How To Know Whether A Business Model Will Be Profitable Or Not

There are 11 factors that you need to evaluate your business on if you want to actually measure the sustainability and profitability of that business over time. And this podcast, I actually want to answer that question on how do you know whether the business model that you currently have will be sustainable and profitable or not? Because ultimately, business is about solving problems. It is never about your product. Okay. And it's about solving it in an efficient way where your customers are able to see the value and. And the profitability is the just the outcome of it. You know, the value exchange is the profitability that's going to be there and of course, the repeat buying that your customers are going to be having with your products and even the referrals that they're going to be bringing based on the great customer experience that I've had with you, if they're going to be asking other people to also come and experience your product. Now, these are all the different factors. So what I'm going to do is I'm going to go through this one by one. There are 11 factors. And what I would like you to do is make note down, make note of these 11 factors and also map yourself on a scale of 1 to 10 on how good are you in each of these 11 areas. So whether you're currently running a business or you're planning to run a business and you have a business idea in mind, or maybe you're in the coaching or a knowledge business, map each of these 11 areas on a scale of 1 to 10. As I'm completing this particular podcast, and by the end of this, you can, you would know exactly where you stand and which areas you need to improve. Okay? Number one is passion. Do you really love whatever you're doing, whatever business that you have taken? Like, for me, it's a knowledge business. I teach people on how to become coaches. I teach people how to launch digital business and digital products. This is something I love. I can, for me, does not seem like work at all. I do at least four to five training sessions every single week for my different groups of people. And it. It just feels so much in tune with my Persona and my. My being. Because if you don't have a passion in the topic, you will not have the, you know, the grit to overcome the obstacles and challenges and to go deep and innovate and do research and stuff like that. Okay? So whenever you face an obstacle, you'll immediately quit or you look at the next trend to jump to. So never pick a business model or an idea if you don't love Doing it. That's the first metric. So score yourself on a scale of 1 to 10. Okay. Second is, is your passion solving a problem in the market? See, if your passion does not solve a problem. For example, I have a passion in music, I make music at home and all of that, but it's not solving a problem. So if your passion does not solve a problem, it is only a hobby. But let's say you have a passion in cooking and you also want to solve a problem by launching a YouTube channel on just like the best Punjabi cuisines and stuff like that. So once you take the problem focused approach where you're not just cooking for yourself and for your pleasure at home, but you actually wanting to give some knowledge out there to serve others who are having similar problems, then there is a business model in there. If your passion does not solve a problem, there is no business model. The third area is getting clear on your target market. If you're going to say that my target market is from age 20 to 40 or say 20 to 50, everybody. If you're trying to sell to everybody, you're selling to nobody. So you have to be very specific on who are you serving and what problems are they facing. For example, a 15 to 20 year old male living in a metro would have completely different problems as compared to a 45 to 50 year old woman who's living in the same metro city. Different mindset, different problems, different wants, aspirations, desires. So number three is get your target market clear. Number four is you have to test the market potential and see if there is a trend over there. For example, when Covid happened, starting a fine dining restaurant at that point of time would have been the worst idea. But launching a cloud kitchen would have been a great idea because everybody was at home. So you also have to check and see whether there's a market potential. And there are many businesses today that are getting outdated and they're not willing to adapt and change, which I'll come towards the end. But you have to look at market potential so that you don't swim against the current, you're going to be swimming with the current and you're going to be riding the trend. Now the business model that I'm in right now, which is a knowledge business, I'm pretty much riding the wave. I started this in 2018. We had over 30,000 customers with just a four member team. And the reason we were able to ride this wave is because I aligned myself to the market potential and I had a passion in it and I was solving a problem. In helping people find their niche and launch courses. And I was very clear that my target market are experts, coaches and trainers. See, that's the reason I was able to acquire customers really fast, because of the market potential. So again, evaluate yourself on a scale of 10, whether the business model, what you have is having a good market potential. Number six, does your business model have an X factor or in other words a usp? How are you able to differentiate yourself from everybody else? Like even in my coaching business, there