Peaceful Profits Podcast Ep. 36 - How To Beat Inflation With Your Business
Synopsis:
Inflation is one of the toughest challenges entrepreneurs face—but it doesn’t have to hold your business back.
In this Peaceful Profits episode, Mike Shreeve shares practical strategies to “outpace inflation” by making your company more valuable every 90 days.
You’ll learn how to nurture winning systems, cut inefficiencies, extract more yield from existing assets, and use smart pricing strategies to stay ahead.
Packed with Peaceful Profits case studies and Mike’s personal insights, this episode will show you how to thrive no matter the market.
Transcript:
How To Beat Inflation With Your Business
[00:00:00] Hello, my defense. Hope you're doing well, Mike Shreeve here. Thank you very much for listening to this episode. I'm looking at an article from Fortune Magazine, the title of which is US Inflation Surges to its highest one year price hike in over 40 years. First line of the article says the Labor Department said Tuesday that its Consumer Price Index jumped 8.5% in March from 12 months earlier, the biggest year over year increase since December of 1981.
In today's episode, I wanna try and help you through this. I'm not an expert in finance. I'm not an expert in economics. [00:00:30] I didn't even go to college. So it's not like I'm, some accomplished economist. I cannot help you in, in, in what you should do with your investments in your personal finance, et cetera.
What I can help you through though, is difficult and trying finance. Times, especially when those financial stressors are external. As a business owner, this is certainly not my first rodeo from market-wide, external financial pressures to maybe financial pressures I've created myself, right? And we do that sometimes as business owners.
And so I wanna give you some [00:01:00] thoughts and some tips and tricks today to help you through this because one, being afraid of what's happening is not as helpful as understanding what. Is happening to your business in these conditions and then taking an objective look at what's happening to your business so that you can make the smart decisions to deal with what's happening now.
So the first thing I wanna say is I have never truly understood when people are concerned about competition. Let's say for example the Peaceful Profits program, as it [00:01:30] competes in a very competitive space, right? It's coaches, coaching coaches and internet marketing, teaching internet marketing, right?
It's a very competitive space. There's a dime a dozen gurus. Everybody makes all sorts of claims, et cetera, et cetera. It's a very competitive space. It's. Packed full of really smart people and really smarty people. And both of those people are very difficult to compete against. But the reality is that the people who are smarmy end up creating customers for us when they rip them off.
And then the people who are really smart end up creating customers for us because they do a lot of work in helping people through Eugene Schwartz's customer awareness spectrum, if you aren't familiar with that, the [00:02:00] short version is basically they educate our customers, right? So is competition really competition in this work in the help industry?
I've not seen a compelling case. Most people who do purchase products, courses, et cetera, in the help industry tend to purchase more than one product course book program. They tend to do it across multiple gurus over their lifetime. Just like my fiction business, just because you read a fiction book by one author doesn't mean you're not gonna also read a fiction book by another.
So I've never really understood the concept of a competition amongst other businesses within the same nature industry as when it comes [00:02:30] to the help industry, however. However, I have always believed that there are external forces at play, which we can call competition, and inflation is one of them.
In fact right now, inflation is probably the biggest competitor that you have. Now, I want you to think about this. If we if that article is true and that we've seen an 8.5% increase in the consumer price index since the same [00:03:00] time last year. Okay. Then another way of saying that is that everything is 8.5% more expensive, which a helpful thing to think about, but as business owners, and even better way to think about it, is that the revenue.
Our company has generated or is generating now is actually almost 10% less valuable. It's almost 10% less valuable. Another very simple way of thinking about that is that if you made a hundred thousand dollars [00:03:30] this last month and you are still thinking of your a hundred thousand dollars in terms of what you thought a hundred thousand dollars could get you a year ago, you're going to find that you're about $10,000 short in terms of the value of that same money.
We can extrapolate that to another step and essentially say that the effort. The efficiency, the value of the work that you are doing now is almost 10% less [00:04:00] valuable than it was a year ago. Okay. Now it's worth pausing this episode and spending the rest of you the day or week just thinking about how everything you're doing is at the moment, almost on its way to, I think, 10% less value.
That means your time, the team's time the everything, every aspect of your business that is being affected by this external competition. I like to think about inflation in this way for a [00:04:30] very simple reason. I can do something about the value that my company creates. I can't do anything really about external forces and whether or not the people who are pulling the levers this way and that way are really pulling them the right way.
What I can do, however, is ask myself a very simple question. Has my business in that same time period become 10% more valuable? If the answer is yes, then I'm beating [00:05:00] inflation. Okay. If the answer is no, if my company hasn't actually become 10% more valuable in the past year, then inflation is beating me.
