Every business goes through revenue dips, irrespective of industry and size. In the case of solo and micro businesses, though, these dips can have a bigger impact, so it’s important to address them head-on.
Can you avoid them altogether?
No, not really. You can postpone them in some cases but sooner or later you will have to deal with a drop in revenue.
Why?
For a variety of reasons:
- Seasonality: the B2B sector slows down during summer, for instance.
- Market saturation: when more companies fight over the same slice of market, revenue and growth drop for all of them (typically).
- Trends and major industry changes: AI is a good example here. My copywriting agency was affected by AI, as were the businesses of all my friends in this space.
- Economic factors: when the economy is bad, people give up on nice-to-have products and stick to basic needs for the most part. If you sell a nice-to-have product/service, you will be affected by the fluctuations of the economy.
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These are just a few of the factors that can affect your revenue. I listed them so you can see that all of them are out of your control.
The way you react to them and the way you deal with revenue dips are not out of your control, though. So let’s dig into that:
Before the revenue dip: build your war chest
Common advice says to make sure your war chest can cover your expenses for at least six months. I’d add another six to it.
Confession time: 2023 was my worst year in business. AI hit my agency hard. We lost clients overnight and, with me focusing on this newsletter and a new business, client acquisition was not my priority.
The dip was bigger than I expected. I won’t lie to you; it wasn’t easy. However, I did not act out of desperation because I knew my expenses were covered for another 18 months.
This allowed me to be strategic and keep growing my new business. Better yet, I did not onboard any client that came my way because I was not desperate.
Allow yourself to be selective with the clients you take on, no matter what. Build your war chest before you see a revenue dip coming your way.
This will also prevent you from making rash decisions, like pivoting too quickly in a new direction that seems profitable.
Start with your old clients: can you work with them again?
If you’re a service provider who’s been at it for a few years, you probably have a few (dozen) contacts of people you used to work with but stopped at some point.
Unless you stopped working with them because one of you was unhappy with the other, this is your best bet. Your former clients already know you and trust you.
Even if you stopped working together at some point, their circumstances could be different now, so it’s worth a shot.
Create an upsell/cross-sell offer
If you sell digital products, the easiest way to make money quickly is to upsell or cross-sell to an existing client. It’s five times cheaper to sell to an existing client than to acquire a new one.
Consider the following:
- Do you have something in your product stack that a former client could benefit from? For instance, if your client bought an SEO course from you, they would probably benefit from a copywriting course too.
- Can you create something new from scratch relatively fast? It can be a bundle of your existing materials (spreadsheets, worksheets, how-to videos, and more) or something completely new, like a course.
Reach out to your peers and partners
Two weeks ago, I wrote about building an army of partners and peers who can promote your content and your offers. Do you have that army (or at least a division) in place? If so, reach out to them:
- Ask them for referrals
- Invite them to be your affiliates
- Simply ask for advice — you’ll be amazed at what an outsider’s perspective can do for you.
No army to speak of yet? Now is the perfect time to start building it!
Run discounts — but BEWARE of overdoing it
Discounts are tricky and I recommend using them sparingly. BTW, the playbook on how to create discounts people can’t refuse is here.
If and only if you need a quick cash injection, run discounts across all your products and services. But beware that this is not ideal — it will cheapen your brand if you overdo it i.e. if you do it too often or if you run huge discounts (over 50%).
Use this as a last resort only.
Services are the fastest way to make money
If your internet bubble is anything like mine, you’ve probably seen people diss services. “Stop trading your time for money and build digital products instead”, they say.
Forget the fact that digital products need to be sold, so you will invest time in them as well. When you need money FAST, services are your best bet.
People will always pay more (and faster) for you to solve their problem than for you to teach them how to solve it. DFY (Done For You) trumps DIY (Do It Yourself) in terms of pricing and potential revenue — always!
Work on growing your audience
One of the most common problems I see in solo businesses is audience size. Sooner or later, you will have reached the end of your audience — everyone has seen your offer and those with an interest in it bought. The others won’t buy, no matter how many emails you send them or how many discounts you run.
A larger audience gives you more wiggle room. Any of the strategies above works better if you have a larger audience — provided it’s relevant too, not just bulky!
Ask yourself this: assuming an average conversion rate of 0.3%* across your channels, how many products/offers can you sell to your audience? Enough to keep you floating?
*Count people you can actually reach, not your entire audience, i.e.: your open rate, not your total number of subscribers.
If you don’t like the answer, it’s time to build your audience before you need it.
Shameless plug: my course, Audience Accelerator, will teach you how to build an audience you can depend on. We’re not just bulking up your numbers, we’re targeting relevant audiences, the kind that turn revenue dips around. Get instant access to Audience Accelerator here.
Embrace quiet periods, they don’t always spell doom and gloom
Seasoned entrepreneurs know this: plateaus and dips are normal. They don’t dread them, they embrace them.
Provided you have a war chest, a quieter season is the perfect time to lay low and work on:
- Your processes — what can you improve or automate?
- Your offers — can you build something new or refine an existing offer?
- Your audience — is it time to expand on a new channel? How can you use existing channels to grow your audience?
- Partnerships and cross-promos — find people to collaborate with and cross-promote each other.
There are two types of growth: more and better. The first one brings you more revenue, the second one makes revenue generation easier.
You need both! So use quiet times to work on your better.
That’s it from me today.
See you next week in your inbox.
Here to make you think,
Adriana
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