10 Reasons Small Businesses Don’t Hit Their Numbers

Underpricing

As counterintuitive as it sounds, you can lose business by not charging enough. Good customers, who appreciate the value of things, will tend to avoid buying the cheapest solution because they will equate low price with low quality. The customers you do get will be a pain in the ass. They complain, blow up your inbox, leave negative reviews online, and/or demand their money back (assuming they pay their bills in the first place). No one wins the race to the bottom. Been there, done that, bought the t-shirt…not fun. I’ve found that underpricing is driven by unconscious and emotional factors, which stem from “unconscious competence” (Google the 4 stages of competence). I talk about underpricing more in this video.

Lumping Your Numbers

If you don’t know what it costs you to sell something (materials, labor cost, etc), then you don’t know which service lines and customers are generating the most profit. Don’t tell me you have “a sense” of what’s profitable. I’ve seen too many shocked expressions when people were confronted with the reality of their numbers after too many years of operating on guesswork, false assumptions, and “gut feelings.” Without an accurate measure of profit by service line and customer, it is much harder to focus your sales efforts and target your messaging. You may be losing money on some jobs and not even realize it, which takes time and resources away from profitable endeavors.

Treating Your Time Like It’s Free

Successful business owners value their time; unsuccessful ones don’t. Successful business owners offload and delegate anything they responsibly can; their unsuccessful counterparts try to do it all themselves and “save money.” Sometimes, the biggest costs in a business are the ones you can’t see on a bank statement or a P&L. Every minute you spend doing tasks that someone else could easily be doing, you’ve lost a minute that could have been spent making sales, solving high-level problems for your clients or otherwise doing your best work. Attorneys tend to understand this intuitively in my experience, mainly because they get paid by billing hours and they know their billable rates. They realize that they can’t afford the luxury of letting $300/hour billable work sit undone while wasting time on $20/hour administrative tasks.

Not Tracking Time

This seems painfully obvious to me, but I’ve lost count of how many business owners have told me they didn’t think it was necessary to track where time was being spent. Invariably, these same business owners usually complain that they don’t know why their teams aren’t as productive as they could be. If you aren’t tracking time, you might just as well not bother to look at your financial statements or your bank account balance, because you’re basically flying blind. You won’t know who’s pulling their weight or whether or not you are charging appropriately.

Lack Of Workplace Discipline

Here’s one reality check: look at each employee on your team. Would you still hire every one if them if they were applying for the job today? If not, why are they still working for you? In unhealthy work environments, there’s always “that one” employee that nobody trusts, and everybody knows who it is. Sometimes, there are more than one. If you think you can ignore the problem and that it’s not impacting your sales, you’re living in fantasy land. If an employee gets away with mouthing off at the boss in front of everyone, what message do you think that sends to the rest of the team? Or when someone gets away with padding their time card or misusing a company expense account, or sexually harassing a fellow employee? All of these things happen in companies of every size when spineless management looks like other way, sometimes even claiming that someone is “too valuable” to let go.

Sloppy Or Reactive Hiring Practices

Nothing cripples a business like high overhead, and payroll can easily get out of control if you don’t have a grip on your costs and time utilization. Small business owners often have no way to gauge the true capacity of their teams, and these are the business owners who tend to make hiring decisions based on feelings. Just because everyone is busy and there’s plenty of revenue coming in the door does not automatically make it a good idea to hire more employees, especially if you don’t know how much of that revenue is profitable or how productive your staff currently is. And don’t even get me started about hiring your neighbor’s kid or your brother in law.

Throwing Away Advertising Money

It never ceases to amaze me how much money business owners will throw at advertising without having a clue if it’s working or not. While I realize that it’s not always easy to measure the impact of marketing in every possible way, there is still plenty that you can measure. Ironically, I’ve seen some businesses spend thousands of dollars per month on advertising and not bother asking their customers where they found them. Yes, I realize that customers often forget and that you won’t always get accurate data. But there’s no excuse for not even trying to gauge what works and what doesn’t. Yes, it can be hard and frustrating to market a business and it takes trial and error, but it has to be done.

