The Power of Profit: Why Profit isn't the Bad Word You Think It Is

Welcome to Live With The Pricing Lady.

I'm Janene, your hostess.

This show is all about helping you build a sustainably profitable

business while making an unbelievable impact on your world.

Learn from my 20 years of experience and from my guests as we discuss their pricing

challenges, failures, and successes.

Pricing is a way of being or behaving in your business.

My mission is to help you confidently charge for the value you deliver.

Pricing is either hurting or helping your business.

Let's make sure it's helping you reach your dreams.

Is profit a four letter word, something you should fear in your business.

Of course not.

And that's not just because there are six letters in the word profit.

Many business owners shy away from pricing and math because they're

afraid of being viewed as greedy.

If they focus on profit in their business.

In this episode, we'll explore the roots of those feelings.

And the steps you can take to shift your mindset.

Sit back, relax and enjoy the episode.

Today we're talking about why profit isn't the bad word that you think it is.

Now, one of the reasons I wanted to talk about this is because often what

happens is people come to me, they're looking for help with their pricing or

with their strategy and their business.

And they say, Oh, you know, Janine, I really need your help.

And then in the next breath, they say, But I really don't care about the money.

And I always find that a little bit amusing, right?

Because obviously they wouldn't be there asking for help if they didn't

care on some level about the money.

And at the same time, I think it's really important as a business owner

to, you know, confess to yourself that you actually do want the money.

Yeah.

Now we're going to talk about why people have this perception

or why the word profit has this negative connotation to it.

But then we're also going to take a look at what it is that profit brings to your

business and why it is so important that you do pay attention and that you're

of the mindset that money does matter.

Now, one of the things I have said since almost the day one,

when I started my business is that profit doesn't make you greedy.

It makes you smart.

And I wholeheartedly believe that, but we will talk about why you might

have a different perception to that.

So let's get started.

So as I said, This is really rooted, this feeling that we have that

profit is a bad word is rooted in the mindset that we have towards money.

Now, is it bad?

I say absolutely not.

When you are earning profit through, let's say, sustainable and

ethical means, it is an enabler.

It is going to help you get financially independent is going to help the economy.

It's going to help you possibly employ people.

It is going to help bring more innovation into the world.

For me, it is simply an enabler.

Like money is an enabler.

Profit is an enabler in your business and also in your life.

And we'll look at that in a moment.

But why does it (profit) get such a bad reputation?

That really comes down to a perception that people have around greediness.

You know, so we kind of think of Scrooge McDuck sitting there with

piles of money all around him and he's hoarding it and whatever, right?

And we see that as a negative thing.

In many ways, we've been brought up to think that.

We've seen people go after profit at the expense of the

environment or animals or different demographics of people or countries.

That gives it a bad connotation.

We've had people who have done unethical things in the name of profit.

And it's happened in the past.

It's probably going to happen from time to time in the future, but that

doesn't necessarily mean that you are greedy if that's ie profit what

you're focused on in your business.

Even culture plays a huge role in our perception around profit being

greedy, especially as women, oftentimes we are raised and brought up to

give, give, give, to be shy about accepting things in return for that.

Then when you go and you start your business, And you have to ask for

an exchange of value for a price for, for what you offer that can

feel really uncomfortable and at odds with what you've been raised

to believe is appropriate behavior.

This is why it profit has such a negative connotation.

Now, if I go back to what I said at the beginning, that pricing or

profit makes you smart, not greedy.

I'm not talking about chasing after profit at the expense of

other people or other things.

I'm talking about being smart about profit being one of the

objectives in your business.

In my estimation, profit is actually a measure of, one measure, let's be

clear, of health in a business.. I always joke with people, and if you've

ever had anemia, you'll get this analogy really quick, that pricing

is to profit like iron is to blood.

So, if your pricing is good, then it'll help your business

be profitable and more healthy.

Just like if you've ever had to pour iron in your blood, you know

how lethargic and slow you feel.

It's similar when pricing and profit isn't right in your business, your

business really suffers from it.

You must, as a business owner, understand profit, because every decision you make

in your business has an impact on it.

You may think it's the most innocuous decision.

Like one of the questions I get all the time is, should I

put my prices on my website?

A decision like that is a strategic one and it can have an

influence on your profitability.

