Business Strategy May Not Mean What You Think It Does
Updated: Aug 4, 2022
with Julie Sellers, CEO Ellevated Outcomes
It is hard to read the label when you’re inside the bottle. Julie Sellers is the CEO and Business Advisor for Ellevated Outcomes, a strategy service working with creative entrepreneurs and small businesses. Julie shares tips and processes she goes through with her clients to strategize and allocate important resources. She helps her clients look from the outside and increase profitability by seeing the pain points in their products and pricing.
Notes from the Show
Ellevated Outcomes is an outsourced strategy department working with creative entrepreneurs and small businesses. Julie Sellers, the CEO and Business Advisor, specializes in small businesses of about 1 to 10 employees who are bootstrapping their way through business. Their special sauce of strategy works for these businesses with restricted resources because they are able to allocate them where they are most needed.
What is Business Strategy?
Julie defines strategy as how you allocate your scarcest resources to the highest priorities. With her process, Ellevated Outcomes helps businesses get the "bang for their buck".
When working with a new client, they apply their "Future Framework", outlining the business's mission, vision, and operating principles. This allows them to understand the boundaries of a business based on their priorities, what is or isn't on the table. Clients then go through a 5-step Profitability Analysis where they understand what products and services the business should be offering and the correct pricing for that as well as what products and services should be cut and what prices should be changed?
How to Price Your Product and Services?
Julie launched the course, How to Price Your Products and Services, available on demand soon, to educate businesses on this key part of their analysis. The methodology behind this course is based on the research that if you look at your products and customers and break them into quartiles by revenue, the top quartile is going to make up 80% of your revenue. But, if you substitute the word profitability, the top quartile will provide 150% of your profitability. Your bottom quartile is costing your business 50% of your profitability. This concept allows you to clean house, allocate resources such as time, income, and staff into the most effective profitable places.
Julie finds that 80-90% of her clients' problems are directly related to products and pricing and they have no idea. Her business works to get clients off that hamster wheel and working profitably and she shares some tips on how to identify what's happening before you feel the pain. You can find out more about Ellevated Outcomes and their new course on their website.
What does strategy mean in business?
How can you use the future framework to set boundaries in your business strategy?
How are your product, services, and pricing affecting your profitability?
How to make 50% more and work 30% less.
Identifying the pain points in your current business strategy.
Mentioned in this Episode:
Transcribed by AI Susan Tatum 0:37
Hello, and welcome back to stop the noise. I'm Susan Tatum and today I'm talking with Julie Sellers, who is the CEO and business advisor at Ellevated Outcomes. Welcome, Julie.
Julie Sellers 0:50
Thank you. Hi, Susan.
Susan Tatum 0:52
It's nice to have you here. So So you are you bill yourself as a business advisor for creative entrepreneurs and small businesses?
Julie Sellers 1:00
Susan Tatum 1:05
So let's so what, what's a small business to you?
Julie Sellers 1:07
So for us, in our specific business, we define small businesses as one to 10 employees. And the other thing that's distinct about that is we're typically working with businesses who are bootstrapping their business, maybe they have a loan from a bank, but they have, you know, typically traditional funding. And I say that just to say, that's distinct and different from like, a startup environment where you're taking investor money,
Susan Tatum 1:33
right. So that's an interesting distinction. Then you use the term bootstrapping. So it is the resources that your client that uh, that a company like that would have, are likely to be restricted.
Julie Sellers 1:49
That's it. Yeah, that's a more elegant way of saying get restricted. Yeah, absolutely. And, yeah, I mean, that's actually a distinct part of our business and our process. And I think, you know, one of the reasons, both what we do and how we do works really well. So I mean, I might just kind of dive into how we've talked about strategy, and maybe how all that fits together, if that's okay. So we think of ourselves as like an outsourced strategy department for small businesses. And I was taught by a boss many, many years ago, that the definition of strategy is how do you allocate your scarce resources to the highest priorities? So piecing that into what you just said? That those small businesses the way that we define small businesses, yeah, they have really restricted resources. And the reality is, you know, most small businesses just haven't had the experience or the background to really be able to zoom out and understand where they can get more bang for their buck in their business. So we actually thrive in that environment where like, the resources are restricted kind of thinking, like, okay, how can we squeeze more juice out of this lemon or this piece of fruit?
