Promote Less and Charge More
One of the easiest ways of making your business more profitable is to stop offering lots of choice and put your prices up.
Offer “affordable” and “low-cost” solutions to your clients and it is easy to get caught in the trap of constant promotions. You can see this happening on the High Street at the moment. Big retailers are offering pre-christmas sales and slashing their prices. But the low margins mean that they have to get large numbers of customers through their doors to hit their sales targets.
When you run your own business, this is a strategy that rarely works. It’s hard to attract the high numbers of clients you need to make the profits you want.
Here is a simple example using workshops to show you what I mean.
Half-day workshop tickets sell at £45
Delegate rate & room hire cost you £10 per person
Gross Profit per person £35
To make a total gross profit (and remember you still need to take in to account all the cost of promoting the event, work book printing, admin support, etc) of £500, you need a minimum of 15 tickets sold.
Full-day workshop tickets sell at £195
Delegate rate & room hire cost you £40 per person
Gross Profit per person £155
To make the same £500 gross profit, you only need to sell 4 tickets. If you sold 15 tickets, you would make a gross profit of £2325.
You would have to run at least 4 half day workshops to make the same gross profit as running one full day workshop.
Which workshop programme do you think will take less of your time to make £2,000?
(Please note, these calculations are highly simplified. Do make sure you work out your net profit carefully when running events and don’t get caught out by focusing on your gross profit per person!)
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