You're Not Officially In Business Until . . .
August 10, 2018
Congratulations, you’ve got your business license, the website is live, and you’ve had your Chamber of Commerce ribbon cutting.
You’ve framed the obligatory “first dollar” of revenue.
Maybe you’re already to the point that you’ve got some clients and a healthy pipeline of prospects. Maybe you’re turning a profit. Maybe you’ve already filed your first tax return.
Maybe you’ve been in business long enough to think to yourself, “hey, this thing is really going to work.”
None of these signposts matter, at least for building a successful business.
From my own experience and in working with numerous businesses, you’re not officially in business you’ve passed these key milestones:
You’ve been turned down because you’re too expensive
The gut-level uncertainty we have as owners of our business invariably shows up in our price, particularly in the beginning. We don’t have the patience to communicate the value we provide, nor the temerity to ask for a price which reflects that value.
If you’re getting a 100% conversion rate, your prices aren’t high enough and you are cruising straight toward an iceberg. You’ve got too many clients at the wrong price. You’re working way too hard for too little money. Some combination of burnout and service failure is looming.
You’ve told a prospective client “we’re not a good fit.”
If you can’t acknowledge that not all prospects will be good customers, you’re not officially in business. There’s no way to know your ideal customer until you’re doing actual work and delivering real products or services to clients. You need paying customers to help you understand the value you provide, because customers are uniquely qualified to give you this vital feedback. In turn, until you deeply understand the value you provide, you can’t know the profile of your ideal customer, and conversely, which prospects are not a good fit.
If you think you’ve already reached this point, however, there’s one more requirement: you’re not officially in business until you’ve turned down even pitching a client who is not a good fit. If you haven’t developed the ability to recognize the signs of a “bad fit” client, and if you don’t have the fortitude and patience to save your capacity for customers and prospects who are right for your business, you’re not official yet.
You’ve fired a client
Despite our best efforts, we sometimes engage with a client who turns out to be a tough fit, both for you and for them. The chemistry isn’t right. They keep asking for more from you but are reluctant to pay more (or you don’t have enough guts to ask for a higher price). Maybe your business has moved in a different direction from when you started. Maybe you “feel sorry” for a client because of their circumstances but you soldier on.
You aren’t doing this client any favors by hanging on. You will come to resent working for them and your service level will drop. This client needs to find someone better suited to meet their needs, and you need to let them go gracefully. You need to free yourself up to work with your ideal clients, the ones who love doing business with you.
You’ve raised your price for your current clients
Circumstances change. Your cost of doing business has gone up. Customers want an additional feature, and maybe you are providing additional benefits. Because you’ve had real customers, you’ve received feedback and found you’re providing a mountain of value relative to the price you charge. If you haven’t implemented a price increase which current customers have accepted, then you’ve got more work to do.
If you’ve completed all these objectives, then congratulations! You’re officially in business. Let the real fun begin. You’ve got the foundation of a successful business.