#1 Key to Business Success
A new year brings new hope, new beginnings, and new plans for success. Is your business ready for a new year? As we talk with hundreds of business leaders throughout the year, we know there are two keys to business success - an effective business model, and the right talent to bring it to life. 2020 placed significant challenges on many business models. Did yours thrive? If so, how will you maximize it for 2021? Where else you can add value and meet your customer's needs? If you're not sure that you did, or if a little checkup would be helpful, then this is the first article you should read for 2021!
GETTING STARTED
John* is a local business owner who's been in business for nearly two years. He started his business as a life coach, as a side business, helping clients to understand and overcome their challenges, and build healthy sustainable habits. He achieved a coaching certification, knew the fit was right for him personally, and was ready to help clients. His coaching course covered a bit of the business model, focused on 45-minute coaching sessions over multiple sessions. Beyond that framework, John didn't know how much he could generate as a life coach, where to find his best clients, or how to develop and modify his business model, to evolve this into a full-time career. Let's explore through John's story how you can develop and build a sustainable business.
CUSTOMERS FIRST
John's first challenge was to identify who were his best prospects, what their pain points were, and where to find them. He began with a conversation with another life coach, to get a sense of what they saw in the market as needed, and what they delivered. This may seem odd, however it is actually a great strategy in the service sector, because everyone has some unique skills and characteristics that fit best with some needs, and not exactly with others. For the ones that don't fit well, simply refer those individuals to a colleague, and they will likely reciprocate. He learned the biggest pain points in his prospects, and it sparked some ideas of how he could differentiate his services from others in the market. He was getting excited! He also decided to ask his first initial clients a few questions at the end of their sessions with him, to learn where he could add more value, and potentially have them return in the future.
GETTING PAID
One of John's next decisions was how to offer his services, and the value respectively. While his coaching program gave him some general ideas, he also reviewed the websites of other coaches in the area, to learn what they were offering in packages and pricing. He wanted to be solidly positioned in the market, and not appear as the 'bargain-basement' option. He knew that he could bring great value to his clients, and he deserved to be compensated fairly for that value. He created three packages for the key services that he believed would be needed by his clients. He projected how many clients he would likely acquire in each category, and the associated revenue. He tiered his projections for growth over the first three years. He wasn't ready to move to this full-time yet, but as he added repeat clients who saw great value, he could see it happening soon.
UNIQUE VALUE PROPOSITION
John was thrilled. He knew what he could offer, to whom, and how he would get paid. His dream of being a successful business owner, and doing the work that he loved was coming together. He could hardly believe it was possible!
As he was beginning to develop some marketing for the key services that he knew were needed, he paused to make sure that he could clearly differentiate his services from others in his local market. Then he thought, I'm not limited to the local market. I can deliver services anywhere through technology, and advance my reach and reputation faster and further! He migrated his virtual coach concept into his logo, business name, website, and service graphics. His brand was coming together, and he could see that this would help him be more memorable, and stand out from others. Flexible times, access, and locations were not the norm for others, yet he believed they would be better for client needs. He would integrate this flexibility into his service schedule and pricing.
BUSINESS EXPENSES
In John's business, he was fortunate that there was little overhead cost - largely his time and expertise. He established a marketing budget to build client awareness, a website, some social media campaigns, and participation in a local business network. He identified each of these as overhead expenses in his business model, knowing that they would not generate revenue, yet they were essential parts of his business design. He deducted these costs, both ongoing and fixed, from his projected revenues. He made sure to manage these expenses as a fixed percentage of his projected revenue.
READY, SET GO!
John now had a great plan, knew what he needed to do, and how he would track his progress. He decided that he would track his progress monthly, and re-evaluate his business model quarterly for intended client volume and revenues. As he began to reach out to prospects, his first five clients materialized. True to his plan, he asked them what they liked most about his services, and what one thing might make it particularly valuable for them. One thing he learned was to show measurable results. When his clients saw measurable results on their goals, they were incentivized to not only continue on the program, but to share John's services with others. He thanked them with a referral incentive. John was on his way to living his dream career, and loving it!
Access a Business Model Canvas to build your 2021 plan here
ARE YOU READY?
John learned how to get his business ready to go as a relatively new business, but what about established businesses that have hit a rut? The same principles work. Start with a clear understanding of your customers needs, pains, and current options. This usually identifies gaps in the market that you can leverage. We often hear from clients who have thrown spaghetti against the wall without a solid plan. Results suffer. Then, they need a resource to restructure their business model, and overcome these mistakes. The good news is that an early fix can be a great learning experience. If you are facing customer demand challenges, pricing, talent or overhead challenges, take the time to have a conversation with a business consultant, and get the right fix now. Wasting time may cost you the business, and your dreams for the future. A conversation may create an even better dream! Here's to your dreams!
Dawn Garcia is Principal and Founder of Pursuit of Excellence LLC, an independent business management consulting firm specializing in service-based businesses; delivering leadership, business and talent strategy, and performance execution. Experience the Excellence Driven® System and The Predictive Index® for your business, and achieve the results you need! Every business needs help sometime; great leaders get help early, realizing greater returns.
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Your Success is Our Success
*John is an alias to protect the privacy of the business owner.