Losing Focus On The Core Business

As a lifelong Jim Collins fan, I’ve found a common thread in all of the studies in his books (most notably Good To Great, How The Mighty Fall, and Great By Choice). In all of his research projects, Collins and his team compared strong businesses to weak ones, and the most common pattern I have observed throughout his books is the tendency of the stronger companies to stay focused on their competitive advantage while resisting the temptation to start doing too many different things. Small business owners don’t have bosses, and sometimes that’s a bad thing. It is all too easy and tempting to say, “Sure, we can do that!” If cash flow is weak, business owners often feel they have no choice but to do anything and everything that looks like it might bring more money in the door, but spreading a company thin is financial suicide.

Copying What Everyone Else Is Doing

There are inherent similarities between different companies, usually due to the nature of the product or service and sometimes due to legal restrictions. But there’s a difference between following standard conventions and blatant copycatting. I’m talking about suddenly rolling out new product offerings that bear an eerie resemblance to the ones your competitor just rolled out last month, making sudden changes to your marketing language to include the latest buzzwords and trendy acronyms (without really understanding what the jargon actually means), or otherwise blindly mimicking your competitors in a monkey-see, monkey-do fashion. It looks dumb and it doesn’t work—and yes, we all noticed.

Holding Fast To Obsolete Business Practices

Just as a company can drain its resources by knee-jerk reacting to every twist and turn in the marketplace, it is equally problematic to hold onto obsolete business practices. In 2020, the COVID-19 pandemic changed the business landscape forever. This is just one example and history is filled with others; when the world moves in a new direction, new opportunities appear. The businesses quickest to recognize where the wind is blowing and get themselves in position early are the ones who win. Every time a major shift in supply and demand changes buying behavior, most companies are late to the party. Blockbuster Video is the classic stereotype, but the same thing happens in the small business world. Case in point: the move toward virtual meetings has changed the geography of business networks.
If any of the above sounds like you, and you’d like to do something about it, drop me a line at dave@dave-baldwin.com. I enjoy helping business owners create an objective, data-driven framework for making real-time strategic business decisions.

How (And Why) I Got Into Business Consulting

As I’ve told a number of people before, I have had two distinct careers. I spent the first ten years of my career in the technical field, working primarily with electronic control systems. It was fun stuff. Every job was like a puzzle. But something was missing; I ultimately decided that I wanted to spend more of my time working with people rather than machines. That said, the programmer in me never completely died. I learned to think in terms of systems and process steps, which ultimately created the framework for my consulting practice.

In 2007, my career took a sharp turn. At the time, I was working as a field service technician for a manufacturer of high-speed newspaper inserting equipment. I wasn’t sure exactly what I wanted to do next, but my first taste of coaching and personal development came in the form of a weekend seminar where I got a glimpse of a different future. I’ll never forget that Sunday morning when I woke up and decided I was going to start my own business. The next day, I left my notice and my job, and three months later, I moved to Raleigh, North Carolina from Pennsylvania, where I had grown up. Uncertain of what business ownership was going to look like, I did the only thing I could think to do: I went out and met as many people as I could.

I’m going to be blunt here: things did not go well. I ran out of cash and hit rock bottom financially. Needless to say, I do not recommend quitting your job without a plan, unless you have a solid track record starting businesses and you already have a clear idea of how to replace your job income.

While I don’t recommend doing what I did, I was fortunate enough to learn a lot in the process of fumbling my way through starting a business. I worked with a wide variety of companies and industries, and in the process, I became more and more clear about my personal competitive advantage. More importantly, I learned some important lessons about the realities of entrepreneurship that I hope will benefit my clients over the years to come. I’m going to list these lessons in prioritized order.

1. Self-development is not a luxury.

Changing patterns of thinking is harder and more complex than I realized 15 years ago, but in many ways, the challenge gets a lot easier when you learn to recognize its true nature. Most thinking occurs unconsciously; which means that when we pledge to change our behavior, we will forget our promise soon after. We all need to be reminded of our commitments as often as possible, because otherwise, we will revert to our old familiar patterns despite the best of intentions. It’s human nature. That’s why we all need external accountability and visual symbols in our field of view that we will see and touch often. I use alarms on my phone to remind myself of the things I need to do each day, an app to remind me to drink water, and a host of other automated systems to bug me about the things I will forget. I moved the coffee kettle down to the kitchen (out of my office) to remind myself that I don’t want to drink coffee nonstop all day. If we want to change patterns of thinking, habit change is absolutely essential.

