How Do You Build A Profitable Business?
A wellness brand with a strong focus on design and curation had an impressive roster of clients and offerings, but was not achieving a suitable volume of revenue to sustain its business. The perceived culprits of the brand's revenue issues was its pricing, as well as a lack of a commission structure to support the brand's input in a multitude of successful partnerships. Due to the nature of the brand's work, pricing always had to be recalculated on a per-project basis, deepening the brand's challenges when it came to pricing.
We were brought on to not only fix the brand's pricing, but to manage the operational and financial aspects of the brand as a Business Manager. We discovered that an official audit was never performed on the viability of the brand's pricing in relation to its output per project. In addition, the brand's current pricing structure was not built to support its monthly business expenses, or a profit margin to support its future growth. Therefore, it was inevitable that the business would always be at a financial deficit.
To restructure the brand's pricing, we collected the business' monthly expenses, future plans for expansion (and converted this into concrete numbers), tax projections, and pay for each contractor on its team. We used these numbers as the foundation to create a robust pricing calculator that allowed the brand to create low and high pricing quotes for each project proposal. The pricing calculator allowed the brand to input different characteristics of the project proposal into its quote, such as its projected hours of design, projected hours of project management, and the specific team members involved, so that it would be hyper-accurate in providing a competitive quote to the client, while meeting the brand's financial needs for the project and its business. We mimicked this format to also create a commission calculator for the brand.
After producing this pricing calculator, our work continued with coaching the brand through the actual implementation of this new pricing. Increasing a startup's prices (and keeping them that way) also requires a mental shift in the team who's selling these services at the new prices. We coached the brand to adopt the confidence and positioning needed to sell potential clients on the value behind their new prices.
- Pricing & Scale Strategy
- Business Management
- Leadership & Startup Coaching
All identifying information about the startups presented in the case studies above have been removed to honor non-disclosure agreements between Ascent Strategy and its clients.