If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
This is habit number 4 in the series, The 4 Habits of Modestly Successful Entrepreneurs, following: 1) selling time for money, 2) working too hard, and 3) relying too much on data. These habits are the things that keep business success at a modest level. Implementing business strategies to break these habits can propel entrepreneurs to phenomenal success.
Everyone is proud of the products or services they provide and thinks that everyone can benefit from using them. This may be true, but in a world of finite resources, selling to everyone can present a real challenge to business growth.
Modest Success Habit #4 – Selling to Everyone
Most people have heard the advice around picking a niche market to focus on, but why is that advice routinely not followed. Largely, because selling to everyone plays to some common fears held by many new entrepreneurs. Continue reading →
The first habit I introduced in this series, The 4 Habits of Modestly Successful Entrepreneurs, was selling time for money – a habit that structurally caps the amount of revenue your business can generate. That was followed by the habit of working too hard – which limits efficiency and the longevity of your business. These two habits, along with the other 2 habits in the series, are the types of behaviors that keep business success at a modest level. Implementing business strategies to break these habits can propel entrepreneurs to phenomenal success.
Our third habit is explained below. Don’t forget to watch the video for a more in depth discussion on relying too much on data.
Modest Success Habit #3 – Being Overly Dependent on Data
Most of us have heard the cliché “analysis paralysis.” Just because something is cliché doesn’t mean it is not worthy of our attention. While it is absolutely necessary to ensure that an adequate amount of homework and research has been done before launching a business and continued industry and customer intelligence is critical, it is possible to be overly dependent upon data. Continue reading →
In a previous post, I introduced you to the first habit in my series, The 4 Habits of Modestly Successful Entrepreneurs. The goal of this is to help small business owners and solo-preneurs to understand the business practices and even models that may be keeping them in the middle of the pack of entrepreneurs achieving modest levels of business success and exposing them to strategies that will lead to phenomenal success.
Our first habit was selling time for money. We discussed some of the challenges of that business model and the inherent limitations it poses on the maximum amount of revenue your business could earn. This post covers the second habit. Feel free to watch the video for a more thorough explanation of this habit.
Modest Success Habit #2: Working Too Hard
Who would ever think that working too hard is a problem? Aren’t entrepreneurs known to be some of the hardest working people on earth? Doesn’t it take commitment, dedication, and a singular focus to make a business successful?
Yes, is the answer to all of those questions. Yet hard work is something that must be managed. There is a saying that when you want something done, give it to a busy person. That is because most busy people have learned how to manage the work they do effectively. For an entrepreneur though, when things start to pile up, it is easy to slip into the mode of, I’ll just work harder and end up with the habit of working too hard.
Why working too hard is a problem
Here are some of the perils of indulging this habit:
Working on the wrong things – More than likely, people who are working too hard are caught spending most of their time putting out fires and ignoring the important, non-urgent items. This creates a vicious cycle of too much work.
Inefficient performance – You cannot perform your best when you are constantly over-worked
Performance that is not sustainable – Burning the candle at both ends is not something that can be kept up forever. You will pay the price in:
Health problems (stress, weight issues, heart disease, etc.)
Degrading relationships (including the support system necessary to keep you successful)
Loss of passion that can lead to mental drain burnout
Solutions to break this habit
Create a plan that covers both vision and goals
Holistic plan that includes your personal goals as well as your professional goals since, with entrepreneurs, the connection between the two cannot be ignored
Have a strategic plan for your business that includes a long-range strategy and short-term operational plans. Doing this will allow you to feel more in control and have opportunity to spend your time on the things you loved about your business when you started it versus the stress inducing activities that fire fighting causes(There are more benefits of strategic planning that we don’t have time to cover here, but, as a strategist let me say that good strategic planning and execution can propel your business to success in a more efficient manner than just winging it can)
Build into your schedule regular “think time.” While it doesn’t require much movement, thinking is a necessary and productive activity that allows you to pull up from the details periodically to see the big picture and tap into your creative juices.
Build into your schedule time to engage in the things you love to do and that will re-energize you. This may include:
Playing hard (after you work hard)
Celebrating your victories
Investing in your continuous self development
Getting some rest
If you remember that you are running your business for the long-haul, for the marathon versus the sprint, you will understand why consistently working at maximum capacity will reduce the length of time over which you are able to produce results.
There are over 20 million single person businesses in the U.S. with an average income of about $47K per year. I would call that modest success in business. I suspect, however, that most people do not forgo the “security” of a steady paying job, take on the financial risk, and put in the countless hours worked by committed business owners to generate mere modest levels of business success.
What people really want is phenomenal success – financial security, time to pursue goals, and work that fuels their passion. Why don’t most people achieve this? Because they establish the habits that lead to modest success.