2. The value of an opportunity is the relationship and the education.

Robert Kiyosaki, author of Rich Dad, Poor Dad, advocates “working to learn” instead of working for money. I read that book in 2002, and at the time I didn’t fully grasp what Kiyosaki meant. He tells the story of how he worked full-time as a copying machine salesman for Xerox before starting his real estate investing business, emphasizing the value of learning how to sell. I have come to appreciate that there are a lot of opportunities that don’t necessarily pay top dollar right out of the gate, but that’s not always a bad thing if you can get paid to learn a new skill, and more importantly, cultivate a new business relationship. You never know what doors might open down the road. I allowed myself to be short-sighted in the earlier years, turning away opportunities that might have been great, because I was too narrowly focused on immediate cash payment and didn’t see the big picture.

3. Cash flow comes first; following your dream comes second.

I would feel irresponsible if I didn’t follow up the preceding bullet point by emphasizing that, in all of the excitement, it’s important not to lose sight of the bottom line. Taking on projects for the sake of building relationships and education is fine, as long as there is revenue coming in to keep the lights on. That’s why it’s important not to quit your day job until you know how to make money from self-employment. If you have never been self-employed before, recognize now that you will have a whole new set of skills to learn. When there’s no boss to force you to clock in every day, it can be easy to justify a lot of unproductive activity. Mastery of time management and generating cash flow requires practice. You aren’t going to do it perfectly the first month. So make sure that you have enough financial cushion, and if you feel overwhelmed or don’t know what to do, ask for help.

4. Practice asking for what you need and offering to help when you can.

Business is a series of negotiations. We are always making asks and offers, whether money is involved or not. Relationships are not “quid pro quo” and favors do not flow equally in both directions with perfect symmetry. Sometimes, we need to be willing to ask someone to do something for us, knowing that we cannot repay the favor. Other times, extending resources to others without expectation of recompense is the right thing to do. Giving and receiving are not black-and-white. Sometimes, for example, it is necessary to charge a small amount of money for a service, at a deeply discounted price. It is not wise to overextend ourselves for the sake of helping others, nor to ask others to overextend themselves for our sake. Like any other practice, we only improve at the skill of asking for what we need through trial and error.

You can’t change your thinking by reading books, listening to tapes (I’m dating myself a bit; I remember when they used to literally be cassette tapes), and going to weekend seminars. All of these things are helpful, but only within their proper context. Real self-development happens on the job, at the dinner table, at the bus stop, and in all of the countless day-to-day moments where life comes at us with choices. Studying is only useful to the extent that we apply what we study. But we all need to read and study regularly. I have observed that I feel the strongest resistance to learning the very subjects I most need to learn.

I decided to move into coaching, in a nutshell, because everything I’ve laid out here is easier said than done. I’ve only scratched the surface in this short blog post, and there are many more layers to the onion. Regardless of how you go about building your dream, just recognize that the sooner you ask for help, the more quickly you will make progress. Shoot me an email at dave@dave-baldwin.com if you’d like to explore the possibility of working with me.

Do You Really Need that Software Tool?

I’ve heard the same story many times, and it goes something like this. “They told us we needed it, so we bought it. We paid an expert to set come in and set it up for us and train us. Here we are six months later, and we’re still not using it. We don’t even really understand what it does, but we were told it would solve our problem.”
Businesses do this with marketing automation tools, accounting software, content curation tools — you name it. Fill in the blank with any type of software you want. It never ceases to amaze me how often business owners will invest time and money on software without understanding what it does, or how it will help the business make more money.