And if you don't understand what impact it might have, it's harder for

you to make a decision that's right for you, your business, your clients.

Here's three reasons why you want to pay attention to profit in your business.

So first of all, let's talk about growth and sustainability.

Now, I am all about helping people build more sustainably profitable businesses.

This isn't about chasing after profit, at the expense of other

things, but it's about helping you to grow more sustainably.

In order to build and grow your business.

You have to have profit.

Profit is what fuels, in part, the business engine that allows

you to be there for the long term to be able to serve your clients.

If you don't understand it, have a basic understanding of it, it

can't really help you do that.

Next.

It will help you to, I'm just trying to read my scribbles here,

make sure I don't miss anything.

Later on after you've, you know, been in business a while longer, it

helps you to protect, to reinvest, and to innovate in your business.

Yeah, so if you're earning profit, then you can set a little money to side

to help you out when things go awry.

And they do.

If you've been in business long enough, you know that sometimes it's tough.

Sometimes things happen that you don't expect.

A friend of mine in her business, she had an issue.

She had an issue.

where all of a sudden she had to cover some penalties that were unexpected

and it was quite a significant amount.

Now if she hadn't had the profit in her business to be able to

cover that, she could have found herself in a difficult situation and

needing to shut that business down.

You want to be able to have a little bit of money to protect yourself in

a sense for when things are difficult or when unexpected expenses show up.

Reinvest the money.

Yeah, so if you're earning profit, then you have the opportunity to reinvest

that money back into the business that can be in the form of training,

that can be in the form of developing new products or offers or the app

you've already wanted to develop.

It enables you to be able to reinvest back into the business, which helps

you to be more competitive in the market or bring better solutions

to your clients and your customers.

And then, of course, we're talking about innovation and innovation

requires additional resources that probably will cost you something.

So let's say you have an app and you want to revamp the app.

Again, we're talking about needing money in order to make those investments

to be able to innovate further and bring better things to your clients.

And the last reason why is more of a personal reason as opposed to the last

two, which were more business oriented.

It brings you and your loved ones, financial independence and empowerment.

By having a profitable or more sustainably profitable business, you'll

put yourself into a better position.

You have more control, or at least you feel more in control

of your financial future, right?

And even in your business.

It'll help you to build that legacy.

Maybe you started your business to build a legacy for your children

or future generations and having a profitable business is the only

way that you can really do that.

Yeah, unless you're running a charity, of course, but still you have to understand

profit even in charity because you got to figure out how to get to break even.

Yeah, it can also help you then.

Pursue other goals and dreams that you have.

Your business dream may not be the only goal and dream that you have.

And your other goals and dreams, let's say you want to, you know,

fly around the world in 80 days or travel around the world in 80 days.

Yeah, then you'll need resources to be able to do that and having a

profitable sustainably profitable business can help you do that.

Maybe you step out for three months, but you're able to bring someone in

to help with the business in order to maintain things while you're gone as well.

So these are what I see as the three main reasons why profit is not a bad

word as a business owner, why you really need to pay attention to it and give

it the attention that it deserves.

What I see with a lot of people, especially when they're starting

businesses, is they don't really take the time to understand profit.

They shy away from it they tell themselves, I'm not good at the

math, or I don't really understand the numbers, or, you know, it's

not a sexy topic for most people.

Most people don't get really excited about calculating profit unless you're like a

Scrooge McDuck, right or a finance person.

Maybe, but it is important to the overall health and success in your business.

So all I can encourage you to do is to take a little bit of time

to make sure that you understand profitability in your business.

Profit is an enabler.

Yeah, it does not make you greedy.

It makes you smart, and it will enable you to do, like we said, build and grow

a sustainably profitable business, help you protect and reinvest back into that

business, and give you that financial independence and empowerment that you're

looking for as you go on in your business.

Now that you understand the root cause of this negative connotation that the

word profit has and how it impacts and how important it is to your business.

Let's talk about some of the things that you can do, that'll help you to improve

the profitability in your business.

I'm focused here, primarily on the things related to pricing.

For a lot of businesses when they want to improve profits, their go-to strategy

is to reduce costs, reduce costs.

And that can in some businesses be effective, but you actually have more

power to improve profit in your business when you focus on getting better prices.

