Unscrambling Your Small Business

by Aug 28, 2011Work and Life

Talk to anyone about starting a business and you’ll hear one, if not all, of the following three warnings. You’ll even hear them from small business owners. #1 – Having clients is like having multiple bosses. #2 – Being self-employed means working 24/7. #3 – Business owners are always scrambling for work. Truth? If these conditions exist in an established business, you’re doing something wrong. A very specific thing: your business lacks a cohesive structure. Ultimately, you must define what you do and how you do it – and redefine it periodically – so your customers don’t define it for you. This involves more than pricing or positioning. What’s needed is modeling. Identify a specific unit of sale and its cost (in time and money) to deliver. Calculate how many of those you need to make a profit. Test whether the market will bear a price that is feasible. Rinse and repeat. What independent professionals often do, (I speak from personal experience unfortunately), is to offer ourselves up as skilled or expert workers but let clients define the scope and operations of the work itself. Imagine the chaos if a restaurant owner tried to sell only “food”, let patrons order whatever they want, and had to pull together ingredients, equipment, and staff on a case-by-case basis. That is the position you’re in when you interview individual clients, determine a set of activities, and negotiate hourly fees based on the going market rate for that activity. The ideal position: you promote your capacity to deliver a specific result, product, program, or set of events. You set prices in line with the budget your prospects have for the particular need you fill. You deliver your services in a predictable way that best uses your strengths and resources, including your ability to minimize time and money spent to perform to standards of excellence. There’s nothing wrong with working hard. It’s absolutely necessary. However, in a functional business: #1 – The business owner, not the customer, is the boss who controls and directs the work. #2 – Work schedules and processes are designed with appropriate time constraints. #3 – Systematic marketing is an integrated part of operations, not a a chase for jobs defined by other people.
Barbara Ruth Saunders is a writer, editor, and writing coach.