Create a Business That Breathes
So this is value pricing and this is modeled for creatives and entrepreneurs with Tara Gentile. If you weren't with us yesterday, I'll just run through very quickly a little bit about Tara. She's back with us at CreativeLive. She was with us earlier in November for a really exciting course where we actually did an interactive craft fair, which is really special. So, we're so happy that she's come back. She's business strategist, she's the creator of The Customer Perspective Process and she's indeed an ambassador for the You Economy. She's had her work featured in Forbes, on U.S. News & World Report, Design*Sponge, and she's featured on the New York Times Bestselling Book List with her book, "The $100 Startup". So thrilled to welcome back to CreativeLive, Tara Gentile. (applause)
Tara, welcome back.
Happy Valentine's Day to you.
Now, I have a very favorite instructor and I'm hoping Tara Gentile, will you accept my rose?
I will accept your rose. Than...
Thank you for being with us and thank you, oh I need to give that to you.
Absolutely, thank you.
Yesterday was wonderful.
I so enjoyed it. The chat rooms are so engaged, the audience was so engaged. I know our students got a lot out of it as well, so we're just really excited to get going.
I'm gonna get out of your way.
Happy Valentine's Day!
Happy Valentine's day to you as well.
And to all of you watching. I inadvertently wore a Valentine's Day color today, so wahoo! (laughs) And I just wanted to say too I've been featured in "The $100 Startup", it's actually Chris Guillebeau's book and he is amazing and you should definitely check that book out. So, I just wanted to not take credit for that because (laughs) it's not my book, but it is awesome. So, today we're gonna talk about a business that breathes. Yesterday, we talked all about pricing, all the things you need to consider about pricing. We're just gonna talk a little bit more about that as the next two days go on. Actually, we're gonna talk a lot more about that as the next two days go on. Who am I kidding? (laughs) But before we get back into pricing, there's a whole lot of other stuff that we need to consider to make sure that we're building businesses that breathe. Businesses that give us life. Businesses that give us freedom. Businesses that help us hit the goals that we have set for ourselves. So, I want to take you back for a minute to the problem that I described yesterday, which is the micro-business earning plateau. If you are not there yet, it's coming. I'm sorry to say. But I know a lot of us are there right now and the whole point of yesterday and the next two days is to get you from wandering, get you out of that plateau as quickly as possible. You're gonna get stuck there for a little bit, you're gonna feel that kind of (groans) that goes on while you're in it, but you don't have to be there forever. You don't have to get burnt out, you don't have to get stressed out, you can adjust, you can make change, you can shift the foundations of your business so you can reach your goals. So what the heck am I talking about? Well first, when you are first starting out off in business, you are excited. You are on fire. You've got something that you want to share with the world, you've got an offer, you've got a product, you've got a book, you've got a service, you've got a skill that you want to bring to other people to help them change their lives, to do things more easily, to make things more convenient, to solve their problems and help them achieve their desires. And so you put this thing in as many people's hands as possible and even if that's just one or two or three people at a time, those wins come fast and furious at the beginning and they feed, they fuel our excitement. And so our revenue shoots up pretty quickly even if that revenue relatively speaking looks pretty low. It's still (imitates a rocket) right from the beginning. So things are going great, you're excited, you have so much, you feel so much potential for this business that you're developing. Maybe in here is when you quit the day job or you make big life changes that reflect this growing business that you have. And then, things start to flatten out. We hit the flat line. That's the micro-business plateau. And while you're in that flat line, you're starting to burn out, you're starting to lose steam. You're still putting so much hustle into your business, but the winds come much more slowly or they feel like they're coming more slowly. It's not necessarily that you're less successful or that things are even going poorly, it's that you're just not shooting up as fast as you were before. And more specifically, you're not shooting up to that revenue goal that you set. I know all of us here and everyone on the chat rooms has a revenue goal that's way up here. But how do you go from the plateau to the mountaintop? How do you get from one, from that place of burning out, er burning out and losing steam up to that place where you can say, "Yes, I've met my goal. This is where I want to be." What is that? What's involved with that? So yesterday I mentioned there's three things involved. You need to have prices that serve your customers. You need to price your work so that it tells a story. You need to price your work so that it inspires you. You need to price your work so that you're attracting the kind of customers that allow you to grow your business, to create the big things that you want to create that fuel your own freedom, whether it's taking off time for your business or maybe outsourcing some production or making get some help with administrative tasks. So you need prices that serve your customers and of course, you need prices that serve you as well. You also need products and services that address your