Background

In 1997, when I first launched into my technology career prior to becoming a consultant, I worked in a high-tech manufacturing facility, which quadrupled its size and output during a short four-year period before the tech bubble burst. The aggressive ramp-up was a great opportunity for me to learn about what it takes to scale a business. Month after month, the facility continually transformed as new wings were built, as new robots joined the assembly line and management relentlessly sought to cut cycle times and reduce unneeded steps. When you produce hundreds of thousands of parts per month, finding a way to make a part one second faster has an enormous impact.
Done well, automation can boost profitability tremendously. Done poorly, it can be a disaster. In the last twenty years, I’ve seen the full spectrum in all different sizes of business. In general, I agree with Timothy Ferriss’s comment in The Four-Hour Workweek: “Never automate something that can be eliminated, and never delegate something that can be automated or streamlined.” That’s a good starting place for a business that is considering investing in an automated tool or software package.
There is one key factor that makes automation profitable (or not): bottlenecks. Eli Goldratt, author of The Goal (1984), provides the best definition of a bottleneck that I have seen. According to Goldratt, a bottleneck is “any resource whose capacity is less than the market demand placed upon it.” You can also observe bottlenecks at rush hour in traffic. The busiest street is a bottleneck. Close down the busiest street at rush hour, and traffic will back up for miles. Close down a side street with little or no traffic, and few people will even notice. A bottleneck is not a problem according to Goldratt; it’s an unavoidable phenomenon. Businesses should not try to stop having bottlenecks, but rather be aware of where the bottleneck is.
Before investing time or money in a software package (even a free trial version without a credit card), I recommend asking and discussing the following questions and being brutally honest about the answers.

Where is the bottleneck in the business?

Until you know where the bottleneck is, it is impossible to know if software will help or not. Looking at the question from 30,000 feet, think about it this way: is the bottleneck in sales, in marketing or in operations? Here’s how I break it down. You know that the bottleneck is in marketing if you are not seeing enough of the right prospects. You know that the bottleneck is in sales when you are meeting the right people at the right time, but they aren’t buying. Your bottleneck is in operations if you can’t keep up with the work. From there, it’s necessary to break down the analysis further. For instance, if the bottleneck is in sales, is it because you have one star salesperson who is stretched too thin and spending too much time pursuing small accounts? Are your salespeople spending too much time manually entering data into a computer instead of meeting with prospects?
In my experience, finding the bottleneck is the hardest and most important step of the process. In a small business, the people are usually the bottleneck. It might be the business owner, who is pulled in every direction to put out fires. In some cases, the office manager or operations manager is the bottleneck. In technology companies, developers can become bottlenecks.

Is there anything we can just stop doing (or do less of)?

Before getting trigger-happy with automation, it’s important to explore different ways to solve the problem. Are key staff members stuck in meetings all day instead of doing their most important work? Does the owner deal with interruptions all day, unable to focus on high-level objectives because there are too many fires to put out? Sometimes, the solution is to stop selling an unprofitable product or service, or introduce a price increase. Other times, the solution is to eliminate redundant process steps or reassign tasks to different team members. Automation only makes sense after the team has thoroughly explored these simpler avenues. Otherwise, the business may spend time and money to get better at doing something that doesn’t matter.

What will our workday look like after the software is integrated into the business?

If software truly solves a real problem in a business, it changes the way work is done. Whose time will the software free up, and how will they use the recovered time? What new tasks will be required each day in order for the software to do what the business needs it to do? Who will be responsible for performing those tasks, and what checks and balances will the business put in place to make sure they get done? Think of any automated solution the same way you would think of hiring an employee. The software will have a job to do, and it will need a supervisor.

What is our implementation strategy?

Any software worth implementing is going to require up-front investment. The team will need to learn to use it, and everyone will need to adopt new disciplines. There will be risk involved. Data will need to move into a new system. Resist the temptation to assume that you will be able to “plug it in and go.” Will every team member need to install a new mobile app on their phones? If the software promises to integrate with existing apps, there is a world of potential complications. For instance, does everyone need to remember to check that little check box every time they enter a new client into the system? What happens if someone forgets? The devil’s in the details.

How easily can we back out if we don’t like it?

Most subscription-based services offer a trial period. However, the trial period is only of benefit if a team fully utilizes the software during the free trial and is ready to pull the plug on the last day if needed. How much time will it take to get everything on board with the new software? If it turns out not to work, will that time be a total loss? Will you be able to export your data out of the new system? (That is a non-negotiable for me. I never even consider buying software that will hold my data hostage.)