And yes, we are in a period right now of rapid inflation, but inflation doesn't disappear. This is part of the existence as a human being in a business in this thing called, we call the free market. There's, we can have a long conversation about whether it is or not truly free market. But the idea that inflation.
Is ever going to go away, you have to put out of [00:05:30] your mind. In other words, constantly asking yourself, regularly checking in. I recommend every 90 days and asking yourself, have we become 10% more valuable? 5% are we keeping up? At least with inflation helps you to really set your mind for what it actually means to be a business owner.
There really never is a moment where a business can stop. Progressing. There never is a moment of I've arrived or I've made it [00:06:00] because there is always this external pressure, a real actual measurable pressure called inflation that is constantly acting on your business. So what does this mean for us?
First, let's talk about the inflation that's going on right now. The most simple advice that I can give you is as follows. One, one of the fastest ways to increase the value that your business is currently creating, right? To be able to beat that 10% decrease. I know it's 8.5, but I'm just gonna use 10% [00:06:30] because I think that's where we're headed.
And 10% is just easier to think about 10% decrease in value over the past year. One of the easiest ways to combat that is to simply become more efficient. So interestingly, one of the best ways you can combat inflation as a business owner, in other words, to make your company more valuable, is to nurture the winners and coal or cut the losers.
So taking a very simple look at your business today or this week and saying, what are the best, most effective [00:07:00] ways that I am currently generating leads? And what are the least effective, most time-wasting ways that I'm generating leads. You keep the winners, you nurture them, and you coal or cut the losers.
Now this seems so simple, but really think about what it is that you've just done in that action. You have become more efficient. In other words, the time, energy, and resources, whether it's yours or your team's time, energy, and resources that you are devoting to a single thing becomes what? What's another way for saying more efficient [00:07:30] in the world of business, more valuable?
The effort you are putting into your lead generation has now increased in value in a very real, measurable way, so that. When it comes to lead generation, that's something you can do. Taking a look at your clients, who are your most valuable clients? Who are the ones who are bringing you the biggest returns?
Who are your best buyers? Who are the people you enjoy working with, et cetera. And then on the flip of that, who are your worst [00:08:00] clients? Who are the people that are wasting your time? What are the offers in your business that we measured in more than just the revenue that's generated, but also the cost to fulfill.
The for example, the time to close, right? If you have really long sales cycles on certain offers, they may not actually be worth running at this particular stage of your business, depending on how your cash flow is measured out, et cetera, et cetera. So just going through and saying, what are our winners and that we're gonna keep and nurture, and what are the things that we're gonna cut from what we're doing?
[00:08:30] That in and of itself can make you more efficient. More efficient equals more valuable. More valuable equals more beating inflation now or in the future. Another thing you can do in thinking about beating inflation and increasing efficiency to increase value. Very simple. Simply extract more yield from your current assets, so extract more yield from your current assets.
What does that mean? First off, you have to understand what assets exist in your business. If you don't have any assets, then it's gonna be difficult to [00:09:00] extract anything from them, right? That sounds so simple, but business is simple. It's very common sense. It's very straightforward. So ask yourself, for example.
What assets are actually bringing in leads, right? So one of the things that we do at Peaceful Profits, we help people to generate customers by helping them to create acquisition funnels, right? And by doing that's an asset. It's not a marketing campaign, it's not a promotion, it's an actual asset.
It's something that a business can own, can flip on and off. It should be able to self sustain itself and et cetera, et cetera, et cetera. All the other [00:09:30] podcast episodes we've talked about that. So taking a look at what is the current yield on that particular asset? For example, how many new customers is it bringing us per day?
How many calls is it booking for us today? And asking a very simple question. It is a question that, especially in the internet marketing space, is just not asked enough, and it is from my current assets for the things that are currently working, how can I extract more yield? Now, again, this may seem obvious, but let me tell you what probably happens more often [00:10:00] than not.
Instead of people saying, from my current assets, what can I extract more yield from? They say, what's a new thing I can do? What's the bright shiny object I can jump to? What is the faster, better, sexier way that so and so told me is the new, bright, shiny, et cetera, et cetera. Now, if you think that jumping from thing to thing is efficient.
I would highly recommend that you sit down and measure that shiny object syndrome in your life [00:10:30] to ask yourself how efficient has that actually been? And if you're honest with yourself I'm guessing all the pen betting, all the pennies in my pocket, that it's not been very efficient at all. And that's because the efficiency comes from assets that exist.
And extracting higher yield from them. I'll give you a very simple example. If you have a call funnel of any kind, it doesn't matter to me. VSL, webinar Acquisition funnel, the cold outreach, it doesn't matter to me. One [00:11:00] very simple thing you can do. For example, in today's world, you've seen these offers all over the place, just.
