Money in Luxury
Conversation about money is often met with knowing glances and whispers. The mere mention of money can make some people uncomfortable. However, the role money plays in luxury cannot be overlooked. Money is needed to produce products, market products, and we expect money when these products are sold. In fact, luxury pricing usually means a great deal of money because of the uniqueness of the product, service, or experience. Clients often wonder: “Why is this product so expensive?” It is because of the materials, time, craft, scarcity, and brand prestige, among other qualities. (See my YouTube video: “What Makes a Luxury Brand”:) That said, it stands to reason if we are building a luxury business that we consider money when shaping our product offerings. If you are afraid to discuss money, or invest money, you’ll find a hard time attracting it.
When it comes to luxury entrepreneurship, you can easily get into trouble by having a “shop keeper’s” mentality. That is, tinkering and toiling with a product, long into the night that is magnificent, but you’ll never sell enough of, to pay the rent. I often run into entrepreneurs with a great idea, but they never consider fully the money in the business. Because of that, they keep their idea small and their business small. There are countless craft products that can be sold as luxuries, but the question is whether you can build a business around them. Picture frames, scented candles, pillows, flower arrangements, desserts, are all lovely, but not considering money can lead you down a trap that will put you in a business that is unsustainable when you factor in facilities, materials, labor, marketing, shipping, etc.
This does not mean you cannot build a luxury business selling these items. It just means you must think bigger about how you sell them and who you sell them to. In New York City, for example, the days of selling pizza by the slice are dwindling. Real estate prices and labor make it so. The money in pizza is in selling the whole pie, a range of gourmet pizzas, pasta specialties, entrees, salads, drinks, catering, etc. While you might be thrilled to market Aunt Millie’s tasty old world sauce recipe, in New York City, thinking bigger is required.
If you’re a luxury entrepreneur, or soon-to-be luxury entrepreneur, the first thing you should consider, after your base product, is how you can make what you offer even more compelling by adding to it. Since customization and bepoke offerings are fundamental to luxury, this should not be hard to do. You will also want to consider how to aim your offering at the right people, in the right places. This means targeting the affluent and wealthy, and learning how to do so, successfully. The good news is when you engineer your business in this way, with the thinking, proper marketing and targeted to the right people, you’re considering money in your business. To attract money, get comfortable planning for it, so more money comes. Money does not like being alone.