Finally…are we hiding behind software to avoid conflict?

This reality check is worth doing at every stage. For instance, if there is a suspicion of theft or dishonesty, or an employee with a negative attitude who always has an excuse for refusing to cooperate, this needs to be handled head-on. Conflict avoidance leads to all manner of dysfunction, including the tendency to try comfortable solutions first. Bob is too busy to get his job done? Let’s try automating some tasks to free up his time. Never mind Bob’s two-hour lunch breaks, or the fact that he wastes a lot of time standing around. If a team member is not pulling their weight, people notice, whether they talk about it or not.
All of this thinking and discussion may sound like a lot of work, and it is. But it’s less work and less expense than implementing the wrong software. It’s less than the cost of losing a valuable customer, and the wrong software (or a poor implementation of the right software) can cause that to happen. For instance, the free software that everyone was in a hurry to start using might be full of security holes and result in a preventable data breach.
The connected age and cloud computing have provided us with a virtual candy store filled with distracting shiny objects. Trying out new software is fun. It’s exciting to imagine the possibilities! But will it really make the business more profitable? Only discipline can ultimately do that. Automated tools can amplify the benefits of discipline, but they are not a substitute for it.

Break it Down

In 1994, I took my first job as a burger-flipper at Wendy’s. (Actually, they started me on fries — I had to work my way up to burger flipper). I was fortunate in a number of ways to have the opportunity to learn a handful of things from that job: most especially, the keys to scaling a business. Wendy’s, like most fast-food restaurants, borrows from the same model that McDonald’s uses. As far as I can tell, their success can be attributed to one factor: they break it down

Continue reading “Break it Down”

3 Reasons Your Business Is Not Making Enough Money

Crisis Mode

Since 2007, I’ve worked with businesses of many types, and I’ve found one complaint to be universal: “We need more customers!” While many businesses are struggling due to lack of revenue, I find that the reason for the shortfall is often not what the owner thinks it is. Businesses that are desperate to increase revenues most often try solutions that make the problem worse. For instance, a business might throw thousands of dollars at an advertising campaign and receive little or no response, creating a more severe cash shortfall.

Continue reading “3 Reasons Your Business Is Not Making Enough Money”

The #1 Reason Businesses Leave Money on the Table

Cash in the grass with room for your type.

Small business owners often struggle year after year to bring in enough cash to keep things going. Operating in constant “survival mode” is draining and leads to disillusionment. Most tragically, it usually can be avoided. The irony of the situation is that we tend to ignore our biggest opportunity, even when it is sitting right under our nose.

Why do we do this? Continue reading “The #1 Reason Businesses Leave Money on the Table”

Strategies for Selling Products that Don’t Offer Immediate Gratification

Various ice cream cones.

Immediate gratification sells itself. If you’re selling cupcakes, lattes or mindless entertainment, your challenge largely boils down to getting in front of the customer before your competitor does.

On the other hand, you face an entirely different challenge if you sell family dentistry, estate planning services or life insurance. There’s no immediate payoff and no urgent reason for your client to move forward (unless they have an abscessed tooth).

Buying Motives

The key to selling anything starts with understanding why people buy it.

If there is no emergency compelling your prospect to buy today, you have two basic options. The old-school approach is to create urgency by using fear or shame. I am not a fan of this approach. The stereotypical life insurance salesman operates in this fashion (e.g. “You could die tomorrow! What will happen to your family? Just sign here.”)

The other option (which takes more work, but is worth it) is to do some detective work and figure out what makes your prospect tick. Instead of trying to create artificial urgency, discover the natural thought process that makes your prospects decide to make you a priority.

Let’s stick with the life insurance example for a moment. The insurance industry has found that typical consumers are most likely to purchase new life insurance policies (or increase their existing policies) in the wake of a major life event, such as a death in the family, getting married or the birth of a child.

Successful insurance salespeople focus on building personal relationships with their prospects. Naturally, they are in the loop when these events happen. Instead of using scare tactics to motivate a prospect to buy today, they plant a seed in the prospects mind and continue to patiently nurture the relationship, knowing that the right time will come.