Susan Tatum 3:13
It's an interesting challenge, you do have to get creative with it. And I really like your definition of strategy. And I had someone I was talking to recently had a similar not necessarily a definition, but the way that he thought about strategy was that, you know, often strategy gets sold as I have this framework for doing a strategy and everybody gets the same framework, and it's about how it's about processes kind of where and in his mind, the strip, that strategic part of any consultants, engagement was figuring out where the resources should be put, and what what should be focused on. And that's, that's so true.
Julie Sellers 4:04
Absolutely. Yeah. And one of the things I say is, whether we're talking about business or life, though, life is a bit out of my paygrade, but that we're whether we're talking about business or life, like I don't think anybody should have more than three priorities in anything. If you have more than three priorities. They're not priorities. So kind of building on, you know, that other colleagues definition. I totally agree. So it's about how do we take those restrictive resources and use them to magnify the actual priorities? And of course, that has to start with identifying what their priorities are. And those are different for every single business and every human who is running...
Susan Tatum 4:48
Right. And you know, there's psychological support to that number two, or the number three, to t-o-o that we don't remember we can't we like and whenever you're giving a presentation, I always have been taught three points, if you can get three points across that they remember, than that's really good. So there's just something there about that number. Mm hmm. So what do you what so when you're doing strategy with your clients, where do you start?
Julie Sellers 5:23
So the place that we literally started in The place where we've really kind of started digging into the business, the place that we literally start with every client is we work with them on what we call like a future framework. And basically, we're extracting from that client, their Business's mission, vision values and operating principles. And so to the point of understanding what are the priorities for the business, that kind of starts to set our boundaries. So we know what those priorities are, we know what the goals are, and we know the things that are in play, and not in play, like it's very helpful to kind of eliminate and understand what's not in play, what is not going to be part of our strategy. So that's like the place that we start with every single client. And then the place that we go for most clients. And when I say most, it is 80 to 90% of the time, and that number is creeping up even more and more, is doing what we call our profitability analysis. And so that is essentially understanding what products or services the client should be offering, as opposed to what they are offering, what they should be offering, and what the correct pricing should be. And very frankly, what that turns into most of the time, is quite literally understanding which products and services should be cut, and where prices should be changed for the existing products and services.
Susan Tatum 6:58
So that must get you involved in the target market as well and who their ideal clients are, because it's got to be the two have to be a match right?
Julie Sellers 7:07
It says it does, they're absolutely linked. So, you know, as part of our kind of profit and pricing process, we go through five steps, essentially, and one of the kind of outputs of it is getting a finer sense of who the target market is for the right products and services. So we go through understanding the theory of pricing, right, so that there is a marriage of the art and the science of pricing, setting up a structure to really look at their business and look at the data that they have to segment their products and services. And the customers that they're serving for each of them doing an analysis of that to understand by product line by service line, which of those are actually profitable. I had someone say to me a couple of weeks ago, and I thought this was brilliant. They were like, you know, we have the data, but the data didn't have a job. This is helping us understand what the job of the data should be, from their understanding who the target customers should be for those right products and services we want to focus on, and also evaluating like, Oh, are we trying to move into a different market where maybe, who we thought our target market before was is not necessarily that any longer assigning the right pricing, and then planning the approach of taking that to market and testing, learning and refining? And so to your point, a key piece of that being kind of the openness, some squishy, but like the openness to understand, like, like I said, maybe the target market we thought we had before, isn't the target market that we should be targeting.
Susan Tatum 9:00
So that can be things like size of the company, and therefore your your, your target client, therefore, the their budgets that they have, how much they're willing to invest in, whatever it is your product is that you're offering?
Julie Sellers 9:16
It absolutely could be that and it could be you know, we work with a lot of clients to sell to individual customers as well. So it could be demographic information about the customers, it could be geography, it could be how they perceive value, etc. So certainly what you said on the B2B side of things, and then it translates into B2C as well.
