This month, I celebrate my 10th anniversary of being an entrepreneur and business owner. It’s hard to believe that time has flown by so quickly. This has been the longest job that I’ve ever held in my working life. It is also the very best job that I’ve ever had. I’ve learned so much about myself, about selling and serving, about building a brand, and about creating intellectual property. But mostly I’ve learn gobs about what it takes to build and run a successful business – perhaps the most important lesson of all!
In my 9th year in business, I hired a business coach – Mr. Mark LeBlanc of Small Business Success. Yes, even the coach needs a coach! This was one of the smartest business investments that I have made to date. Too bad I waited so long to get a coach. But I’m making up for lost time….
In a recent coaching session, Mark was helping me to better understand my menu of services. He wanted to identify any gaps and overlaps that might currently exist in my services portfolio. Like many business owners, I can be pretty leery and resistant to the need to disrupt the default in my business practices. Sometimes it takes an objective outsider to help you see what you cannot see.
In effort to open up my mind to new ways of thinking, Mark created a playful analogy of a cupcake. He asked me, “Imagine your menu of services is like a cupcake.” He went on to explain that the cake represents the largest portion of your business (sales or profits), the frosting is the next largest, the sprinkles represent a smaller portion of your business, but they create excitement and buyer interest, and of course, the cherry on top is your client attraction. Few people actually eat the cherry, but they all notice it, and are drawn to it.
BINGO! I was on board. I suddenly got it. The light bulb went on. I could articulate my business offering in a much more focused way. I have used the “cupcake strategy” in my mastermind group, in networking situations, and with clients. It’s an easy “back of the napkin” presentation and people get it quickly.
What are the benefits of knowing your cupcake strategy?
The cupcake strategy is a creative, mind opening, marketing exercise. It’s a way of looking at your business differently. It can help business owners and professionals to better understand what’s most important about their professional offering, whether its B2B products/services, or your employment skills/talents.
I have used the cupcake metaphor to help my strategic partners refer clients to me because they now know more clearly what business I seek and where my expertise lies. The cupcake strategy cuts through all the gobbledygook and blah-blah-blah. It’s a powerful visual tool that can work for you too.
How to create your own cupcake strategy for your business
Your cake. Make no mistake that the cake in your cupcake is the major foundation. Without the cake, all you have is a pile of frosting and sugary sprinkles. The “cake” aspect of your business may not be that sexy, but it is the main driver of your profits. To use another food metaphor, it’s your bread and butter. It sustains you. Never disregard your cake.
To figure out what the “cake” is in your business, look at your P&L or go to your QuickBooks for the prior fiscal year or latest rolling 12 months. Answer these questions:
- What’s your primary profit center?
- Where do you make the most money?
- What “flavors” does it come in? Think menus of services or core offerings.
Your frosting. Everyone loves frosting (especially if you’re a kid at heart), and they will pay for it, too. It makes things sweeter, but you can’t eat too much of it or you’ll get sick to your stomach. There are many different kinds of frosting (or products/service) and it tends to be more visible than the cake part (which lies hidden under the cake liner).
To figure out what the “frosting” is in your business, answer these questions:
- What’s your 2nd highest profit center?
- What “flavors” does it come in? What subcategories do you offer within this group?
Your sprinkles. Sprinkles can turn an ordinary cupcake into something irresistible. People are drawn to decoration. Sometimes they’ll eat them, other times they will discard them. But without the sprinkles, they may not notice your business. And they’ll pay extra for the sprinkles and adornments. These little extras add more value to your core proposition, but the sprinkles themselves can’t pay the rent or make payroll. They rely on the frosting and the cake to hold them up.
To figure out what the “sprinkles’ in your business are, answer these questions:
- What’s your 3rd highest profit center?
- What do customers request of you often, but they don’t pay you a lot of money for, however, it can lead to more cake and frosting opportunities?
Your cherry on top. The cherry on top is a metaphor for your client attractor – the WOW factor in your business and/or brand. Personally, I don’t eat commercially produced maraschino cherries (after reading the ingredients in them). Yet, I still like them. I am drawn to the visual allure of a cherry on top. It’s the finishing touch. It calls to you – pick me! People rarely just buy the cherry on top, but it’s a compelling part of why they love you and want to buy your products/services/and expertise.
To understand the cherry on top in your business, answer these questions:
- What attracts clients to you?
- How are you visible and valuable to them?
- How do you stay “front of mind” with them?
What’s my cupcake strategy? After reflecting on the above questions, reviewing my own financial data, and considering what business I’m REALLY in, I have created a pictorial of what I believe my cupcake strategy is. I took the time to color it in….just for fun! Does your cupcake strategy change over time? Absolutely! But it must be data driven. You must know your numbers and let those ground you in strategy. You have to be honest with yourself about what’s really selling, where you make your money, what your clients want/need, and how well you are are positioned to meet that need. You must resist chasing, out of desperation, every opportunity that comes near you. You cannot be all cupcakes to all things!
This exercise has helped me to see the strengths and weaknesses in my own services/products portfolio. It has given me food for thought about my pricing strategy on some of my products. And it has helped me to more clearly articulate to myself and to others what business I’m really in. It has also helped me understand and pursue the type of new business that will help me grow my business.
What business do you want to attract?
Download this simple Exercise – Cupcake Strategy to Grow Your Business to help you create a cupcake strategy for your business. Color it in for fun. Note: if you don’t like the shape/style of the cupcake illustrations, go find one that thrills you. After all, this is YOUR cupcake (or business) and you want it to be unique and deliciously profitable!
Need help growing your business?
If you need help starting or growing your business, please contact me to discuss working with you as your business coach at 860.408-0033 or email: Kathy@AmericasMarketingMotivator.com