How Not to Make Money in Your Business

You know the expression, one bird in the hand is worth two in the bush? As a child I couldn’t figure it out, and to be honest, now that I get it, I couldn’t disagree more!

When it comes to business, too many of us go for that one bird, because it’s within our grasp, we can see it, and we think there’s no need to look for others.

The thing is, for your business to be sustainable and to thrive, you need more than one bird. You most likely need more than one bush, too.

When I work with clients one-on-one or in a group, I encourage them to build a menu of carefully chosen products or services. Whether you call it having multiple streams of revenue, or giving your customers options, it amounts to the same thing: you’re not putting all of your eggs in one basket. You’re not focusing all of your energy on catching one bird.

This is especially important for new businesses or those in the early stages. Your business can only grow if you are doing a good job of marketing, have a clear market, and have enough clients! So having a limited choice to offer them, and leaving the rest up to chance is not a good plan.

Here are some examples of what NOT to do.

Have one service only, and offer it at an hourly rate.

Many business owners who offer professional services put out the open for business sign without really thinking of what choices they can offer. Instead they offer a single service at a single rate, usually hourly!

There are some big flaws to this approach, but for this article, I’ll stick to one. When you do this, you’re automatically limiting your revenue to whatever the maximum amount of clients you can accommodate is multiplied by how many hours you can work for them.

And, this assumes you have a full schedule of ongoing clients. Here’s the problem: you can’t guarantee those clients are going to stick with you, and you have no way to produce more income unless you clone yourself, hire someone to help you (that’s if you have set your rates high enough to accommodate having to pay someone else) or work more. But if you spend all of your time working, you aren’t marketing, so you’re not likely to get any more leads, and you’re not really running a business. You’ll soon feel like an employee again, and you probably won’t be making that much either.

Have a low priced service as your only service.

Many business owners, especially new ones, think they’ll be more competitive by keeping their price low. Or they underestimate their true expenses, and set their prices too low to be able to make a profit. Or they underestimate their value, for other reasons – not understanding the market, or not feeling they’re able to charge more. Another example is the aspiring online business owner who has visions of selling hundreds of $19.99 digital products like audios or ebooks. In 99% of these examples, it’s a recipe for failure, because it takes a massive amount of steady, fresh, qualified leads to turn into sales. If your business plan is based on quantity, you’d better be aware of the time and money it’s going to take you to keep attracting new clients.

Offer a service that has a short lifecycle.

Another variation on this is when a business is based on services that have a quick turnover, for example, a  coach or trainer who offers single sessions or short term arrangements. If you set up your business model like this, you need to have an ongoing pool of prospective new clients to generate continual revenue in your business. It’s a lot of work to get new customers, and if you have nothing else to offer them when you’re done, you need to get new ones. The same rule applies for product-based businesses.

So what’s the answer?

In all of the above examples, you can see that the only way to keep the cash flow moving is to keep the new business flowing in, and that it is going to take a lot more leads to get new customers than you may have thought.

Each and every business on this planet depends on continual and consistent marketing, and that’s a given. So it’s going to be a smarter plan to create a range of services that you can offer to your existing clients, while also bringing in new ones. Keep your structure of options clear and simple, so that it is really easy for someone to choose you to do business with. Have different price points, and durations of programs to appeal to new customers, as well as existing.

But remember that it’s better (and far easier) to attract and keep more birds in the bush, than it is to hold one in a death grip.

Want to use this article? You can as long as you include this footer: Sherri Garrity is the Chief Corporate Fugitive and creator of the Five Keys Success SystemTM for ex-corporate employees and aspiring entrepreneurs who want to break free from the confines of their corporate experience and live outside of the ordinary. The Corporate Fugitive system demystifies the business of setting up, managing, marketing and growing a successful and extraordinary business. Visit www.corporatefugitive.com for information and step-by-step resources to take you from overwhelmed employee to extraordinary entrepreneur.