And that's why I've chosen to focus on those things today.

Now, the first thing you want to do is you need to start adjusting your mindset

or your attitude towards the word profit.

So what I can recommend as a tip for you.

Is to sit down right?

Or say the word profit out loud a few times.

And pay attention to what you feel, to what thoughts come to mind, tennies

physical sensations in your body to any chatter that happens in your.

In your head, as you say that, or write that or think that word.

And sit with that for say a minute or two.

And then write down all the things that came up for you.

That will help you to identify what actually might be getting in

the way of you shifting towards a more profit oriented mindset.

And that alone will help you.

For example, I may have said this before, but it bears repeating again.

If you think, profit is the root of all evil, then when it comes to doing

activities in your business to improve profit, you will hold yourself back.

And that's what we're trying to start tackling with this exercise.

Now here's three other ways that you can go about improving

profitability in your business.

And the first one is by drum roll, please doing the math.

Now if you follow me, you've probably heard me say this.

A lot and I can't emphasize it enough.

The great news for you is I have a toolkit on my website, which will

help you to be able to do just that.

I'll pop that in the show notes of this episode.

You can start to use the profit impact calculator to be able to understand

profitability in your business and how different decisions that you

make can impact that profitability.

I suggest that you start there.

That will help you to start to explore the math in your business.

The more awareness you have about how your business decisions impact profitability.

The better decisions you can make because you'll have more

information to make it with.

The second thing that you can do.

Is clean up your act.

A lot of times when you feel a lack of confidence or uncertainty around

the prices that you have, you try to, let's say soften the blow for

potential customers by offering discounts and dispatch discounts.

Unnecessary business discounts are the fastest way to reduce

profits in your business.

Anytime you're offering discounts, there should always be a solid.

Strategy or business reason behind it.

It shouldn't just be because you feel insecure about the prices

or how your customers will react.

So, if you clean up your behavior in that context, then you would

actually give fewer discounts, which would lead to better profits.

Yeah.

Now, I know a part of this is going to come from you, having

prices you feel confident about.

It's not the topic of this episode, but I do have courses that can help you

to be able to build that confidence.

I'll pop a link in the show notes also to my upcoming cohort of the fair

price formula, where you can learn my price setting thought process.

They'll give you that boost of confidence and that understanding

of how to go about setting prices that you feel wonderful about.

Now the last tip that I have.

The first tip was do the math.

The second tip was clean up your act.

And the third tip is to focus on the value of your offer delivers.

And there's two reasons for this.

If you understand the value and you can develop the skills to

communicate that effectively, you are going to feel more confident

when you put those prices out there.

And your confidence is going to be reflected and how your customers

perceive what you can do for them, whether that's through your

product or service or a software.

It builds your confidence, but it also helps align the customer's

perception of what they're willing to pay to the value that they're actually

going to get out of your offer.

And that again, can boost your profitability, which is why

you want to focus on value.

At all times, really, you want to focus on value.

Often people will come to me and say, Janene, I need a list of

arguments to argue with people when they object to my price.

No, you don't need a list of arguments, which you need are the

tools and the skills to be able to focus the conversation on value.

And that is a different thing than going into defense mode.

So focused on the value.

What your customers value?

So understanding what your customers value.

Creating value for them based on what you know, they want and need.

Creating that value in your offers and then pricing for that value and

confidently communicating about it.

So focus on the value.

Ladies gentlemen, that is what I wanted to share with you.

In this episode of Live with The Pricing, maybe all the links I've

mentioned in this episode, we will put into the show notes for you.

I would like to wish you a wonderful day and until next time, enjoy pricing.

Thank you for listening to this episode of Live with The Pricing Lady, the podcast.

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If you've got comments, questions, or topic ideas, go on over to thepricinglady.

com and contact me there.

Not sure where to start when it comes to improving pricing and profits?

At ThePricingLady.

com you can download a copy of my Self Assessment Pricing Scorecard.

Find out where it's going well and where you can begin improving.

Or just simply book a discovery call with me.

There we can discuss what's up with pricing in your business and

how I might be able to help you.

Thanks once again for joining.

Remember, pricing can hurt or help your business.

Let's make sure it's helping you reach your dreams.

See you next time and as always, enjoy pricing.