that aren’t moving the needle, where we are spending money and how we can shave some costs.

We also have introduced a new focus to our content. We now have monthly themes which are: Grow, Elevate, Profit and Sprint.  So right now we are talking about all things financial for our profit month.

Going from Freelancing to Building a Team

You may have noticed that all of the WordCamp Europe videos that are being uploaded at the moment. One that Troy found particularly interesting was a talk from Karim Marucci and Sherry Walling. The topic was about growing your business by building a team so that you can start to look at your business's vision and strategy rather than being stuck on the tools so much.

Charging What You're Worth: Lessons from a Vacuum Cleaner

Here is a critical lesson on how to charge for what you're worth so that you can stop feeling like you need to discount your services. Troy says that just because a client can't afford you, doesn't mean that you should feel obligated to discount your services.

Why You Should Never Feel Guilty About Selling WordPress Services

Troy also published a blog on this theme and says that you provide a valuable solution that allows your clients to focus on what they excel at. So don’t feel guilty about charging a premium price for that.

This Pisses Me Off

Around the 12 minute mark, Troy tells us what pisses him off.

At the recent workshops that he has attended, Troy realised that there were a lot of consultants who were blaming clients for scope creep or not producing content on time. However, he says that if a client is doing this, it is actually your fault and then it is time to fix your processes.

Setting expectations is the key and so is creating prototypes in the browser. The client may not know what they want until they see it displayed this way to them. So, get them working in the browser as quickly as possible.

Troy goes on a little tangent here where he talks about how the mobile experience isn’t just about making the website responsive. It is about having a dedicated website with different functionality that is best for the mobile experience. For example, ensuring that the address, phone number and opening hours are a priority on the mobile site because it is more than likely that people may be out and about and quickly need that information.

Let’s Get Unstuck

Around the 18.30 min mark, we help some of our members get unstuck.

Aiden's question:

What percentage of your profit should you re-invest in marketing yourself?

Troy asked this question at the Mastermind to everyone in the group. They all answered that it was around 20% of revenue (not profit) that they spend on marketing. Other schools of thought say that spending about 10% on marketing is ideal. Here at WPE, we spend no more than 15% of our revenue on Facebook ads.

Trish's question:

What do you do with the profit you do accumulate, “Profit First” style?

Troy says that the net profit on your business is what the shareholders take as their return on investment.

Troy says that together with his business partner, they factor in the salaries (including a salary for themselves) and then at the end of financial year, any profit goes to him and his partner as the shareholders of the business. That is their return on investment.

Sakeena's question:

How much should we pay graphic designers for the logos/branding for our client’s sites? What’s a good split where it's still profitable for us? Any recommendations on where to find a graphic designer that fits into that pricing structure? I was quoted a 5% referral fee from a graphic designer I know. I thought that was very low and didn’t see how it could be profitable.

Troy says that you need to first know your numbers and how much it costs you to build a website. You will then know how much to sell that website for in order to make a profit.

As a guideline, 33% of what you sell your website for should be allocated to the fixed costs of running your business (eg.internet, bills and overhead costs). 33% should go towards the direct costs of running that project and 33% is the net profit which should go to you as the shareholder.

Be mindful not to take on clients based on their budget because that isn’t the way to make a profit. 

The Golden Nugget

Niching Down for Profits

Around the 27.30 we dig into the Gold nugget.

Last week we talked about our epic blog post for the month  - A Guide to Building and Sustaining Profitability in Wordpress Consulting

Troy wants to expand on the number one thing that helped him raise his prices as a web agency and as a coach - Niching down.

The thing with niching down is (and to quote Seth Godin, quoting Zig Zigler) “It is better to become a meaningful specific than a wandering generality.”

If you want to be paid more you have to become a specialist at solving a very specific problem for a very specific person.

If you have a specific solution, then that becomes your product (or what we call your “flight path”) and that’s how you take your customers from zero to hero. Once you have that flight path, that becomes your Unique Value Position. You can even create an online course from this. Once you have this unique process, then it becomes difficult for other businesses to compete with you.

Tool of the Week

We have created a worksheet called “Total Clarity of Purpose”. Reflect on your skills and passions (even if you’re not so good at it). You can even add in your passions outside the business as this may be something that you can combine with your work to create your niche.

Think about who stands to benefit the most from you being in your sweet spot? Then you profile that client and then you have your target audience!

This also makes it much clearer for you to then get referrals. #winning

Wrap Up

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See you next week everyone!

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