Slow Pain vs. Acute Pain

It has been said that if you put a frog in a pot of water and raise the temperature slowly enough, the frog will sit there and let you boil it. People are not much different. Most people are willing to put up with a lot of pain, as long as it doesn’t come on suddenly. Surprises are jarring. When people are caught by surprise, they are quicker to spend money.

It’s easy to sell tow truck services. People are caught by surprise and they need their problem fixed immediately. By contrast, someone might complain every day about being tired or overweight, but they’ll put off dealing with it until it becomes unbearable (or until a clever marketer presses the right sequence of emotional levers in their brain).

Identifying Natural Trigger Events

When your product does not solve an urgent problem, the buying motives are not always obvious on the surface. However, people still buy for a reason, and logic has nothing to do with it. There is always an emotional motivator of some kind. For example, someone might procrastinate dental care until a close friend gets a root canal.

For example, here are a few possible trigger events for a company that sells managed Information Technology services:

  1. The internet goes down on a weekday
  2. The existing provider takes too long to respond to a service request
  3. A data breach occurs
  4. The network is crippled by a Denial of Service attack
  5. The company receives a notice that it is being sued because sensitive information was leaked

It is useful to be aware of what these trigger events are for your prospect. However, trigger events may or may not happen. They are beyond the marketer’s control. Furthermore, there is no way to guarantee that your company will be in the right place when the trigger event occurs. Many trigger events are impossible to predict (though not all).

Old-school marketers try to solve this problem with scare tactics, and as far as I’m concerned, this is not much different than the tactics employed by a mugger in a dark alley. There is a much better way to show immediate benefit.

Painting an Ideal Picture

High-performing salespeople know how to paint a picture of what life could look like. They don’t just talk about relieving pain; they show what new things become possible when the pain is gone. As Steve Jobs once said, “A lot of times, people don’t know what they want until you show it to them.” Motivating someone to buy today requires showing them what they didn’t know they wanted.

If you sell professional organizing services, for example, the key to motivating a sale is helping a prospect see what life might be like if they were more organized. Would they get their work done earlier in the day and have more time to spend with their kids in the evening? Would they finally be able to take the vacation to Europe that they’ve never had time to take?

The Pain of Missing Out

When people see a glimpse of what they could be enjoying and realize that they are missing out, they will feel discontent with their current reality. This type of pain is a positive motivator. I still remember the first day I played Nintendo at my friend’s house in 1987. My Atari 2600 wasn’t any fun after that. I was hooked. I had to have a Nintendo at my house. I imagined what it would be like to play Super Mario Brothers at home!

Creating a New Buying Experience

Your product may not be shiny or sexy. People are not naturally excited to go see the tax accountant. However, there is an opportunity here to use your creativity. You can be the same as all of your competitors, delivering the same boring product or service. Or, you can make an effort to do something distinctive.

For instance, Earl Nightengale tells a story in his classic Lead the Field about a gas station owner back in the days before mini-marts, when gas stations only sold gasoline. The owner noticed people standing in line to pay for their gas, looking around. He placed chocolate bars next to the cash register and increased sales. Over time, he began to add more items for people to buy. It not only grew revenues, but also created appeal that drew more people to buy gas at his station.

It seems, on the surface, that some products and services are easier to sell than others. In reality, every business comes with different challenges. You have an opportunity to stand out from the crowd. The key is to remember that you do not have to do business the same way your competitors do.

Even if your core product does not deliver instant gratification, you can still create a buying experience that is immediately gratifying!

Today, challenge yourself to think about what you could do that no one else is doing. What would your customers really appreciate? What could you do that they would tell all of their friends about? What would make people curious enough to pop into your office just to find out more about you?

If you’re willing to invest the effort into coming up with creative answers to these questions, you will be very pleasantly surprised.

Why Business Owners Undervalue Their Time and Expertise

incandescent lamp which is located inside the color gears

Being underpaid is quite possibly the number one issue affecting the world’s economy. Many of us have been there at one time or another, working long hours and having to beat the pavement just to find enough low-margin work to scrape by for one more month. The symptoms vary on the outside, but one thing is always the same: a persistent feeling of overwhelm and frustration. Worse yet, there’s the feeling of resentment that comes with doing work for an unappreciative or demanding client.

