Today, my business is focused on business strategy consulting for social media, pricing, and feasible business models. It's no longer the 'all things to all entities' business strategy consulting. My clients are primarily service entrepreneurs or small businesses, so we focus on the issue of sustainability - from strategy and business model to, quite simply, a more feasible schedule.
In 2010, the stats were that 90% of businesses fail within the first five (5) years of existence. In 2013, another Forbes article that mentioned that it is now 80%, but in the first 18 months. Why?
Eric T. Wagner (thank you), in his Forbes article, listed five (5) reasons, but I'm going to focus on the lack of a sustainable business model. There are a lot of articles you could read out there about retail, manufacturing and tech start-ups, so instead, I'll focus on the service entrepreneur, such as consultants, coaches, strategists, tech services and designers.
Sustainability is often connected today with environmental stewardship, but by definition it is about the ability of something to be sustained or sustain itself - to keep going. Is your business sustainable?
- Can you do this, every week, for the next 5, 10, 25 years? Can you keep going at this pace?
- Will you keep looking for new clients, or can you grow with clients over years or decades?
- Can any aspect of your process, offering, be automated, replicated or 'self-directed'?
Only you can answer these honestly, if you're going to make changes that give you a business that remains a 'going concern', but here are a few ideas to get started.
- Schedule: are you best with people in the morning or afternoon? When do you get most productive work done? Are your clients aligned with these times? They just might be.
- Long-Term Clients: are your services a priority for clients? Is it something they'd need on a recurring basis, or not? If not, can you alter your offering to lend them long-term support?
- Replication & Scale: You can deliver a workshop live and, simultaneously, have the pre-recorded workshop available online. What other areas of your business can function this way?
If you're getting these on track already, it's a good start. Now, is what you're getting paid through your business covering your business expense and your desired lifestyle?
Two mentors, independently, gave me this breakdown, to help me determine whether or not my business would survive. One learned on going bankrupt. The other learned and thrived.
- Calculate honestly what it costs for you to live comfortably (at least a 5-year outlook). Include savings, insurance, experiences, etcetera as well - don't be too conservative.
- Calculate honestly what it costs to cover all of your business expenses (again, 5 years). Include marketing, networking, software, conferences, memberships, support, etcetera.
- Calculate your hourly rate, using these numbers as the base income you must have. Of the 365 days a year, how many are work hours - not Admin, Marketing, Prospecting?
- How, now, can you package your services so that you deliver this value within an hour? Do you spread that over a week, a month? Offer combined face-time, calls, materials?
Play with the numbers you get in steps 1 and 2 all you like. You're still going to have to live, and you're still going to have to spend something to keep your business going. That means step 3 is almost always going to be a number that at first sounds steep... crazy? Maybe.
Are you worth it? Are your clients worth it? Think about what you do for your clients. What does it give them the freedom/time/resources to do more of? How much is that worth to them? If what you're offering isn't worth "that much", then is it a viable business? If not, can you change / add something to deliver more in less time to clients?
Pick a niche, but unless your service is as necessary as air, don't pick only one revenue stream.
- You can do just one thing for just one group of people and deliver it in multiple ways.
- You can do just one thing for several client groups and deliver it in one way.
- You can do three things for just one group of people and deliver it in one way.
There are several different combinations that you can play with, until you develop a model that works for you, that is profitable and sustainable.
Wherever possible, in the interest of not running yourself ragged, I'd also recommend investing in at least a few long-term client relationships. I know that short-term clients can mean new and exciting projects, but you can also have that with long-term clients.
I hope I've left you with something to think about. This is not meant to scare you, but to get you to dig deep and strengthen your business; to focus on running it, rather than on keeping it.
Without clarity in business strategy, you start leaking financially, you don't serve clients exceptionally and social media is just more work with very short-term ROI. How can I help?
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Entrepreneurship is a passion of mine, so I love helping entrepreneurs. Whatever you're doing, stop doing it for free. You see, until we understand what we're worth, we won't last. Often, the reason so many entrepreneurs can't afford the support they need is because they don't charge their clients what they should, or they discount heavily. Who can you help if you don't survive?
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