Turn Your Competitors into Customers
Turn Your Competitors into Customers
Business is hard. It doesn't matter what inspirational quotes you read, how much people give you “foolproof roadmaps” to success or whatever other support mechanisms you put in place, the plain fact is that business is hard.
Sure, it's fulfilling and rewarding and all of that other good stuff that we can measure our happiness by, but there will always be the bad days.
I've run service based businesses since 2005 and when you run a service based business, the bad days tend to come around the time that all of the hard work that you have put into “winning” something gets undone because you “lose” that something for reasons that you can't fathom.
You see, service based businesses are are fantastic and actually, they're the type of business that most of us start with – we trade our time for money, usually more money than we did in our “last real job”, but still we do trade our time almost directly for money.
Even if you work on a project basis, like many digital agencies out there, for example, you're still usually quoting based on the amount of time it takes to deliver the project and then wrapping that in a single proposal to your prospect.
More on that in another post.
The challenge is that this becomes difficult to scale.
Without focussing on growing a team, you can't focus on scaling your enterprise.
And with that mindset, the focus becomes growing your turnover, because that's a really super-cool-almost-vanity metric that gives every one of us the faux feeling of positive movement.
The thing that we forget is that we're actually in business to make money not to simply move money around.
Therefore, our focus should always be profitability.
So how can we boost our profitability without increasing our costs too significantly?
Well sure, we could put our prices up – and we should all be doing that anyway, everyone charges too little. Everyone.
But then we're simply applying a bandage, a temporary fix. Because eventually, we'll enter a new period of growth and need to look at new ways to grow.
And then we'll look at either adding new services to sell to existing clients or we'll look at acquiring, even more, new clients.
Either way, we'll then simply need more people.
And so we increase our costs and our turnover significantly, whilst only marginally increasing our profitability.
Time to be honest
We're in business to make money. Let's not skirt around that – it's a plain fact and it's alright to admit it.
We must do that in a fair, ethical and value led way but when we're strategising and planning the next stages of our business, we must do so with a mindset of making money.
Being a service based business is great but it can be limiting.
We're always “hustling” for the next job, always running through spec work or negotiating on price because much of the time, people don't see the value in what we do.
Sure, there are those who do see the value and they're the ones with whom we tend to forge long-term working relationships with.
The challenge is that unless we want to pitch on price, we have to go through a huge education process and really pitch our services as the solution to the issues that our prospects have – and that can be time-consuming and ultimately, limiting.
Unless you can build the time it takes to educate and pitch your prospects into the “job” price, then you'll always be working at a lower rate than you deserve.
Turning your competitors into customers – the secret is…
..creating products for your industry.
Recurring revenue that is either partially or completely passive is the proverbial panacea for business, in my opinion.
It allows you to project and plan accurately, it gives you the space that you need to be able to choose the work that you really want to work on within the service side of your business and it gives you a great way to boost your profitability without requiring disproportionate investment in team or infrastructure, usually.
What if there was a way to achieve that whilst also removing the need to worry about chasing down every single job, whether you like the job or not, just so that you have cashflow?
What if you could take that a step further?
What if you could turn your competitors into customers?
Hear me out.
It doesn't matter who you are, you have “competition”.
Plainly and simply there are other places that your prospects can spend their money instead of with you. Regardless of how “good” your competitors are or aren't, prospects will buy where they want to buy – we all do.
But consider this: you know your industry; you know your industry's problems; you know where your industry on the whole struggles.
And you know how you work around these issues.
Somewhere, somehow in your business, you're solving a problem for your industry that you don't even realise.
And by solving that problem you have the ability to create something that you can monetise.
You have the seeds of a product – most likely a product that you can roll out to your competitors in return for some stable, recurring revenue.
What's more, by creating this product based on solving your own problem, in your own industry, you have the ability to market that product in a really powerful way.
After all, you've been in your industry for a good while now and you know exactly what the barriers to marketing this new product exist; you know exactly what questions to pre-emptively answer and you know exactly what the messaging for this product should be.
Ask yourself: could you, with minimal investment, create a commercial solution to a problem that you already solve with “Blu-Tack & Sellotape” yourself internally?
And could you roll that out to your industry, thus creating a stable recurring revenue stream and positioning yourself as the best in the business as a by-product?
I bet you could, and I'm sure that with some time really invested into this, you could also create the kind of space within your business that will also allow you to really ramp up the profitability of the service side, too.
It's worth a look, isn't it.
Don't forget, the more you expect from yourself, the more you WILL excel!
Also published on Medium.