are many people in the coaching and training industry, you know, selling similar stuff, you know, high ticket coaching, high ticket consulting or you know, funnel building or this and that. I think the X factor that I bring to the table in my community is the element of building communities and also having a value driven community system. Of course, a spiritually grounded business where I'm also targeting people are more family oriented in my community. So people who are, who are natural tribe builders and who want to make a difference in the world. So even though I'm teaching the same topics that others may teach, but I'm able to attract a market who vibe with my vibe which is rooted in value systems, in spirituality as well as in contribution to society. Okay. And of course the tactical knowledge is always going to be there. So you need to find out what is your X factor, what are your core values that can be used as a usp? And of course my usp. If you see in all of my courses and content, if you ask any of my students, I don't beat around the bush, straight to the point, point shooter style teaching. And that is what has Resulted in over 7,000 plus reviews at Five Star on Trustpilot, if you go and search for it. So the X factor, when I started I did not have an X factor. But the more I became a student of my topic, the more research I did and the more I started to simplify things for my students to get results and the more success stories I started to generate, the X factors started to emerge. Number seven is pricing. How exactly are you pricing your strategy? What's your pricing strategy for your products? So many of our, you know, Indian coaches and trainers, they know, they listen to people from the western world, from us, from the Taiwan countries and everybody's talking, you know, the dollar value and stuff. And what I've observed is many of those strategies don't work in India. I've been very focused on India right from day one though. I have a good 10% of my customers from abroad, from other parts of the world. But the pricing strategy Whatever I have come up with, it works beautifully across all geographies and more tuned for India because of the volume. I mean I've been able to attract over 30,000 students. How is it possible? Because I got the pricing right. Okay, now what's the pricing strategy for a knowledge business? Keeping your entry product under ten thousand rupees is a sweet spot. But above five thousand, below five thousand attracts a particular strata of society. Between five to ten thousand attracts a particular caliber of people are coming in who have the affordability to invest, say 20,001 lakh, 2 lakhs and above. So the reason I was able to make my business model profitable is because I have a 7999 starting product, I have a 20,000 mid layer product and then I have a 2 lakhs backend product. And based on the way that I have positioned my products, which is all digital products, out of 10 people, two people buy my 2 lakh product. So if 10 people buy 8,000 rupee product, two of them end up buying a 2 lakh product. So in the last whatever five years I've been doing this, over 30,000 students are there at my, you know, in this range of the 5 to 10,000 product. And from that we have close to 4,000 people who have bought my higher ticket product. Of course now it is 2 lakhs. But when I started off, I started off at a lower price point. But the principle is when you create different, this is what we call as a value ladder, okay? Different ladders of products where people are able to see a higher value when they, when they pay more and come to the next level that's going to be taking the game to the, to the next level. See the simple logic is even in McDonald's, right? They when you go to buy a burger and the person on the counter would ask you would you like to add some fries along with this? And if you see the pricing of the medium sized fries and the large fries is very negligible. So people, they would go for the larger fries, okay, where they feel the quantity is more but just for maybe a dollar or more. But see this one small tweak, it actually has helped them boost their profitability and they pretty much crack the code on the pricing model over there for different markets. So what am I coming to share with all of you is if you want to know whether your business model is profitable or not, you got to get the pricing right. And what pricing strategy I shared with you right now is for a knowledge business. But if you're into any other kind of business, you got to look at the what pricing fits well. And again, price is in your own mind. In the beginning you can start with lower pricing and then as you are able to generate more results, more success stories for the people in your community, then you can increase the price. Next is marketing. A lot of people have great products, but they're not known in the market. They're not seen in the market because their marketing sucks. Now what do I mean by marketing? Putting yourself out on the Internet, on social media in the form of, you know, Instagram Reels, YouTube videos, podcasts like this, blogs, articles, Facebook, LinkedIn and being all over the place and sharing valuable pieces of content to attract people coming to you. So if you're not actively marketing and selling, there is no point having a great product. Okay? And even when it comes to selling, my form of selling has always been one to many. Selling okay though I do, I've done one to ones. I even now I do a lot of one to ones but my selling process is one too many. So people watch my YouTube