Hey all, today I want to share some thoughts on “When’s too many products in a business?”
Especially a small to medium sized business.
Let’s say doing between $20,000 per month to $100,000 per month so around $250,000 per year to slightly over $1,000,000 per year in sales.
I’ve had the experience of building multiple businesses past this size and of meeting plenty of entrepreneurs that are running businesses at these sizes.
Something that has continued to come up in meeting with other business owners who are scaling through this size is that some have too many products and services that they’re offering.
And as a result, their revenue, and effectively profits, are split among their selection of products and services as well.
When I look at businesses like this, I understand how they got that way, but I struggle to see how they continue to scale due to the lack of focus on a product or service that is clearly the winner.
Let’s look at an example…
The Galaxy LLC sells the following products and services:
Offer #1: High level marketing coaching for $5,000 per month.
Offer #2: Done for you marketing implementation for $7,500 one time fee
Offer #3: Do it yourself course on their marketing strategies for $397 one time fee
Offer #4: Group coaching that comes with the course for $497 per month
As an owner of Galaxy LLC, how do you focus your time?
Do you spend it selling the high level marketing coaching? Do you focus in on the group coaching? Do you aim to get as many people into the course as possible?
Now, I know some entrepreneurs may say that they would just cater the solution to each person’s problem that comes across their company, but that creates a slippery slope.
What if 12 months into the business, you look at your books and you realize that 80% of the revenue and profits are coming from Offer #2?
Do you scrap the rest and go with Offer #2 as your main offer?
Do you keep running all of them in hope that the others will shine through at some point as well?
Not to mention that running 4 different offers costs different types of money to maintain them and grow them.
In my eyes, the smartest thing to do when you end up having too many products is to really take a serious look at your finances.
Find the offer that is working the best and that is bringing you in the most revenue and profit per month.
Focus your time on that one for an entire 1-3 month period and see what you can do…
Can you turn that one offer into more revenue and profit than trying to offer all four?
If you can, it’s clear that the other three shouldn’t be around.
Likewise, when you’re looking at your finances and offers, think of what’s best in the long run for the business overall.
Is the winning offer right now recurring revenue? or are you always on the hampster wheel chasing for the next sale?
In scaling a business, it’s hard to move forward if growth depends on new sales every single time.
Scaling becomes easier when you find an offer that people like and that is recurring.
Meaning that you’re getting paid by that customer every month or every year for the product or service that you’re offering.
Think of any marketing program that you may use in your business. Active Campaign, MailChimp, Moz, Ahrefs, and the list goes on forever.
Now there may be companies that have multiple offers and do it extremely well, but just from what I’ve seen, it usually hurts more than it helps.
And if you were to take a serious look at the books, you’d also realize that your split efforts aren’t doing you any good as a business and that it would make more sense to hone in on the offer that is creating the most interest, revenue, and profits.