Too many customers is not a good thing

Have you ever been so busy you had to turn customers away? Sounds like a good thing. But if you've ever been there, it's actually a problem. This is lessons business school didn't teach you. Today we're talking about supply and demand. All right, so you've probably talked about this in, like, your economics class at a very macro level, talking about the market. I want to talk about it in relation to your business. So imagine you've got a lemonade stand. You could be either supply constrained or demand constrained. Okay, so supply constrained just means you have too many customers and not enough lemonade. And so your solution is, we need to make more lemonade. Lemonade, we need to make it faster. Demand constrained means you have plenty of lemonade and it's just sitting around gathering flies, but not enough customers to come buy this lemonade. And so the solution there is we need to either work on marketing or sales to get more customers in the door and sell more cups of lemonade. Now, if you're supply constrained, that means you have too many customers and not enough lemonade. So there's two solutions. Most people will say, oh, we need to make more lemonade. We need to get more people to make lemonade. But what I like to do is simply just double your prices because that's going to turn customers away and you're going to to make the same amount of money from selling half the lemonade. And so if your business isn't growing at the pace that you want, you need to identify if you're supply constrained or demand constrained right now, because that will tell you what actions you need to take to actually grow your business as fast as you want it to be growing.