video, they click on the link or they listen to my podcast, they click on the link, they come to my webinar, they attend the whole 90 minute webinar. All my webinars are automated. It happens every single day. And the end of the webinar I give them an offer and people buy. So daily I'm getting sales coming into my system because of creating an automated system like that. And if you would like to know more about that, please click on the link in the description and get to my webinar. Or you can go to SIDS Co and attend my next webinar to see exactly how I do it. Number nine are customer reviews. If you want to know whether your business model be profitable or not, are you able to get a quick feedback from your customers on how good your or bad your product is? In the beginning, in the beginning stage, my product was not very good. But then I was able to quickly capture the feedback from my customers and I was able to quickly improve my products so that, you know, I don't even have a single customer review saying that whatever I paid for, I did not get the value, you know, that you'll never see in my community. In fact, we have one of the lowest refunds rates in the community and we are very quick to give refunds if anybody is not even seeing the value in what we are offering. Because we know that for every one rupee that anybody gives us, we are able to give them minimum 10 rupees, if not 20 rupees in value. So customer reviews. In fact, you can go and check out trustpilot and read all the reviews. It's not just an awesome product or a great teaching or a nice webinar kind of reviews. There are many detailed reviews that if you go read, you will be able to understand the emotion of the customer. And I read these reviews every single day just to understand how I can improve and if I'm really delivering a good customer impact. And my inspiration for this has been two major companies, two big companies, one is Apple, another is Amazon. These two other two companies I've observed, they have been the most customer centric and they've been very simple in their way of giving a great customer experience.

Number 10. How do you know whether your business model will be profitable or not? Cash flow management. You can do all of this, you can do all the marketing, you can have everything and all the selling will be very good, good customer views. But if you're not able to manage your house, the money in your house, in your business, there is no point doing anything else. For me, I believe in frugality because constraints breeds resourcefulness. And I like to keep my teams very lean. I like to keep my outflows as much as possible. I don't like to just spend money just because I'm making money. And I reinvest my money back into technology, I reinvest it back into customer experience and I reinvest a lot of my money back into, you know, investing in long term investment vehicles, not looking for quick bucks or making money fast. So this cash flow management is very key and of course very, very important. Paying your taxes on time. So I follow a formula called twcgo. I have a tax account, a wealth account, a charity account, a general account and operations account. Five different bank accounts. Okay. My receivable account is my main current account and whatever money hits that I moved into another sub current account that I have in my same with my same bank. 40, 30 to 40% goes towards that which is the tax amount which covers the GST as well as the itr, the income tax returns. And then whatever is remaining, we use that for a percentage goes towards charity. A percentage goes to our wealth. We invest into our portfolios and stuff in the, you know, we have our SIPs going and we also have an account for general which is all our household related stuff. Rental, the children's school fees, fuel and all of that stuff is covered. Mobile, bills, food, groceries. And then we have an operations account which is the main current account itself, which you use for other business operations where we cover all the costs like ad cost, tool cost, team costs, event costs, and everything else connected to the business. So this cash flow management has been, we've been doing this right from day one and that's what has helped us be very profitable. And Last point number 11 is if you want to know whether your business is profitable or not, you got to be adaptable. If you're rigid, you are going to break. If you're flexible, you will be able to, you know, journey through whatever storms that may be coming. Okay, this is what I learned from Jeff Bezos, the founder of Amazon. He says be fixed on your vision, but flexible on how you get there. Most people today are rigid on their, you know, they're very fixed on. I mean, their vision is very flexible, but they're very rigid on their methodologies and they'll just break over time. So these are the 11 points. If you found this podcast useful, I would like you to share which points inspired you the most. And I would like you to also subscribe to this podcast so that you get more in the future. Catch you the next episode and I've officially completed 29 out of my 90 day podcasting challenge. Going on a streak, hoping to complete all 90 days. And if you're already a part of my community, take up a challenge like this for yourself. And the best way you can challenge yourself is to upgrade yourself to my diamond certification level, which can help you accelerate your journey much faster. So there's a link in the description or you can go to sidzsids co diamond and see you in the next showcase. All the best.

Sam.