customer's needs. Not one time, but many times, right. You need to understand how your customers are growing and changing. You need to be able to anticipate their needs and give them the things that they want to buy from you. You also need marketing and sales strategies that give you freedom, that build freedom into your business. It's not just about automation, but it's really about creating a system for marketing and sales that you can walk away from, that really just takes a touch of energy to start a whole avalanche effect of results. So that's how we climb up to that mountaintop of our revenue goal. Prices that serve our customers. Products and services that meet our customer's needs. And marketing and sales strategies that are built to free us from our businesses. Let's talk about, quick, what value pricing has to do with business models. Why did we start with pricing, yesterday? Why did we talk all about how price tells a story and about how we can position ourselves in our markets and how we've made intentional choices about our prices or not made intentional choices about our prices? Value pricing is one, all about thinking from your customer's perspective. It's about identifying what your product or service really means to your customers? It's allowing you to think in creative ways about what you can do to change their lives, little bit by little bit or big bit by big bit. So when you think about pricing from that perspective, when the focus is on value, you start to be able to see how that value can affect every other part of your business. It affects the products you develop, it affects the customers you target, it affects the sales and marketing strategies that you use, it affects the price, it affects everything. Well that everything, that's your business model. That's your business model. Remember yesterday, we talked about the fact that there are a lot of choices to make. So often, and this is especially true in the micro-business earning plateau, so often, we end up feeling backed into a corner. We feel like the choices are not our own. We feel like well we have to do that or we have to do this. We have to promote ourselves this way or we have to go to this networking event or we have to cold call or we have to, you know (groans) so many have-to's. Those have-to's are an illusion. Those have-to's are an illusion. When we build a business model that really breathes, we have the power to make choices that support us. We have the power to take all those have-to's and say, no what's really going here, what's my a choice, what's my b choice. And maybe we have a c choice and maybe a d choice. The fact is we are in control of all of the different parts of our business, but until you sit down and identify what those parts are. Until you sit down and identify how that's affecting your sales or how this is affecting your lead generation, you can't make those choices. So today, we're gonna identify even more choices than we identified yesterday and I'm going to empower you to make those choices for your business. I'm gonna help guide you to what is best for you, not what's best for me, not what's best for Robin, not what's best for Brianna, but what's best for you. Unless you are Robin or Brianna and then, (audience laughs) you count. Alright. (laughs) So, we've got a lot of choices to make today and tomorrow. I'm gonna help you make those choices. So tell me if this sounds familiar and seriously tell me. Chat room people, get on there and tell me if this sounds familiar. You say, "People are interested in my work but I just can't make the business side work." You know, this is what, I hear this all the time. People love what I'm doing. I write a blog post and they love it. I post on Facebook and they love it. But do they buy? No. Or you just can't, you can't seem to get traction. You get that one buy and then you can't move forward. You get that next buy and then it's still isn't working. So I hear this all the time. You guys all do good work. I know you guys all do good work too. But does the business side of things work? Maybe not. So your solution to this is you create new products after new product just to make more money. I was totally in this cycle myself. A few years ago, I would make product after product after product just to be able to go from launch to launch to launch, just to be able to put the money in the bank that I wanted to put in the bank. Because I thought more offers equal more money, more products equal more money. How many times have you heard, multiple revenue streams? And yes, you need multiple revenue streams, but you don't just need multiples for the heck of it. They need to be well thought out. We'll get to that. So you think more money, or more offers equals more money, which leaves you feeling overwhelmed and scattered. I was always feeling scattered and always reacting never leading. When you're in that cycle of always making more, creating more, just trying to put the new thing out, all you're doing is reacting to what you see in front of you. You don't have the time to back up and say, "Where am I going? Where do I want to lead my business? Where am I taking the business? Where am I leading my customers? Where am I leading my clients?" So that's one thought pattern. Another is and I hear this all the time as well. "Getting more traffic to my website would solve all my problems." "Getting more traffic to my website would solve all my problems." "Tara, how do I get more traffic to my website?" "Tara, how can I get more subscribers to my blog?" "Tara, how can I get more Facebook likes?" Oh, I'm just all tongue tied about this. So yes traffic. More people, more eyeballs, we all want more eyeballs, right. So you blog and you update and you tweet your little heart out and you're