Susan Tatum 9:39
So as you so you do both B2B and B2C?
Julie Sellers 9:44
Susan Tatum 9:45
And you said I think when we talked previously that your clients for the most part when you their creative service, creative services, right?
Julie Sellers 9:56
Susan Tatum 9:56
so is that like, what, like writers, designers, that kind of thing.
Julie Sellers 10:04
So interior designers is a big kind of bucket for us. And then I would also say alongside that, we work with many businesses who I would almost say like service the interior design industry, so custom, wall coverings, furniture making, light fixtures etc. So that piece of the creative worlds, we also have a segment that focuses on health and wellness and some hospitality in there. And then professional services as well.
Susan Tatum 10:39
Okay, well, so let's get a little bit more into into the product and pricing, you have a course that you're running on that are about to launch, don't you?
Julie Sellers 10:51
Correct. Yeah. So we launched it earlier this year, and we're just about to make it available on demand. Yeah. So it's, it's how to price your product and services, and it walks someone through the methodology I just described. And if I had to give it a headline, and, you know, I guess the headline of like, my passion of why I'm so passionate about this work, that doesn't sound that exciting, it doesn't sound that sexy. It's because of this thing that I learned several years ago. So, you know, I think that typically the answer in business is it depends. But I've learned something that seems to be a universal truth, no matter the size of the business, the type of business, it doesn't matter. If you look at your products, or your customers and break them into quartiles by revenue, what you're going to find is, the top quartile of your clients or products, is going to create 80% of your revenue. The 80 20 rule, everyone knows that. But it's so impactful that it plays out that way. But here's the more interesting side of that. That's just talking about revenue, right? If we substitute the word profitability, for revenue, like this statistic just blows my mind, the top quartile of your product, service, or customers will create 150% of your profitability.
Susan Tatum 12:39
We're talking profitability, not revenue, right?
Julie Sellers 12:42
We're talking profitability. More me, in my mind, more important than revenue right? So. So I mean, what that implies, the math doesn't add up. So like what that implies, then, like, if you look at this study, the two middle quartiles like 25% to 75% aren't really doing anything, it's business that's there, it's fine, whatever, it's not hurting nor helping your bottom quartile is costing your business 50% of its profitability. So that's why I'm so like, wildly enormously passionate about this piece of the work because this is kind of like the cleaning house that you have to do to then make anything else you want to do in your business, be it marketing, be a business development, be it hiring, like this is the first step to make that other stuff more impactful, and make sure that you are investing your resources in a way that's gonna pay back and not just drain out that profitability more
Susan Tatum 13:54
You know, that's really interesting, Julie, because we work with, with our clients, to get them to get rid of like the low end of clients. And that's in terms of profitability, and profitability and whether they're fun to work with or not, you know, I mean, you know, just a bunch of jerks, then that's not healthy but I had never really thought of it from the standpoint of the product or the service that you're offering. And maybe you should just get rid of that. Well, I kind of have, but I never articulated it that way.
Julie Sellers 14:33
Yeah. And I think to your point that you made earlier and kind of bringing it together, they are linked to right. Because if you have a business that's offering multiple products or services, or you have a business where everything is custom, and therefore you are offering multiple products or services, like there probably should be a different target market for each of those segments. So I mean, what you're saying makes sense to me. They're totally links. It's just another lens to look at it through
Susan Tatum 15:07
that's really interesting. And you you you're like 80 to 90% of your clients when you first start working with them have a problem in that area.
Julie Sellers 15:15
They have a problem in the area, not one of them knows that that's their problem. So the way people come in the things that People, you know, come in saying our I have a cash flow issue. If I offer a service, you know, I'm totally maxed out on time and therefore my income is maxed. Or I feel like I'm at I'm on a hamster wheel. And so people, those are the problems that people articulate not understanding that this is a root cause and a solution to give some really big lift to that issue.