The Source of the Problem

At the root, business owners who are not paid well tend not to recognize the value of their own expertise. Many people believe this to be a self-esteem issue, but I disagree. In my experience, it is possible to overcome this problem regardless of how you feel about yourself. You don’t need to believe that you “deserve” the money; you just need an effective approach to winning the business, and school doesn’t teach us how to do that.

The real problem, as I see it, is “the curse of knowledge.” When something becomes second-nature, we tend to forget how difficult and painful it was before we mastered it. We don’t think about standing up or walking; we just do it. But for a toddler learning to stand for the first time, it takes every ounce of mental energy just to avoid falling down. You have forgotten more about your craft than your client will ever know. What seems obvious and elementary to you may feel overwhelming and intimidating to the client who can hire you.

Even highly-confident individuals have to deal with the curse of knowledge. In fact, confidence is a liability when it comes to dealing with this problem. When we fail to recognize how wide the gulf is between our knowledge and our prospect’s knowledge, confidence comes across in a way that feels insulting to the person sitting across the table. It’s also easy to make a client or a prospect feel stupid, or too embarrassed to ask the questions on their mind. This is lethal for business.

When we act as if what we do is easy, it can create erode the perception of our value. The prospective client may start to think, “I can just do this myself.”

Breaking the Curse

The solution is simple; teach what you know. How you teach is up to you. You can apply to become an adjunct professor at a community college. You might create an internship or an apprenticeship. You could put together a workshop for small businesses. Regardless of the method, the idea is to learn the skill of transferring your knowledge. There are two important reasons for this.

First, when you teach your skills, you gain a new appreciation for how much you know. You begin to realize just how much there is to explain. When you watch someone else navigating the same learning curve that you’ve long since mastered, you become more conscious of how hard it was once for you. This gives you a more useful perspective on how much you should be charging for your service.

Second, when you begin teaching your skills, you gain the ability to duplicate yourself. This creates scalability and credibility as a business. You are no longer one person wearing all of the hats; you’re a true business owner building an enterprise.

Challenge yourself to start teaching what you know. You may be surprised at how quickly your income starts to increase.

4 Reasons Your Small Business Isn’t Ready for Social Media

Social Media

Contrary to popular belief, social media is not the silver bullet to cure all ills. It is not guaranteed to bring you customers, nor does it necessarily make your business look more credible online. Different seasons call for different solutions, and I have never been a believer in selling one-size-fits-all marketing solutions. In fact, I often talk people out of implementing social media.

You aren’t following up with the prospects you already have.

If you have been in business any length of time, you most likely have a gold mine of prospects sitting right in front of you. This includes your past customers, current customers who could be spending more, your professional network, and the people who once expressed interest and didn’t move forward. If you have not implemented a follow-up system to nurture these leads, social media is not likely to move the needle in your business—nor is any other marketing tool. Any lead generation vehicle is only as good as your ability to follow through.

You’re priced out of the market.

Sadly, small business owners often fail to do even basic market research before launching new ventures. If the value that you deliver can easily be obtained elsewhere for a lot less, you’ll likely just spin your wheels on social media and generate a lot of web traffic or initial interest that doesn’t translate into closed business.

You don’t have the capacity to handle more customers.

This is a bigger problem than many small businesses think it is. If your phone rings more than 6 times before someone answers it (or if prospects are directed to a voicemail box)—or if you’re telling prospects that you can’t meet with them until next month, you have a capacity issue. Your overhead or labor cost may be too high, or your prices may be too low. Your delivery system may be inefficient. But if you’re putting in 12-hour days just to keep up with the workflow, social media is not going to fix that problem.

You have an unclear marketing message.

If it takes you an hour to explain what business you’re in, social media will do you more harm than good. Putting out an inconsistent or incoherent message makes your business look sloppy, unprofessional and even unstable. If you cannot articulate what you deliver in one to three concise sentences, don’t talk about your business on social media until you can.

In order for social media to generate sales leads that convert into paying customers, your business needs to have a solid foundation in place. If any of the above sounded familiar and you’d like to do something about it, give me a call.