Starting and Growing My Business

Contents
Introduction
Table of Contents
1: How do I start or improve my business?
2: What do people want to buy?
3: How do I buy my product and set the sales price?
4: How do I know if my business is making a profit?
5: How do I separate my business and family money?
6: How is my business progressing?
7: How will I grow my business?
8: How much can I afford to invest to grow my business?
9: How do I know if I should use a loan to grow my business?
10: How will I attract more customers and close sales?
11: How will I increase my profits?
12: How do I continue to improve my business?
Am I Progressing
Letter of Completion
Business Success Map

Learn

“Learn,” Starting and Growing My Business (2014), 168–74

“Learn,” Starting and Growing My Business, 168–74

Learn

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How will I sell more?

Time:Set the timer to 60 minutes for the Learn section.

“Made the Sale, Missed the Sale!” (No video? See page 178.)

Read:That was easy. Maria made the sale. Silvia got what she wanted. They’re both happy. But Maria missed out on a bigger sale—the additional sale of a delivery service. Adding a delivery service would allow Maria to sell more, or “upsell,” to Silvia.

“Upselling” means giving our customers the option of buying more or better products than they were going to buy.

For example:

More: Offer a drink or bread to a customer who ordered fried fish
Better: Offer a higher quality sewing machine to a customer who is thinking of buying a lower quality sewing machine

“The Upsell” (No video? See page 178.)

Discuss:How was Maria able to upsell a delivery service to Silvia? What are some examples of upselling that you have seen?

Successful business owners always upsell.

Read:QUESTION OF THE WEEK—How will I increase my profits?

ACTION OF THE WEEK—I will try two ways to upsell. I will try two ways to lower my costs.

WHAT SHOULD I UPSELL?

Read:Customers won’t buy something more just because we suggest it. It must be something they want more than the original product.

They may be willing to pay more for such things as:

Saving time
Saving money
Quality
Quantity
Service
Relationships
Speed
Reliability
Beauty
Reputation

Successful business owners know what their customers value.

Practice:What would your customers pay more for? How could you find out? Get with a partner and discuss what you think your customers value.

Use the table below to write three ways you will find out what your customers value (examples provided).

MY IDEAS ABOUT WHAT MY CUSTOMERS VALUE	WHAT I WILL ASK OR DO TO FIND OUT
I think my customers might value reliability.	Ask customers, “If I guarantee delivery by 5:00 every time, would you be interested?”
I think my customers might value fresh product.	Label one box of fruit “picked fresh this morning” and another box “picked this week.” Watch which customers choose.

After writing your ideas, share them with the group.

What should my upsell price be?

Read:A customer may want something more, but what price is he or she willing to pay?

At what price are we willing to sell? We have to make a profit.

For example, Naomi tested her idea that her customers valued quality. They usually chose the fruit that was “picked fresh this morning.” The problem is that her costs were higher on the fresh fruit. She actually lost money.

She decided to sell her “picked this week” fruit for 10 (profit = 1) and her “picked fresh this morning” fruit for 13 (profit = 3). She will try to upsell the freshly picked fruit to her customers.

Practice:Get with a partner. Look at your customer values from the previous page. List your upsell products or services. Use the table below to list your prices.

UPSELL	MY UPSELL PRICES
I will sell fruit “picked fresh this morning.”	Fruit “picked this week” price = 10 (profit of 1) Fruit “picked fresh this morning” price = 13 (profit of 3)
I will guarantee that laundry is done by 5:00.	Regular next-day laundry price = 20 (profit of 4) Guaranteed laundry price = 27 (profit of 8)
I will sell skin-care soap.	Regular soap price = 12 (profit of 2) Skin-care soap price = 18 (profit of 6)

Discuss:After writing your ideas, share them with the group.

How will I upsell?

Read:What would make our customers want to buy more? We need an “upsell phrase.” An upsell phrase could be: “It costs a little more, but ____.” We fill in the blank with the value we know is important to the customer.

For example, when Naomi’s customers look at the “picked this week” fruit, she says, “I have fruit picked fresh this morning.”

And then she adds the upsell phrase, “It costs a little more, but it is fresher.”

Successful business owners make it easy to buy from them.

Practice:Think of your own business. Think about your upsell items. What will you say to upsell to your customers? Use the table below to create your upsell phrases (examples provided).

WRITE AN UPSELL PHRASE
First Product or Service	Upsell Product or Service	What My Customers Value	Upsell Phrase
“Picked this week” fruit	“Picked fresh this morning” fruit	Quality (freshness)	It costs a little more, but it is fresher.
Half liter of milk for 3	Liter of milk for 5	Saving money	It costs a little more, but you get twice as much for only 2 more.
Regular soap	Skin-care soap	Quality	It costs a little more, but it is much better for your skin.
Laundry service	Press shirts	Saving time	It costs a little more, but it saves you a lot of time.

How will I sell my products more quickly?

Read:Successful business owners sell more to each customer so they can “turn inventory” quickly. To “turn inventory” means to sell all the products we bought from our suppliers. We can use upsell techniques to sell more to each customer.

Successful business owners turn inventory often.

“Turn Inventory Quickly” (No video? Read page 179.)

Discuss:How could Maria turn her inventory more quickly? How could this increase her profits?

BEFORE	WHAT MARIA DID	AFTER
Maria paid her supplier 17 for a liter of milk.	She talked to her supplier about a discount when she buys in bulk.	She now pays 15 for a liter.
Maria increased her inventory with her bulk purchases. She did not change her prices. It took longer to turn her inventory and some of her milk went bad.	She used an upsell technique: if they buy two liters or more they get a discount.	She now turns her inventory in two days. No milk spoils. She has the money to buy more. And she makes more money.

Read:Some specialty products take a long time to sell, and that’s okay. But, if we have products that simply are not selling, it means that our valuable business money is stuck in that inventory until it sells.

Discuss:With a partner, discuss the following two questions. Write down your ideas.

How can I turn my inventory more quickly?
How can I reduce my supply of inventory that simply isn’t selling?

How will I lower my costs?

Read:Turning inventory quickly increases our profits. We can also make our businesses more profitable by lowering expenses.

Practice:Get with a partner. Take turns reading ways to reduce expenses below. Write other ways you can reduce expenses.

FIXED	VARIABLE
Make do with what we have Rent	Negotiate with suppliers Use multiple suppliers

Return to the whole group and share your ideas.

Read:We can also think of ways we can avoid expenses.

Practice:Naomi is thinking of using two helpers: Samuel and Joseph.

She would hire Samuel to work at her fruit stand four hours every day (fixed cost). She would not hire Joseph, but she would only call him to make deliveries as needed (variable cost).

Get with two other people and discuss ways of avoiding or reducing Naomi’s fixed and variable costs.

Practice:Now it’s your turn. List the variable and fixed costs of your business. Get with a partner and discuss ways to reduce these costs.

FIXED	VARIABLE