Susan Tatum 15:51
because they're running around devoting their time and resources in areas that are draining their profits
Julie Sellers 15:59
Susan Tatum 16:00
Very interesting. So this image of the hamster wheel, and I've heard that analogy before and felt it myself. And so what, so what can a business owner or an individual do? Or what steps should they take when they have that hamster wheel feeling? I mean, they should call you for sure. But what can they do?
Julie Sellers 16:33
I know, I'm like, How do I answer this intelligently? Um, gosh, I mean, I'm gonna say something. And I just, I almost feel foolish saying it because it's so much easier said than done. Right. But like, the best thing you can do that you have to do is step outside of the business to see the wider picture like creating that time and that space. Like, we talked to clients about making sure they literally have on their calendar every week, CEO time where they're working on the business instead of in the business. Again, I know it's so much easier said than done. But like, there's no way you can fix these problems while you are 40 hours, 60 hours a week, whatever it is inside the business.
Susan Tatum 17:22
Yeah, it's field forest can't see the forest for the trees.
Julie Sellers 17:26
Susan Tatum 17:28
And I even find that with the I focus primarily on strategy, and not day to day implementation of the programs that we do. And the minute I get sucked into implementation, it becomes unprofitable, but also I lose sight of the high level picture. And it's really, really hard to do both.
Julie Sellers 17:49
It is so hard to do both. It really is.
Susan Tatum 17:52
And I do feel strongly that the the answer to that is having outside help.
Julie Sellers 17:57
Yeah, I mean, I used to and again, I don't know how to say that.
Susan Tatum 18:05
Yeah, I, I think understanding that there is a problem. And it's something that you need to deal with and trying to get yourself to put that that time aside is an excellent first step.
Julie Sellers 18:17
Yeah. And I think, you know, you're just reminding me of something I've been thinking a lot about lately, which is, I think that and we're talking about problems, right, like how to solve this problems. So I think that, you know, since this kind of coaching and consulting industry has been around, whether it's explicit or implicit, like people have a connotation with it, of like, oh, I need help, and I'm hiring someone to help fix this problem. And intellectually, yes, of course, that's true. But one of the things I've been thinking about and we've kind of been repositioning in our business lately is like, yeah, like, Okay, we're here to help solve a problem. And we all have problems, like my business, too, right? But like, it's not, it's not about like, you know, helping someone who's feeling like desperate or like in a deep hole or whatever, like, what we're doing from an advising and strategy standpoint, is just a smart way to do business. Like, our best clients are brilliant, brilliant people, like there's nothing intrinsically wrong with them. There's nothing intrinsically wrong with their business. Like, what they're trying to say is, okay, I know where I want to get. And I want help from the outside, because that's what smart people do. And this will accelerate me and help me avoid pitfalls. It's the same reason that we as individuals have financial advisors or that chair, people of fortune 500 companies have entire boards of advisers, etc, are like, smart people surround themselves with advisers and so sorry for the bit of a tangent, but it's just something I've been thinking about, like, I feel like our work needs a little rebrands these days and like, No, this is just something that smart people do.
Susan Tatum 20:14
You know, That's a good point. It's like it's not that they made mistakes, or that they did a bad job on your clients or my clients. It's not necessarily They're experts their area of expertise. I mean, you know, God forbid, I should have to do interior design. I can look at stuff and know I like it, or I don't like it. But I can't walk into a room and say, well, this should be this way. This should be this way.
Julie Sellers 20:40
Susan Tatum 20:41
Yeah. I mean, I think we all need help from the experts. And you know, when I heard another analogy about you ever saying you got to step outside yourself, and that was you. It's real. If you're inside the bottle, it's really hard to read the label. And I keep thinking that one that you just have to step away from it sometimes.
Julie Sellers 21:03
That's cool. You know, if you don't mind, I'd love to answer a question. You asked me a few weeks ago, when we chatted that I didn't have an answer to on the spot. And I was like, I really need to go away and think about that. That has to do with the hamster wheel.
