In the first quarter of 2025, Netflix delivered impressive earnings that provide valuable lessons for small business owners. Their focus on profitability, strategic pricing increases, and diversifying revenue streams is something any business can learn from. For years, Netflix failed to beat forecasts and rarely carried any type of profitability, and now – look how much has changed. It’s a lesson we should all pay attention to and adopt ourselves.
Pricing Strategies That Boost Profitability
As we discuss a lot in our SCORE operating system, pricing adjustments can make an enormous difference in your profitability and financial health. Netflix has proven that adjusting pricing, even slightly, can significantly impact profitability. They raised their premium plan prices, pushing the value of their service while also seeing a steady growth in subscriptions. This simple yet effective approach to pricing is something small business owners should consider as part of their strategy.
Why Pricing Adjustments Matter for Your Business Growth
In business, pricing strategies are often overlooked, but they are a crucial element of long-term profitability. I talk with business owners all the time who say “we can’t raise prices because we will be priced out of the market,” or “we have our loyal customers who simply won’t change,” or any other number of excuses. Take Netflix’s recent earnings report as a demonstration that this strategy works. Netflix’s price hikes show that when you raise your prices based on the value you deliver, customers are willing to pay more. As a small business owners who may feel reluctant to increase prices, it’s time to bite the bullet. With careful thought and planning, a price increase can actually lead to more profit without losing customers.
How to Plan Price Increases Without Losing Customers
Notice the playbook Netflix gave us. They builtand communicatedvalue increase to the customer first, and then raised prices. Secondly, the only focused on value the customer wanted. Remember, you don’t get to decide what’s valuable – your customer does. When thinking about raising your prices, it’s essential to communicate the value you offer clearly. You need to demonstrate why your product or service is worth more. Let your customers see the value in what they are paying for.
Business Growth Through Diversified Revenue Streams
Additionally, Netflix’s focus on diversifying its revenue model—introducing ad-supported subscriptions and live events—has been key to its growth. Small business owners can learn from this playbook. What are the additional ways to earn income based off of the infrastructure you’ve already built. Whether it’s launching a new service or tapping into new markets, there’s always an opportunity to expand.
Finding New Revenue Streams for Your Business
A small business doesn’t have to rely solely on one source of income. By considering new revenue options like memberships, digital products, or even partnerships, your business can weather economic fluctuations and increase its overall profitability. Netflix expanded beyond traditional subscriptions, and you can do the same by introducing new ways to engage your customers.
Why Diversification Is Essential for Long-Term Success
Diversifying your revenue streams ensures that your business isn’t too dependent on a single source. This makes your business more resilient to changes in the market. Netflix’s pivot to offering ad-supported subscriptions is an excellent example of how diversifying can lead to a new audience and greater revenue.
Small Business Owner Planning: The Importance of Profitability
Netflix’s strategy shows how focusing on profitability is just as important as attracting new customers. By putting an emphasis on profitability, Netflix has been able to improve its bottom line, even as subscriber growth slows. Small business owners can apply this same strategy by prioritizing profits over just acquiring new clients. If you don’t have profit, your runway will event run out.
Setting Financial Goals for Sustainable Growth
Setting clear financial goals can help ensure that you’re balancing growth with profitability. Break your goals down into actionable steps, from pricing adjustments to exploring new revenue streams. This will give your business a solid foundation to build on and sustain growth for years to come.
Hiring a Coach to Guide Your Business Strategy
If you’re looking at Netflix’s earnings report and thinking about how you can apply these strategies, hiring a business coach could be the best next step for your business. A coach can help you refine your pricing strategies, identify opportunities for growth, and build a strong, profitable business model.
How a Business Coach Can Help You Build a Profitable Business
Hiring a coach is a powerful way to gain the guidance you need to navigate the challenges of growing a business. Coaches bring an outside perspective and help you stay accountable for implementing strategies that lead to profitability and sustainable growth. Just like Netflix sought innovation through leadership changes, you can innovate your business with the help of a coach.
Finding the Right Coach for Your Business Needs
When selecting a coach, look for someone who understands your industry, business challenges, and growth ambitions. A coach can help you set realistic goals, develop better pricing strategies, and teach you how to diversify your business’s income streams.
Conclusion
Netflix’s Q1 2025 earnings provide a roadmap for business growth and profitability. By adopting strategic pricing adjustments, diversifying revenue streams, and focusing on long-term profitability, small business owners can learn from Netflix’s successes. If you’re ready to take your business to the next level, consider hiring a coach to guide you in implementing these strategies and achieving your financial goals.
