How do you know if your product or service is still fit for purpose?
To judge whether your offering will get you to your three-year plan, be honest about each product: score it out of ten, and ask what would take it to a ten, whether by tweaking it or launching something new. Then get deliberate about pricing and the financial metrics behind it, because product and price feed straight into your ultimate financial outcome.
How do you honestly assess your current offering?
Be honest, and a simple exercise forces it: score each product or service out of ten. It’s revealing how often one person says seven and a half while another says three, which is exactly the conversation you need. Even a seven and a half means something could be better, so ask what would take it to a ten over the next one to three years. Can you tweak it, or is it getting tired and better replaced with something new? Apple is the model here: they kept asking what consumers would need next, shrinking the iPod, then launching the iPhone and iPad, all built on close observation of changing consumer needs. The same discipline applies to a professional-services offering. Constantly test whether each product is genuinely fit for purpose for where you’re heading, not just where you’ve been.
How should you think about pricing your products?
More confidently than most businesses do, because pricing is where a lot of margin is left on the table. In Australia especially, we agonise over whether a 5% rise will scare clients off, and we rarely experiment. Professional-services firms are the worst for it, often giving away strategy to win the delivery work. The fix is simply to charge for it once: tell the client the thinking will take two and a half days and costs this much, and once they buy it, your confidence jumps. For consumer goods, pricing is a fine-tuned dance against competitors, so you need to know exactly where you sit. Either way, treat pricing as a deliberate lever in the plan: how do you optimise your margins and your sales through the pricing choices available to you, rather than leaving price as an afterthought?
What financial metrics matter beyond profit and loss?
More than the once-a-year profit and loss most people glance at. Modern tools like Xero, QuickBooks or MYOB make a P&L easy to pull, but the metrics that matter include revenue growth, margin growth and cash flow. A useful rule of thumb is the 60/20/20 rule: once you know your gross margin (the money left to run the business), aim to spend no more than 60% of it on people and around 20% on overheads, which leaves a 20% profit margin. Cash flow is just as critical: pulling debtor days in by a couple and pushing creditor days out by a couple can quietly unlock five to seven days of extra cash to fund stock or a one-off cost. Beyond that sit capital requirements and bigger questions, like whether you’re setting the business up to sell, merge or acquire.
How 24HRBP approaches this
In a 24 Hour Business Plan session we stress-test your product and pricing and connect them to the financial outcome, using metrics like the 60/20/20 rule and cash-flow levers. The point is to make sure the offering and its pricing can actually deliver the numbers your plan depends on.
Watch the full episode on The 24HR Business Plan Podcast: Episode 11 - Reviewing and Developing Your Product or Service Offering