Inserting an appointment setter to follow up with customers, to follow up with people who watch the VSL to follow up with people who watch the whatever, got your lead magnet or whatever. Just installing some kind of more efficient follow up process to an asset that currently exists will allow you to beat inflation.
Because you will have taken this thing. And so rather than going through the very inefficient process of starting over from [00:11:30] scratch, that already exists. You already know the baseline. You already know what has worked in the past. You already know your costs. You already know your CPA, you already know the LTV off the back of the thing that you're doing, and then you just add someone or something can be a software.
There's a hundred different ways to do this, to get more set appointments from whatever the thing is that exists. Now, I have to put a little caveat here. One, because I'm biased towards it, and two, because this is also true. If you have zero assets in your business, then it simply means that you that the [00:12:00] burden of beating inflation, this external force that is always working against you as a business owner, the burden of that falls entirely on your shoulders.
And your efforts, and unfortunately, inflation is a never ending. I like, just think of it as a universal. Guarantee or a universal momentum or power that will always outlast you. It never rests. It's always happening. There are big machines [00:12:30] and mechanisms and players and people involved in it continuing and et cetera.
So my recommendation is that if you're going to compete against a machine. Which we call inflation. You should build a machine to compete against the machine rather than trying to do it all yourself. And that is reason number 1, 9 7 6 4 7 5. Why I recommend creating acquisition assets. They're simply machines that you instill to have leads coming into your business as customers and et cetera, et cetera.
And the third and final one that we're gonna talk about in this episode and [00:13:00] how to be inflation is simply to raise your price. It's raising your price. 10% over a year is a very realistic, very reasonable, very logical, very smart way to combat the fact that in the past year, your pricing has been 10% off what it should have been.
Okay. Now again, we could have a whole five episodes on [00:13:30] pricing. My recommendation is to price twice what inflation is giving you. So if inflation is going up 10%, my recommendation is to increase your price by 20%. Now, the real secret here is that you don't necessarily have to just say, for example, you have a high ticket offer, increase your price by 200 bucks.
You can also increase. Quote, unquote price, which we're really talking about is revenue collected per transaction, or per customer or per client. Lots of different ways to measure it, depending on [00:14:00] where you're trying to measure in your business, but you can also simply add additional offers. In my book, in my world, when I'm thinking of pricing as a tool to combat inflation, what I'm really thinking about is the average revenue generated per person.
In my world, that is what I'm looking to increase. Oftentimes, the easiest way to do that is simply, bump up your prices by 10 or 20%. Very simple to do, but it's not the only way. You can, in fact, just [00:14:30] add other offers. So for example, when somebody is buying your high ticket program. Asking them a very simple question of, would you, since you're buying this thing, would you also like to buy X?
And that in and of itself can help you to again combat this great machine called inflation, which is actively working to make your efforts less valuable every single day. So these are just some ideas. Really what I wanted to share with you is one, don't be afraid. There are so many things. These are just three things [00:15:00] we talked about very briefly.
Each one of those we could have gone into 45 minutes or longer, right? And there's even more than these three things. You have so many tools as a business owner. To be honest, I recommend taking a moment to feel some of that gratitude because inflation is very real for people who are employed by others who don't have the ability to change their actual income situation in the same way that you do.
So practicing a little bit of gratitude. Also, I [00:15:30] have found helps with some of the fear and the anxiety, et cetera, so you don't need to be feeling fear and anxiety and second inflation's never going away. Okay it right now, it's a big focus. Everyone's worried about it. Everyone's thinking about it, but it's not never going to be there.
Okay? So getting used to dealing with it is a good long-term strategy. If sustainability is. Any part of your desire for your business, if you wanna do this business for 5, 10, 15, 20 years, you need to develop the mindset that [00:16:00] you don't actually have competition from the market. The market itself, the market forces themselves that create inflation.
That is the competition. So you are fighting against that, not your fellow sellers of similar products and et cetera. You are fighting against the market forces and when you can really realign yourself to that, at the end of the day, what you really find out is that you're really the biggest competition is yourself.
Can you beat your performance from last year? And that kind of thinking will allow you [00:16:30] to help really guide where you should put your emphasis and focus and how to get yourself to where you want to go. So that's it my dear friends. Here's my shameless plug for today's episode. If you would like us to help you to build an asset an asset that you can turn on.
An asset that should be able to cover itself, an asset that you can focus on and increase the yield from over time and work on it while it continues to work for you and all that stuff that we talked about. Give us a call at [00:17:00] peacefulprofits.com/call. We'd love to hear from you. We've all sorts of different ways we can help you do it yourself, done for you coaching, implementation programs, et cetera.
Alright, my dear friends, that's it, and we'll talk to you later.