Dan Martell - The first question I ask new clients

00:00:00.000 If somebody bought your business tomorrow,

00:00:01.200 what's the first decision they would make?

00:00:02.680 Why have you not made that decision?

00:00:04.060 For most companies is they would fix their pricing.

00:00:06.860 I had a friend of mine, Rachel, she was a consultant.

00:00:09.660 She was crazy busy trying to keep all the plates spinning,

00:00:12.820 but there was no profit.

00:00:14.220 She was paying herself 30, 40 grand a year.

00:00:16.340 She thought that was normal.

00:00:17.740 When I looked under the hood,

00:00:19.560 I learned that there was a gap between

00:00:22.340 what she was charging

00:00:23.560 versus what it cost her to deliver her service.

00:00:26.660 The reason why pricing matters is because every industry,

00:00:29.940 It doesn't matter if you're in real estate,

00:00:31.980 coaching, agency, there's a gross margin that's normal

00:00:35.520 for your industry that you have to map to.

00:00:37.940 When I looked at Rachel's business

00:00:39.660 and we understood where her gross margin was,

00:00:42.220 all we did was double her prices.

00:00:43.660 Half her customers left,

00:00:45.400 but it created capacity, which is great.

00:00:47.560 But she doubled her business,

00:00:49.380 which mean that she was making 25% more profit

00:00:53.400 and they were easier to work with

00:00:54.840 and they were fun to work with.

Dan Martell - July 06, 2023