constantly looking for more ways to get traffic. That's why all those "10 More Ways to Get More Traffic to your Website" posts are so popular. If you want to write a popular blog post, that's what you want to write. But here's the thing, it's because you think more people equals more sales. More people equals more sales. But it's not true. It's not true. It's not true. More people is expensive. It's exhausting. And it's not solving the fundamental problems in your business. It's not solving the fundamental problems in your business. Maybe your offers aren't resonating, maybe your offers aren't built to work together, maybe your customers, the multitudes they may be, or your prospects, the multitudes they may be, don't see what the problem is that you can really help them solve. They don't see that desire that they know that they have, they don't see that you can help them get there because things just don't make sense. It's not breathing, it's not vital. And this all leaves you feeling excited about new opportunities only to be frustrated when your efforts don't pay off. I mean, how many of us have been super excited because we landed that great guest post or we landed that great interview or we landed that great media opportunity. My partner and friend, Brigitte Lyons, is a PR strategist and we worked together on my coaching program. And she will not take a client who thinks that media will solve all their problems. She will only take clients who have a system in place to capitalize on these opportunities. What's that system? How do you build that? Well that's what we're doing for the next two days, alright. So really I'm just setting you up to work with Brigitte. No, not really. (laughs) Alright, so all that excitement that we build up for these great things that we've accomplished or that we're trying to accomplish can leave us feeling really, really frustrated when they don't pan out and so we're wandering that micro-business plateau and we're feeling frustrated. We're feeling burnt out and we're feeling a little lost. Speaking of feeling lost, another thing I hear is that "I don't understand why my business isn't working now, it's always worked before." "I don't understand why my business isn't working now, it's always worked before." So you hustle, you push. And then you give up. I get so sad when I hear about people giving up. I feel so sad and I see it at least a weekly basis. I see someone who has worked so hard who is so close and they give up. Maybe that's you right now, maybe you are so close to giving up. The next two days I'm gonna teach you what you need to do to get from that place of wanting to give up to knowing you can make this happen. So you give because you think there's something wrong with you or there's something wrong with the business or there's something wrong with your customers. And that leaves you feeling lost. I don't want anyone to feel lost. I want you to feel like you are on the path to the success that you crave. Yesterday, I asked you how much do you need to earn to live the way you want to live. I want you to feel like this business model that we are about to create is putting you on the path to living the life you want to live. So keep that goal in mind as we go through the next two days. What's the life you want to live? And how do you create a system that's supports that? So this little guy is gonna be with us for the next few days. This is my little business model guy. (laughs) He's a thinker. And he's also a little guy, which is fitting because the analogy that we're using here is that a business model is, or your business needs to be a healthy, living, breathing organism. If you can imagine all the different systems in your body, your circulatory system, your nerve system, your digestive system, all those systems work together. They make things happen for you. They make it so you can stand on stage for three days and not pass out. They make it so you can run that marathon you ran and not pass out. They make it so you can sit at your desk all day and not pass out. (laughs) Hopefully, no one's passing out. But so all those different systems work together, we take it for granted, but our bodies are these finely tuned machines and a lot of us do things to make them even more finely tuned. We watch our diets, maybe we go gluten free, or maybe we drink green juice in the morning or maybe we exercise, maybe we do Zumba. (laughs) And so we do all these things to keep our bodies working better, but really the hard work is being done by our bodies, we just tweak things here and there. We tweak things, we add a little energy when is necessary. We get another hour of sleep or we start the day with a coffee or we drink that green juice. It's that small tweak that helps our bodies support us to do what we want them to do. Your business model is the same way. Once you put the systems together, once all the layers are working the way they're supposed to work, all you need to do is tweak it, or add a little energy here. Give it a little push there. So your business model and your body can both be healthy and vigorous and vital and help you do what you want to do. Help you live the life you want to live. Alright, so I have talked a lot about business models from the analogy perspective. Let's talk about what a business model actually is. Your business model is the way your whole business works together to create, deliver, and exchange value. Your business model is what represents how your business creates, delivers, and exchanges value. And there's a place to take notes on this in your workbook. Let me explain this a little more. What is the value that you're creating? The value you're creating is not the product or service itself. The value you're creating is the change your customer sees, it's