Got big dreams for your business? Eager to succeed? Fantastic! Now sit down and figure out how you are going to make that happen. You can’t cut to the front of the line or skip steps. Use your excitement to keep focused on your plan. Don’t use it to jump ahead and try to short circuit the process.
Every day I see small business owners jump ahead in a couple of areas in their business. From marketing to networking to pricing you can do real damage to your future if you go to fast.
Before you sign up to advertise in a magazine, pay for Google ads, or buy air time, ask yourself some key questions:
- Who is your audience?
- Where is your audience?
- What is the best way to transmit your message?
Taking the time to answer these questions will help you avoid spending money in the wrong places. Think about it this way. If you sell to businesses, does it make sense to put an ad in a consumer magazine or neighborhood paper? Not really. Sure, you can tell yourself that your target market will be reading that document. However, they won’t be reading it with an eye for what you are offering. Your message will be lost on them. That is not the best way to spend your marketing dollars.
Don’t allow yourself to be swayed by the salesperson or your associates. You must do your due diligence before signing on the dotted line.
Example: I have two friends who started an organization called Positive Thinkers Network. After it had been in operation for about a year they decided to launch The Positive Times, a periodical that goes into homes and has only good news stories in it. When the salesperson reached out to me about advertising in it my first reaction was to sign up. After all, I like the owners and wanted to support them if I could. My heart said ‘do it.’ When I took a moment to consider this I realized that it just wasn’t the place for me to advertise because I sell to businesses, not consumers. As much as I wanted to support my friends, this was not a good marketing decision. So I respectfully declined.
There are tons of opportunities to network, on and off line. You could be doing it all day and night, every day. However, that would not be the best use of your time. Once again you have to ask yourself some questions starting with what do you hope to accomplish. It is my opinion that networking is building relationships with people who may or may not need what you have to sell.
At the same time, since time is precious, you want to meet the people who can introduce you to your target. Visiting various events and groups to get a sense of them can be a very valuable exercise. Just pay attention while you are there.
Example: I have a client whose target market is CPAs and attorneys. I have another client whose target market is busy professionals and salespeople who like to thank their clients. Where they will network will be different. The first client should be around business owners as they are the people most likely to have CPAs and attorneys. The second client would do well with business owners but would also do well in a group of salespeople.
This is an interesting place where time really matters. Sometimes new business owners decide to low-ball their pricing just to get the business. They are afraid if they price where they want, prospects won’t bite. There are a couple of issues with this thought process. When you do this you are telling your prospects how YOU value your product or service. Once you go low, it’s hard to raise your prices. You get locked into a belief system that can stick with you for a long time.
The other issue with this is the kind of clients you’ll attract. You’re going to get the clients who don’t want to pay for things; the kind who won’t value what you offer. There is the risk that they will demand a lot of your time and energy without reasonable compensation. Is that really who you want to work with?
Other times, business owners set a high price right out of the gate. They say, “I’m talented and worth this much.” The problem with this can be that they are so new they haven’t proven themselves yet. They know their history and capabilities. However, they haven’t given the marketplace time to trust them. When they start high they can be sending the wrong message. Once again, their target market won’t buy. Now what do they do?
The best thing you can do is set what you think is a fair price. Be realistic; be fair. Consider where you are in your business life and set a path for proving yourself. Don’t go too low or too high. Take the time to really consider what you should be charging. Take a look at what your competitors are asking for similar products or services. Consider what the market will bear.
I’ve watched brand new businesses charge really high fees for basic services. A year later those business owners are looking for jobs. Why? Because they hadn’t taken the time to prove themselves and earn those rates. Don’t be one of those people.
As you can see, taking the time to think about your decisions before you make them can save you a lot of money and heartache. You owe it to yourself and your business to ask the right questions and think unemotionally about your business. Then you’ll make decisions that will have staying power; and your business will grow nicely.
Growth Photo via Shutterstock
Two things I loved:
1. The picture of a growing plant. Growing up on a farm I learned that you put in the work but you have to let the plant do the growing. Growing too fast is bad.
2. The examples. It brings the point home to see a real life example of the principle in action.
Sam G. Daniel
With regards to pricing, to get business you can start in the middle of road and with each subsequent client you can slowly raise your rates.
You could also update pricing every year with existing clients but give them fair warning. Let them know your reasoning.
I really like your point about pricing, I agree that it’s important to not low-ball your value, if you attach a low price you attach a low value in the mind of your customers.
Identifying your target market aka ideal customer is very good advice on your part. A lot of people just start spending money without thinking it through. Identifying who you are trying to lure into your business is step one and you have to know everything about him or her. Where do they live? What is their profession? How much money do they make? Everything!!
So many people want to sell to everyone! It dilutes their message, their energy, and therefore their revenue.
I completely agree with you about growing too fast. One of the things that I learned is, creating a plan with goals using the STAR(Specific/Time/Achievability/Realistic) method. A business needs to grow with time so that it doesn’t grow too fast and then not be ready for growth. I’ve seen too many business grow but die off quickly because there was no foundation. By managing your time wisely using tools like http://www.bulkofficesupply.com/search.aspx?find=time+management ,setting goals, and having drive there is no limit to what your business can do in terms of growth.
I agree with your point on pricing. Its never a good idea on selling your products just on price. Your customer would flock away if they find some other retailer with lower prices. Try to establish yourself as a leader in your category where customers comes not only for product but also for ideas.