This is the first in a series of seven articles – The 4 Habits of Modestly Successful Entrepreneurs – that will cover the most common habits that limit success and highlight strategies that can be used to overcome them. (Each habit will have an associated video that explains it in a bit more detail.)
Selling Time for Dollars
The first habit, and perhaps the most common, is to sell time for dollars.
What does that look like?
Solo-preneur businesses based upon their expertise
Years of education – e.g. doctors, therapists, lawyers, accounts
Specialized training – e.g. coaches, stylists, PR specialists
Experience – e.g. consultants, coaches, and people leaving corporate America and now starting their own businesses
Set up an hourly rate that clients pay – charge clients $35 – $1,000 per hour. Some people charge by the day
May have a retainer based upon commitment of time – rent an executive, people who help companies outsource their services
Why is it a problem?
You only have a limited amount of time that you can sell. This caps you revenue potential
You must spend time on activities required to run and grow your business – administration, finances, marketing, etc. These activities reduce the amount of time you have available to sell and further reduces your revenue potential
You don’t get paid when you don’t work – vacation, illness, etc. Furthermore, your clients receive less reliable service when you are need to handle emergencies or are unexpectedly sick
When you stop working, the business stops being valuable. Entrepreneurs make money when they create salable assets that are of value to a buyer. If it’s just you and your time, the value of your business goes to zero when you stop working.
What could it look like?
A limited portion of your time being is sold by the hour – after all, for most people, this is where your passion and interest lies, so you don’t necessarily want to cut it out entirely. Also, it gives you great experience to use in other parts of your business
Your business has established systems that can be taught to other people – this is a way to increase the hours that can be sold. If everything is in your head, only you can provide the service. With a system, you can continue to increase capacity by adding people.
Your service is delivered in several ways – because you obviously are very knowledgeable, it is more likely than not that you could add value to others by monetizing your knowledge. Delivering content in a group setting, via information products, or over technology are all ways to create additional value and serve more people. The use of the internet makes this possible and affordable today more than ever. (In fact, I believe that all business should have an internet strategy in place for both service delivery and attraction marketing.)
Applying some of the same business strategy tools used by large corporations, you, as a solo-preneur can have phenomenal success in business. Keep a look out for Habit #2.
It is possible to gain business success by giving away value?
It seems as though everyone is giving something away for free
these days. On the internet, you can free find information and tools to address virtually every need a business or consumer has. But is anyone making any money? And can a solo entrepreneur employ this strategy to obtain business success?
Most definitely one can be successful with this type of business model. But financial ruin is also possible.
Much can be learned by the small business owner from the strategies of both Twitter and Skype.
Business Success for Twitter is in Long-term Value Creation
First, the Twitter model. Twitter, which has millions of subscribers and people using it as a primary business development tool, is free. In fact, this free service has no advertising on it and, currently, no way to upgrade to a premium service.
Will this model work for the small business? Definitely not. The founders of Twitter raised over $20 million in funding to support the development, bandwidth and operation of the service. Is it a bad business model for Twitter and it’s investors? Not if they are in it for the long haul. Twitter’s user base and the software applications being developed around it are making it an extremely valuable asset. Facebook offered to buy it for half a billion dollars and rumors of talks with Google suggest it may be selling for twice that.
Small businesses, or really any business that is not able to raise tens of millions of investment dollars, need business models that will provide cash flow while creating value.
Skype Achieves Business Success Through Premium Services
Skype provides a second example of how business uses free service as a value creation strategy. Skype offers free calling, voice and video, to its users over the internet. However, their value creation strategy is not trying just to build a huge user base to sell later. They offer premium services that appeal to business users. These business users, perhaps introduced through the free service, are willing to pay for additional services. This provides cash flow while the user base grows.
This approach to business value creation is much more realistic for a solo entrepreneur to employ. Newsletters, free teleseminars, articles, blog posts, free reports – these are the types of value you have to give away. In order to achieve business success, however, you must build a following by giving people an opportunity to stay in touch with you.
Keys to Turn Your Free Offering into Business Success
After you have created some type of free connection with people, in order to use the Skype model versus the Twitter model, you must offer them something they find of value that they can buy.
Here is a summary of the steps that are necessary to create a model for business success:
Offer something of value for free that will encourage people to repeatedly connect with you.
Establish a process to be able to proactively communicate with them. You will have a hard time creating value if you have no way, such as through an opt-in email list, for communicate. your messages when it is time for you to request action from your followers
Create something that is of such value that a subset of your followers will be more than willing to pay for it.
I think I like this new trend of demanding value from businesses before you are sold something. I believe, it the long run it will cut down on the volume of junk offerings available and will make the internet overall a better place in which to do business.
