Novices look in from the outside. They see an owner of a business for whom life is easy. They’re making a lot of money, taking a lot of time off – living the dream. They want that too!
Musicians have written about it. You’re “takin’ care of business” when you “work hard at doing nothin’ all day.”
Experienced business owners know better. Owning your own business is work. Make that hard work. You labor hour after hour, day after day.
Sure, you may reach a point when you get to spend most of your day working “on” the business. You may even be able to be an absentee owner (at least mostly) down the road.
However, in the meantime – while you’re striving to “make it” – entrepreneurship can be like riding a roller coaster. The experts tell us not to get emotional about business. But they aren’t entrepreneurs.
By its nature, entrepreneurship is an intensely emotional experience. At times, it is fun. Ten minutes later, it’s not.
When you’re converting leads into sales and cash is pouring in, it’s a blast. When a key employee quits or you lose your biggest customer, it sucks.
While you can’t control everything, you can smooth out the financial ups and downs. Here are three suggestions for doing just that:
Stop chasing, start serving
Research shows that it costs five to seven times as much to get a new customer as it costs to keep an existing one. So, stop chasing every prospect and start serving your current customers better.
Happy customers buy more. They also buy more often. Customers who are thrilled tell others. They become your brand ambassadors. And it doesn’t cost you a thing.
By the way, we just highlighted the three best ways to grow your business. All three come from the same place – your existing customers.
How can you increase your average sale? How can you get them to buy more frequently? How can you exceed their expectations so much that they feel compelled to tell others?
Micro-market consistently
In spite of what we just said, you shouldn’t stop chasing new prospects altogether. After all – even if you’re thrilling your customers – you will still face some customer attrition.
Local businesses will have customers who move away. The demographics of your customer base may mean people move out of your primary zone. Natural causes will claim a few.
So, you have to market consistently. Marketing works best cumulatively – consistently investing today and tomorrow, this week and next and so on.
But no matter what other marketing you do, we suggest including micro-marketing in your mix. It’s a really simple concept: Reach out to five people today. Then, contact five more tomorrow.
If you allow for twelve weeks of downtime (just to live up to how outsiders think we entrepreneurs work!), you will touch 1,000 people by the end of the first year. What effect would 1,000 conversations have on your business?
Weigh the cumulative effect of your decisions
Opportunities to spend money hit your desk every day. Some are not worthy, but many of them are. In the rush of day-to-day business, it’s easy to add this cost and that cost.
Before you know it, your cost structure grows. Your margins fall. You can keep these costs out of your system by weighing the cumulative effect of your decisions.
What top-line revenue do you expect this cost to generate? How will this cost help you operate more efficiently? What is the financial effect on your bottom line? How does this cost fit in with all of your other costs? Are there any costs that you could eliminate if you add this one?
There are going to be ups and downs, no doubt. But, if you utilize these three strategies, your life as an entrepreneur may get just a little bit easier.
How do you smooth out your financial ups and downs?