You have created a great new product. You approach professional athletes. They try it. They all love it. Yay! It’s awesome. Best thing ever. You approach other riders. You give them samples. They also love it. Yay! It’s awesome. On social media you’re all “Look, so and so uses our thing and loves it!” #bestthingever. You start sponsoring shows, sponsoring riders, you’re on your way to success. Meanwhile, you haven’t sold many.
Same thing for services. When you give your work away free of charge, you’re establishing the market price at zero dollars. It’s a huge challenge to turn that into revenue. Just look at the newspaper business to see how much of a struggle that is.
Side note: I’m not talking about hobbyists here. There’s a difference between a hair stylist who loves to bake and gives cupcakes away, and a professional baker who aims to grow a cupcake business. We’re discussing the latter.
What should you do instead?
1. Establish a strategy consistent with your branding.
If you offer a premium product or service, your pricing structure needs to reflect that. Your sponsorships or partnerships also need to be very limited. Invest in a strong marketing and branding campaign with beautiful photography and design. Partner with other brands or people that reflect the image you are trying to project. It’s perfectly fine to offer an introductory discount or a deal when you’re starting out but make sure to list the real price on the invoice and deduct the discount rather than simply invoice for the discounted amount. You can read more about pricing strategy here.
2. Keep an eye on cost vs return.
If you sell $4 hoof picks that cost you $0.25 to make, if you give away 300 and are able to generate sales of 1,000 units as a result, you’ve made a $3,675 profit. If you’re a photographer and do a free photoshoot (let’s assume your direct costs are $50 and your regular rate is $300), that one shoot needs to lead to 15 more to generate that same profit. Keep your eye on the numbers and make sure the actions you invest in are worth it.
3. Don’t get blinded by love.
Entrepreneurs tend to be passionate folks. We fall in love with our company, with our products, and are really flattered when people love what we do. Especially in the equestrian industry, we work with horses (love them!) and athletes we admire and often, those warm fuzzy feelings cloud our judgement. I’ve seen a lot of people start businesses in the equestrian industry because they love horses – which is totally fine, follow your passion – but they don’t have a clue about what it takes to run a business. To be successful, you need to love your work but also love ‘business’. Take care of the bottom line. Don’t do it for the money, but the money is what allows you to do it.