Susan Tatum 21:17
ok, cool. Yeah,
Julie Sellers 21:18
you had asked? How can someone identify that they're on the hamster wheel before it gets too bad before they feel awful before they feel desperate? Like how can you spot that earlier on if you want to avoid the pain and just get in front of things altogether? And I think pragmatically, there are two things. And it's kind of more like, if this is how you're set up, you're probably going to feel on the hamster wheel at some point. One is, if you are a business that offers services, or customized products, where you have to spend a lot of time in them, if you are trading your time for money, you're gonna be on that you're gonna feel the pain of the hamster wheel at some point, and if not yet, that's totally cool, but it will be in the future. And then the other very pragmatic thing I would say is, if you even if you're a solopreneur, which is great, if you are essentially just taking all the business profit in quotation marks as your salary as what you use to pay yourself, that's another circumstance where at some point, you will feel on the hamster wheel.
Susan Tatum 22:37
Is that primarily for someone that's trying to grow a business? Or would that hold true for just a lifestyle? Business as well?
Julie Sellers 22:47
I mean, it's certainly someone who's trying to grow a business for short term, I guess, in my experience, what I've seen is, and we have some clients who have solopreneur lifestyle businesses, and all of them at some point have reached this point of just same stuff, different day. And I feel like I'm on the hamster wheel, and maybe I don't want to leap frog. But and so like, the pain of the hamster wheel doesn't feel quite as intense as it might in another case. But they ended up there, too.
Susan Tatum 23:24
Yeah. That's yeah, like, that's true. Well, you. You the last time we talked, I pulled a quote that you had said, and it's going back to the products and pricing stuff. And you said if everybody had a tight handle on their product and pricing segmentation, they would be making 50% more and working 30% Less. When we talked about the 50% more, I think because you in this conversation, because you said it's that bottom half of your products that's doing it to you, what is the working 30%, where's the 30% less coming from,
Julie Sellers 24:04
I mean, sit not to be too simple about it. But same thing, it's resource allocation, right? Like, even if someone's not hands making goods, they're selling their time, we do not realize What a time and mental drag that extra business clutter has on us. And another thing that you could kind of layer into that, to think about this in a different way. Like, it's been proven that when throughout our day or business, we're task switching constantly, we're losing 40% of our productivity. So the more things that we're trying to give attention to in the business, that is intrinsically just draining time.
Susan Tatum 24:55
And a lot of it if you're not conscious of it can end up being things that are not that are not your superpowers or your strong suit. And that really sucks energy as well. If you're doing something. Give me hours of having to work with a spreadsheet and I'm exhausted.
Julie Sellers 25:14
I so agree. Yeah. And I mean, I'll go back to something else you said and I know you know, something you work on with clients in your businesses, when you're looking at that target clientele and I love what you said about like, also we want to know like, do you like these people? That's an important part of the mix. So one of the things that we use in our profitability matrix and exercise that we put in number two is like we say, on a scale from one to five, no three, how right is this product service or clients? So we give everything a rightness, like kind of score to bring in that not to be too pushy, but to bring in that energetic piece, as well. Because that, I think that has to do with your energy and your time it taps away does
Susan Tatum 26:07
and you don't let any you can't pick a three?
Julie Sellers 26:10
You can't pick a three.
Susan Tatum 26:11
I always do that.
Julie Sellers 26:12
I know that's my little Tim Ferriss ism, you can't pick a three because it forces you to like take a stance like is it good? Or is it bad?
Susan Tatum 26:23
Very good. Well, Julian, it's been great. I really, I think you've got some good tips in here. I know I learned some stuff and took a ton of notes here. For so for the listeners that want to follow up with you and to learn more. How's the best way to do that?
Julie Sellers 26:36
Oh, I so appreciate that. Yeah, our website is Ellevated outcomes.com Ellevated has two L's so E L L. E ellevated outcomes.com. And on there, yeah, there's information about me and my colleagues, our products and both our advisory practice and this how to price course that we're talking about.
Susan Tatum 26:59
Excellent. And we'll put the we'll put the links in the show notes as well. And, and again, thank you and I know you're off to Italy soon and have some good food for me.
Julie Sellers 27:11
I will be happy to do that. Thank you, Susan.
Susan Tatum 27:16
Take care bye