what they learn how to do, it's what they accomplish, it's a change in how they feel, it's a change in how they look maybe. That's the value. Value is what your customer perceives. It's why they made a purchase to begin with, right. We don't buy a widget to just to have a widget. We buy a widget because of what it allows us to do. What it allows you to do, that's the value you create. And it's important to start from there. I'm gonna get into that more this afternoon, but it's really important to start from there. What is it that I'm helping my customer accomplish? What is it that I'm helping them do or change or feel? What's their before and their after? That's the value you're creating. Now the delivering part, this is how you get that value to your customers, so that's your product, that's your service. It's also your marketing channels and your sales strategies. It's the way you communicate and relate to your customer. That's the delivering part, the delivering part's big. The creating part is a big idea, the delivering part takes a lot of time and energy, and the exchange part, well that's fun. Exchanging value is the sale, that's the transaction. So when you are delivering value to someone, they're delivering value back to you in the form of money, normally. Now of course there's also exchange of value that's say email address or contact information or even a like on your Facebook page. That's an exchange of value as well. You get something you want and they get something they want. Small aside here, I love the idea of what a transaction really is and when value is really, really created. I attended a lecture a couple years ago at my alma mater and I, so sorry that I'm blanking on what's the lecturer's name was, but this was the first time I've ever considered what is really happening in a transaction. And he explained that value is actually created when a transaction takes place because I have what I have, which is for me, for my business, what I have is an ability to help you make your business better and you have money. And both of those things are things that we're okay parting with. I'm okay parting with my advice, she's okay parting with her money, and so when we make a switch, when I have the money and she has the business advice, we're actually both richer. We both have more because now we have that thing we didn't have before. She doesn't care as much about the money as she cares about the business advice and I don't care so much about the time that it takes for me to give her the business advice as I do about the money. So at a very fundamental level, that's when value is created because now there's just fundamentally more. Everyone in the transaction is richer, which I love thinking about transactions that way. So often we think that when someone buys something from us, they're mourning that loss of cash and they're not. People don't mourn the loss of cash when they buy something that they really want, that's going to really help them do what they want to do. When they really are getting value out of that, they're not mourning the loss of that money, they are celebrating the fact that they've got that value now. Okay, enough about that. Alright, first I have to give a shout out to the book, "Business Model Generation". This is sort of the bible of understanding business models. It came out, I want to say like five years ago. It's both, as I understand it, it's both the dissertation of Alexander Osterwalder who is the lead author on this and it was crowdsourced by hundreds of business owners and business strategists all over the world. So this information is not just one guy's imagining, it's not just one guy's analysis, it's the result of experiences in all different kinds of businesses, which is why this system works so well for all different kinds of businesses. Now that said, what I've done is I've taken the concepts from this book and I've adjusted them to make just a little bit more sense to the average micro-business owner. The average service provider, the average maker, people who are building businesses where they can really relate to their customers, where the relationship is that much more palpable. You know this book is used by Fortune 500 companies, by Fortune 50 companies. This system is pervasive throughout business strategy from the biggest businesses to the smallest. And so you know, it's gonna be, it can use some adjusting. So my job is to adjust it a little bit for you, make it a little bit easier to digest, make it make a little bit more sense with your unique kind of business. But if you want to go back to the source, I highly recommend checking out this book. There's also a great iPad app for it, as well. So, here we go. This used to have a question mark here, right. But instead now, I've got my little business model guy because this is the bump up. Here you probably have no model. Here you've got that skill, you've got that product, that one thing that you can't wait to get in the hands of other people. You're not thinking about it a lot more other than that. All you know is what you've got, you want to get in the hands of other people. That's why the winds come so fast and furious here, but that only goes so far, it only ever goes so far. Here is when you're still trying to make it work and it's just not working anymore. That's when it's time to look at the fundamentals of your business. What is the system that I have for creating value, for delivering value, and exchanging value? When you start to create those systems in your business, you incorporate our little friend here and you bump up and you can reach that revenue goal, whatever it is that you have set. And you want to create your rev or your, yeah, you want create your business model with that revenue goal in mind.