How can you make money by starting a business in 2024?

The environment changes every year, and the corresponding methods also need to be updated. In this special environment of 2024, how can entrepreneurs make money? Let's take a look at what the author has to say.

Nowadays, people say that business is difficult, there are no customers, no profits, and no money to be made.

If you want to make money in 2024, you need to do well in the following aspects.

① Reduce costs and save expenses

② Increase profits

③ Improve customer satisfaction

④ Don’t be blindly optimistic or start a business blindly

1. Reduce costs

Reducing costs means reducing the company's costs.

Costs are divided into fixed costs and variable costs.

Convert fixed costs into variable costs

What are fixed costs?

Fixed costs are the costs you must spend every month to keep your business running.

For example, rent, employee wages, product purchase costs, etc.

What is variable cost?

It is a cost that is proportional to your business volume. The larger the business volume, the higher the variable cost will be. For example, transaction costs, sales commissions, etc.

If a company's fixed costs account for too high a proportion, then it will face great risks.

For example, like in the previous epidemic, there was a sudden loss of income. If the company’s fixed costs were particularly high, it would be difficult to sustain it for long.

Therefore, in order to enhance the company's ability to resist risks, fixed costs can be converted into variable costs.

That is, some business can be outsourced to reduce costs and increase profits.

This is also what we often say, just do what you are most professional at.

The most important thing to reduce costs is asset-light operation. You can look at your own cost structure to see which parts can be cut and which parts can be outsourced, and do it lightly.

The principle of lean entrepreneurship is that costs should be low, the lower the better.

2. Increase Profits

While reducing costs, we must also improve performance, so that profits will increase.

If you want to increase your performance dramatically and make more money, you need to create a performance growth model.

Performance growth is inseparable from three factors: number of customers, transaction amount, and number of transactions.

If you want to increase your performance, you must improve at least one of the above, either increase the number of customers you complete transactions with, increase the transaction amount, or increase the number of transactions.

Assume that the number of successful customers is 10, the transaction amount is 200, and the number of transactions is 2. 10×200×2=4000, the performance is 4000

• Assume the number of customers doubles, and other things remain unchanged. 20×200×2=8000, the sales volume is 8000
• Assume the transaction amount doubles, and other things remain unchanged. 10×400×2=8000, the performance is 8000
• Assume the number of transactions doubles, and other things remain unchanged. 10×200×4=8000, the performance is 8000

You see, as long as one of the factors is doubled, the overall performance will double.

What if two of these factors double?

• Assuming the number of customers doubles, the number of transactions doubles, and the transaction amount remains unchanged, 20×200×4=16,000, the performance will become 16,000
• What if all three factors double? 20×400×4=32,000, the performance becomes 32,000

Have you noticed that if you improve one of the three factors, your performance will double, if you improve two, your performance will double, and if you improve all three, your performance will grow explosively.

So if you want to increase your performance, you can do it by planning the above three elements.

1. Increase the number of successful customers

Number of closed customers = number of potential customers × conversion rate

Therefore, in order to increase the number of closed customers, we must increase the number of potential customers and improve the conversion rate.

2. Increase transaction amount

How to increase the purchase amount and get customers to spend more?

Combine consumption, follow-up sales, lock in customers, increase average order value, etc.

You can also design plans for discounts and gifts for purchases over a certain amount, as well as follow-up sales plans, to encourage customers to continue spending higher amounts.

You can also design a price-value ladder, where the higher the price, the higher the value, allowing customers to climb up the value ladder.

Each step provides customers with value beyond their expectations, and customers will climb up the value ladder you design.

3. Increase the number of transactions

Increasing the number of transactions means increasing the number of purchases and repurchases, allowing more customers to consume and allowing customers to consume continuously.

New customer turnover = number of potential customers × conversion rate

Repeat purchase volume of old customers = number of old customers × repeat purchase rate

Improve conversion rate and repurchase rate according to these two formulas.

Be sure to list all the ways to increase the number of customers, increase customer transaction amounts, and increase customer purchase frequency.

Performance = number of potential customers × average order value × conversion rate × number of repeat purchases

If you want to improve your performance, you need to improve the above points and develop a performance growth strategy.

3. Improve customer satisfaction

Provide customers with better service, experience and products.

If you want to do a project well and develop it in the long term, you must first respect, know, and understand users, and then pay attention to: user service, user experience, user reputation, user interaction, user relationships, and provide practical value, functional value, user emotional value, and user emotional value.

Moreover, the middle class is now increasingly pursuing cost-effectiveness and wants to buy better products with the least money. This is also caused by the economic downturn and the general environment. For the middle class, there is less and less available money, so pursuing cost-effectiveness is a trend.

This is a big test for companies, that is, how to provide customers with better products at a lower price without losing money, and even while increasing profit margins. This requires companies to reduce operating costs and improve operating efficiency.

4. Don’t be blindly optimistic or start a business blindly

Ordinary people who want to start a business lack entrepreneurial experience and do not have much money, so they should try to reduce mistakes as much as possible, learn from others' failed experiences, and then do the right thing in the right direction with the right method.

Success is not about how much you do right, but about minimizing mistakes.

Various success stories are not of much reference value to most ordinary people.

However, failure cases are worth our reflection, and because of their strong versatility, eliminating wrong paths from thousands of paths can increase the success rate.

For most people, it is difficult to avoid pitfalls, so the focus should be on minimizing the number of pitfalls and making each pitfall less painful.

Most people have very few resources to use, and the cost of trial and error is relatively high.

Most of the time, there may only be one chance for trial and error. If you fail, you may have to work to pay off your debts and dare not start a business easily again. Moreover, the cost of trial and error is very high. You may have to spend all or most of your assets, or even borrow money. It may take several years to recover from a failure.

① When we do something, we must first have a direction, strategy, method, and tactics, and know how to do it.

② After you have determined your idea, you must be determined to execute and act. Don’t waver in direction or work for three days and rest for two days. You must be determined to do it.

③ And the process of doing it is constantly optimizing, reflecting, reviewing, and improving.

④ We need to keep learning and improving our cognition. People’s behavior and thoughts are all affected by their cognition. What you do and what methods you use are because you know what methods there are, because you understand and know these. But in fact, there are many things we don’t know, so we need to constantly improve our cognition so that we can understand and know more.

⑤ Be flexible. In many cases, don’t stick to the same method. If a method doesn’t work, you need to change your methods and thinking. Seek advice and ask for advice from excellent and trustworthy people. Also, know how to search for relevant information on the Internet and use it.

⑥ You must also know how to stop losses in time. If you feel that you are not doing well, and you are not getting positive feedback for a long time, and you have looked at the development of your peers, others, and the entire industry, if it is not going well, then stop losses in time. Don't be reluctant to give up the costs you have invested before. Sunk costs are not costs. If you insist on meaningless things, you may need to invest more time, energy, money, material resources, and manpower.

Author: Lao Chen, WeChat public account: Lao Chen's Deep Thinking