Be Like Elon & Charge HIGH Prices π
Elon shared his 10 year plan from 2016. Itβs interesting to see step 1 of his plan to start Tesla. His strategy should be a lesson for us. Here is his plan: Step 1 - Create a low volume EXPENSIVE car. Step 2 - Use the money he made from step 1 to develop medium volume car at a lower price. Step 3 - Take the money from the previous steps to create an affordable, high volume car. Affordable and high volume come LASTβ¦ NOT FIRST! It seems counterintuitive to start with the expensive thing first, but that exactly what he did. The reason he gave was because that was all he could afford to do. When you are first starting out you donβt have the resources to hire staff or do much of anything, so you have to do low volume at high prices just to survive and have any chance of getting your clients results. Itβs tempting to think you should charge lower prices when you are first starting out with your business, but that is the WRONG way to think. Everything will be harder for you if you charge low prices. Chances are if you start off charging low prices youβll NEVER make it. Imagine if you only charged $297 per month for your SAAS offer. Just to get to $10k per month you will need 33.6 clients. Getting one client is challenging enough. [Iβm not sure where youβll find .6 of a person π§ β¦thatβs a joke π€·ββοΈ] The chances of you getting 33 when you are new at this, is close to ZERO. Most SAAS agencies never get that many. You wonβt have enough margins to spend money on ads, so youβll have to find some other way to do it. Even if you do somehow defy the odd, youβll spend all of your time servicing those 33 clients that youβll have to get help, which you wonβt be able to afford because youβre only making $10k per month. Your clients wonβt get the attention they need, so youβll have constant churn. (Iβm getting stressed just thinking about it. π) If you charge high ticket prices you only need 1 or 2 clients per month and you will have enough margin to acquire customers with ads and hire help if you need it.