Ryan Daniel Moran outlines three steps to build a profitable, scalable business: raise prices instead of discounting, design narrowly for your ideal customer, and deliver provable results so they refer others. He uses examples like $5,000 workshops and $50k-$100k client engagements to show how premium pricing for a small audience beats the growth-at-all-costs model.
So this is crazy. This is weird. I live in Texas and it's hailing, and I mean like really hailing here. This is nuts. Like a patch of ice just flew off my car here. So what we're gonna do, since hell, it must be freezing over, we're gonna give my best strategies for building the most profitable business you can build. Because obviously the world is ending today, hell is freezing over and it's hailing in Texas, so I might as well just give you stuff for free. Okay, so there actually is a very counterintuitive approach that most business owners do not follow.
If their goal is profitability. Now I know that sounds weird. Like, whose goal isn't profitability? Tech startups. There's plenty of businesses that do not care about profitability. There's plenty of businesses that don't care about profitability for five to 10 years. So for example, we host an event every year called the Capitalism Conference. And I was on stage with AJ Vaynerchuk, who.
Is the head of Vayner Sports. So they're sports agencies. You see that patch of ice? My goodness. Anyway, so AJ Vaynerchuk was talking about how a sports agency is not profitable for the first seven years on average. So you know, they're not worried about profit the first seven years. So if your goal is profit, you have to think about business differently than a lot of other businesses, a lot of other entrepreneurs. I know that sounds crazy, but a lot of entrepreneurs get it wrong because they're following a different model. So here's how you grow the most profitable business possible. Number one, raise your prices. I mean this quite literally. There are a mistake that businesses often make is dropping their prices in order to get more customers or because they don't feel like their existing product justifies a higher price point. I'm going to tell you exactly how to fix that. But a lot of entrepreneurs are afraid to raise their prices because they don't want to isolate people because they want to get the most customers as possible. But if your goal is profitability, there's a better way to do this. The way that you justify raising your prices is step two. You have to to know your people, know who your ideal customer is who desires what you've got the most. This is true in software businesses, it's true in service based businesses, it's true in client based businesses. It's true in physical products businesses. For example, if you know exactly who your target market is, you can create a spatula or a camera, we can create a GoPro, we can create whatever we want specifically for that group of people. And because it's specifically for that group of people, it can be twice or three times the price. For example, a pair of shoes versus a pair of running shoes versus a pair of Mizunos versus a pair of elite level marathon runner shoes. A pair of shoes versus Ferragamos. A pair of shoes versus CrossFit shoes. You see where I'm going. The more specialized, the smaller the group of people, the higher the price.
Most businesses are trying to sell product rather than getting people. And if you know exactly who your person is and you can communicate with them, you will very easily justify a higher price. Again, for example, I have a mentor in the client world who helps a lot of people develop high end client agencies. And his starting price for someone to come spend two days among a group of other people that he's training is $5,000. The front end price is $5,000. Now that means that his events and his workshops are only 6 to 12 people at a time.
But those numbers are just fine.
To work with him ongoing, it's anywhere from 50 to $100,000 a year. Now, he might only have.
A few dozen clients, but that's a lot of profit. Meanwhile, a lot of much bigger businesses have a lot more clients and a lot less profit. This is why I set the context of if your goal is profitability, we go premium in the market and we know exactly who our people are and we communicate to them directly. We develop our products specifically for them and we charge a premium for it. If we can prove results, if we can prove that our stuff gets our customer, that person that we know the result that they want, we can sell the result and not the thing that we are selling. Big key here. Your job is not to sell your product. That's not how you justify a high price point. Your job is to know the result your people want so that you can sell the result and not just the product. Number three, when you know your people and you can get them results, then your profitability is going to come from referrals which happen naturally when you are focused on creating the change or the shift in the customer that they need in order to feel like they got their value out of paying a price point. It's really easy for people to recommend other products and brands when they're getting results. Why? Because it makes them look good. When they can brag about the result, it is actually.
A benefit for them to share how they got the result and they will recommend you or your product or your service or your company which allows that person pool, the ideal person that you target, to widen and deepen. See, a lot of entrepreneurs are afraid of narrowing their market because that will make the market smaller. But what they don't realize is when you have a specialized turn target market and you charge that premium and you can justify it with results. Those people all know each other and they all talk to one another and they hang out in Facebook groups and they message each other on LinkedIn and they follow each other on Instagram and they have parties together and they work out together. And so your results that you created spread, which means if you suck, you either got to get better or you got to go into a different business. That is how you can justify a high price point, have a really profitable business and it actually be one that you enjoy. And that's fairly simple and easy because you can target and focus on one singular skill that produces results, one specific type of client that you can serve and you'll know naturally grow the business because they'll be bragging about the results to one another, which will give you free marketing over the long term. That's how you grow your most profitable business. Hey, I'm Ryan Daniel Moran. I am the founder of capitalism.com and I've helped a lot of entrepreneurs grow really profitable businesses across a variety of different types of businesses. My specialty has been growing Internet based businesses. I have built and sold companies for millions of dollars and I'm most proud to say that I have actually helped more than. I don't know the exact number, but I know it's over 300 entrepreneurs build million dollar businesses which I'm really proud of. If you like this video, you can subscribe to this channel because we give away a ton for free. And I also have a podcast over@capitalism.com which you can find for searching just my name or capitalism.com and wherever you listen to podcasts. And I'm very proud of the results our students get and they're very proud to brag on it in front of you on our platform here@capitalism.com and on our podcast. So if you want to learn more, you want to become like one of them, subscribe to the channel and subscribe over on where you listen to podcasts. And if you want to dive into this stuff, head over to capitalism.com we have a ton of free resources that will help you dive in, get plugged in and start getting results. Thanks for watching.
