How To Figure Out Your Profit Per X
Moving straight on to the third circle of the hedgehog concept, the profit circle, or the profitper-X, as Jim Collins talks about inside his book Good to Great, this particular circle,
concept, or part of the theory is just as important – maybe even slightly more important
than the first two. The Hedgehog Concept For Helping You Find Your Niche
And Becoming Super Successful
Of course, itʼs really important to be operating in a niche that youʼre passionate about and
that you have a skill in or that you can develop a really good skill in. But very importantly
also is that you can make some money from it. Whether this is for a business, a charity, or for a political
organization, you will need money somehow to help you achieve
what youʼre trying to achieve online. Of course, with a business
youʼll want to make some money from this. But also with a charity
organization youʼll want to make some money. If you can get the exposure and the attention from people, making
money is going to be easier for you. Similarly, if youʼre a not-forprofit or different organization, maybe like a political group of
people, youʼre going to need money to help you achieve your
purpose. So itʼs a very important aspect of the hedgehog concept.
There are two things to consider in helping you think about the profitability of your niche.
The first thing is that you need enough people inside your niche who would be interested
in your specific topic or specific niche. The second thing is that they need to be able to
spend money with you. They need to have access to money or have money available
somehow that they can spend on things inside your niche. Those two things are key.
If you donʼt have enough people, your chances of being able to get exposure or people
searching for your content on the internet is going to be very limited. In the same way, if
you have a lot of people but they donʼt have any money, itʼs going to be difficult to build
any kind of traction over the long term.
Of course, you can have a small niche where there are people with a lot of money. Thatʼs
a little bit different, and the challenge then becomes reaching those people. If you follow
the steps inside this course, even that shouldnʼt be too much of a problem. You Need Enough People
So letʼs look at the first thing – getting enough people and making sure there are enough
people in your niche. There are three things that you need to think about when you think
about these people in your niche. Iʼm borrowing these ideas from Eben Pagan, who is a
very successful internet marketer but has also shown a lot of success in the dating
industry. He came up with these three things, so credit to Eben Pagan for this. They Need To Have A Pain Or An Irrational Passion
The first thing for these people in your niche is they need to
have a pain or an irrational passion for the stuff that youʼre
talking about for your niche. Not only do you need a lot of people, but you also need
them to have some kind of pain or a problem theyʼre trying
to solve, or they need to be irrationally passionate about the
topic youʼre creating content for or youʼre operating in. This
is critical. The reason for this is when people have this pain or
irrational passion, theyʼre going to be searching for
solutions or for more information on the internet for it. Thatʼs
where you can come in. Thatʼs the opportunity for you. If
they donʼt have a pain or irrational passion, theyʼre going to
be less likely to be searching for that information online.
Thatʼs very important. They Need To Be Actively Searching For Solutions On The Internet
Itʼs no good that they have this pain or this irrational
passion but theyʼre not actually searching for it in on the
internet. They may be looking in other places for it like
offline forums, music groups, or whatever. For whatever
reason, they may not be searching for it online. So you
need to make sure theyʼre actually going online to
search for this kind of information. There Needs To Be Very Few Conceived Options For Solving The
Problem
In other words, and this leads back to competition a little bit, if you can create the
perception that youʼre the only one, or one of the few people in the world who can solve
this problem for these people, that puts you in a really good position. There are many
different ways you can do this, and often itʼs more about perception than anything else. Just because there is a lot of competition in a certain niche or certain area, that doesnʼt
matter too much because you can always present yourself and position yourself in such a
way that you come across as one of the few perceived options. So those are the three things. 1. These people need to have a pain or irrational passion
2. They need to be actively searching for solutions on the internet
3. There needs to be very few perceived solutions for solving the specific problem youʼre
targeting
With those three things, making sure there are enough people, and that those people have
money, I think youʼll be in a very good position to make sure your niche will be profitable. There are a number of things you can do to do a little more research. In one of the lessons
in this series, Iʼll show you what you can do using Googleʼs Keyword Tool to help you
search for keywords in your niche area. That way you can make sure there are enough
people searching for it and making sure there are actually people spending money in that
niche. Iʼll show you how to do that inside another lesson, but I just wanted to cover these
important things for the profit side of your niche, of your hedgehog concept. How Will You Be Making Money From Your Niche
With the other part of this profit-per-X bit, when you think
about your niche, you need to think about how exactly will
you be making money from this. Thatʼs what
Jim Collins talks about. Itʼs not just about
making money, itʼs about measuring also
how youʼre going to be making this money. For example, will you be measuring the
money that you will be making in terms of
number of customers, number of views on
your videos, numbers of visits to your
website, number of products or membership
sites you have, number of staff, number of
hours you work per week? What is it going
to be? Thatʼs something that is a little more refined, but it helps you think about how youʼll be
operating your business to be able to maximize it for that X. In my business, as an example, I could look at my profit-per-visitor to my site. For that, if I
make that my focus, I will do different things compared to if my measurement was profitper-member. If my measurement were profit-per-visitor to my site, I would try to figure out how to create
more products so I could increase the value of each value. Or I would look at how to
increase the conversion process of my sales processes so I could increase that value per
visitor. That way, every time there is a visitor on my site, the more people I get signing up for my
courses, the better. If my profit-per-X is that, thatʼs what Iʼll be focusing on.
Letʼs say my profit-per-X is profit-per-hour of my time that I spend on the business. Then
my focus would be totally different. Instead of thinking about the conversion process of my
website (and I may do that, as well), I would more be looking at how can I outsource as
much work as possible, so an hourʼs worth of my time during the week equates to 10
hours of other people working for me. In other words, the more I look at how I can leverage my time more, the better it is for my
business. That will be my profit-per-X for that particular case. Thatʼs why itʼs important for you to think about your profit-per-X and how thatʼs going to
relate to your business. When you figure that out, it will help you determine what you
should be focusing your time on. It will help you focus even more on how you should
arrange your activities so you can get the best possible outcome for this. So thatʼs it for the profit-per-X part of the hedgehog concept. I really encourage you to
read Jim Collinsʼ book, Good to Great. It really just clarifies this whole thing, even if you
just read the chapter on the hedgehog concept. It will really help you clarify the whole idea
of how this works for both companies and for individuals. Figure out your passion and develop your
skill that is based on that passion. Figure out
whether you can be making money from this.
The three things need to be happening at the
same time and thatʼs why it needs to be a
repetitive thing. You keep coming back to it
and revisiting it, keep honing in and
modifying it, and focus it more and more. As
you go, the more clear things will become. I
promise. Iʼve got a few more lessons about this. In one
of the lessons coming up, Iʼll show you how
you can use Googleʼs Keyword Tool to help
you do a bit more research about your niche,
if there are enough people and will it be
profitable.