Many entrepreneurs set out to build a successful business and reap the rewards of hard work. Some succeed, and others fail. People who follow have likely used a framework, a blueprint, or a method to achieve their goals, either intentionally or not. Anyone can learn how to build a sustainable and successful business. A tried-and-true method will save you time and reduce the chance of making mistakes. Every business error has been made before, so it is good to learn from others’ mistakes and not make them yourself.
Alex Hormozi, an entrepreneur and investor, specializes in acquisitions and monetization. The book $100M offers: How to make people feel stupid saying no is his first book. It focuses on scaling up your business. Hormozi’s process was adapted to a licensing model, which has allowed him to scale his business to more than 4000 locations in just four years. He also founded and mounted three different companies to $120million in cumulative sales across software and service and brick-and-mortar industries. He became a CEO and co-founded Acquisition.com in 2020 with Leila Hormozi. Acquisition.com generates over $100 million annually in cumulative sales across four sectors.
Interviewed Hormozi to learn his four secrets for scaling up your business.
Picking the right niche
While many entrepreneurs begin by following their passions, picking the right niche can be difficult. Your business will not find the right place, and it will be challenging to sell products. Hormozi examines every company to determine if it is worth investigating. He also looks at whether the business’s value provides to its end users and if there are ways to increase its appeal and profitability.
Hormozi suggested that you look at the best players in your field and assess how they appeal to their consumers. What language, branding and demographics do they use to grab the consumers’ attention and drive sales? It is not necessary to innovate the wheel.
Hormozi suggests that you ensure your product or service fits the niche in which it is being sold. You should examine all the processes in your company and ask yourself, “How can I make them more efficient?” Is there a normal way to accomplish this task? Hormozi says that efficiency is often overlooked. Finding the right niche is key to making money.
Increasing your pricing power
To create a business that scales, your customer must set the same value as you for your product. Hormozi explained that while you might believe your product is worth $500, the consumer buying it values it at $100, which will not make sales. Sometimes, the perception of the value that a product provides to consumers can be more important than the product itself. “It’s all about the different lenses and layers that the company offers without having to modify the product.” Pricing power is about finding the right price for a product, including a premium, while still satisfying the client.
Hormozi explained that the prospect’s pain would be proportional to the price they are willing to pay. Hormozi stated that a prospect must have a problem to solve to charge money. He suggested that you run tests at different price points and get feedback from consumers. This will allow you to discover what is working for other people in your niche.
Enhancing Your Offer
Your product or service’s enhancers are the benefits, scarcity, and urgency it brings to the market. Hormozi warned that businesses often try to combine or mix all the enhancers in one product. However, there are vast differences between each enhancer. Scarcity refers to quantity. A consumer who feels an excess of your product will shop around for the best price. Or, they might feel they can buy it later. Hormozi stated that if a new pair of shoes hit the market, but there is a limited supply, this makes people feel better about missing out on the opportunity to own them in the future. No matter what product you sell, you want your buyer to feel that they may miss out on the future if they don’t buy it soon.
Guarantees and bonuses make the client feel special and confident about their purchase. You can be sure that you will be satisfied if the product has a satisfaction guarantee. Clients feel secure and confident when they invest in your product or company. Urgency refers to customers who feel they have limited time or need to act quickly to reap the rewards. A sense of urgency can help you grow your business and encourage quick sales. Hormozi said, “Perhaps this means that you, as a gym owner, need to remind everyone that summer is approaching so you need to get your membership started before summer vacation.”
Choosing the correct name
Hormozi says that choosing the right name is essential for starting a business or scaling it to become profitable. Naming products, promotions, and your entire brand is crucial because this will influence a consumer’s perception of your brand. You can increase the likelihood of conversion by simply changing the name for a promotion to make it memorable. This is the power of an excellent reputation.
Hormozi’s product titles include Alpha Pak Stack (Gym Launch), Gym Launch, and Done For Your Meals. He stressed that a memorable name must be catchy and easy to remember. There are many process to do this, including alliteration or a rhyming scheme. What are your methods of naming products and offers? Could they be reimagined or changed?
Alex Alex Hormozi went from being a sleeper on the first floor of his gym to becoming a multimillionaire by perfecting these steps and then expanding from there. Choose the right niche to optimize your business, increase customer value, create sales enhancers, and choose catchy names for products and promotions. These four steps will support you create a sustainable empire that can scale your business.