This week I was struck by the number of conversations I was part of, where business people (or entrepreneurs-in-waiting) minimized their ideas because they seemed too big, too audacious, or too outrageous. They had things they wanted to do, or to try, but they thought it would be better if “someone else did it first”. They wanted to create lists, and accountability check-boxes to go with them. They also had experienced failure before, or they were nervous about taking a risk, or making a mistake. Reflecting on this, I realized that there were three things that were consistently at the root of the problem.
The first issue was wanting accountability, instead of taking responsibility. I can’t explain this any better than Seth Godin already did in his blog, here.
The second was that even if they did set goals, they weren’t SMART goals. I’ve known about SMART goal-setting for a long time. Such a long time, in fact, that I am consistently surprised when someone fails to use this approach. Simply put, your goal needs to have each of the following elements:
See how the language became more focused and positive? This is how we can make things happen.
Lastly, a number the people I interacted with, were willing to let themselves “dream small”, because they could only see the big audacious goal, but didn’t know how to break it into small, manageable, do-able steps. “Every journey begins with a single step” may be a cliché, but in every old adage there is truth. My top tip of the day for this is to begin by imagining you’ve achieved the goal, and work backwards to see the steps you need to get there. It’s much easier to figure out the path, if you have in your mind that the success is already yours.
What's standing between you and your big, hairy, audacious goals? Would you like more inspiration and accountability for your business? Stay tuned for announcements about upcoming webinars, courses, or coaching programs by subscribing below.
Everyone wants a bargain, even you. But think back to the last time you went shopping for something important, or where quality mattered. You probably looked for the best price, didn't you? Then you looked at other models or versions that would do the same job. Eventually, you may have even settled on something slightly (or a lot!) more expensive. Why? Because of value. There was something about that other version you eventually bought, that you valued more than low price. Low price is, and always has been, a race to the bottom. If you compete only on price, and not on value, someone will provide a solution that costs less than yours.
So what to do? In our 5x5 Sharper Focus Business challenge, we prompt participants to think about one strategic question every day, like what is the value you deliver, that will ensure your client or customer is willing to pay more for what it is that you sell? Bain and company studied the elements of value, to take the guesswork out of it. They found there was a pyramid of value, much like Maslow's Hierarchy of Needs. Customers want value in one of four areas:
“Ugh, management by committee. I just couldn’t get them to make a decision. It was like herding cats!” Even if you think of yourself as a decisive person, working with a team can make choosing seem much harder. There are so many more opinions to hear, and so many more options that may be put on the table. Add to that, money, impact on people, fuzzy objectives or incomplete information, and you can end up with a real headache on your hands. We’ve discovered five essential steps to keep every decision-making process on the straight and narrow.
Judging by the box room in our condo building, you'd think that everything was shipped by courier or post, but we have a saying around here: "It's hard to ship hot soup by mail". Whether you're starting a new business, or developing a new product or service for your existing business, one of the decisions you'll need to make, is what is the most effective channel to use, to deliver that product or service to your most valued customer. Taking a step back, Megann has been running a video challenge, and two things she's asked participants to think about are:
These questions don't stay static. They deserve regular review, no matter what your business. When we started consulting, we would have said the most valuable service was in-depth medical interviews, in situ in specialists' offices. And the customer who bought those was usually a pharmaceutical company with a very specialized product, like a cancer treatment. Now, the highest value services are consulting with companies who are entering new markets, on market selection, or facilitating strategic decision-making. And the clients are varied, but always scientific, technical, medical, or industrial B2B companies.
Once you have a good picture of the key product or service, and who buys it, it's time to think about how to get it to them. Are the clients remote, or local? Do they need to see you to receive the service? Can it be shipped? Must it be? Figuring that out can be a challenge, and it takes a lot of legwork to determine the most efficient and effective way. More than one channel may be needed. Determining it is a necessity, as it will be a critical part of your cost structure, as well as your value proposition. Are you the fastest? The most thorough? The newest? Each of these directly impacts your channel choice. Moreover, communicating to your customer which channel your using, may be relevant. You might think that those strategy facilitations are always in person for us, for example, but we have tools that let our clients gather together a team from around the globe, and make decisions as effectively as if they were in the same room. So keep an open mind, and find the channel that's just right for you and your MVC.
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Pricing. We can't tell you the number of times we've heard business owners or product managers wrestle with the question of how much to charge for what they sell. This can be especially difficult if you are in a service-based business, where, even if you've created packages, you're ultimately selling your time. What if the client takes longer to make decisions than you thought? What if they aren't good at deciding what they want, and their brief to you is terrible? What if they expect unlimited, time-consuming phone calls...for free?
Like every facet of your strategy, pricing decisions are ultimately on you. With a physical product, you can look at the costs associated with producing or acquiring the product, storing it, selling it, and shipping it to the customer. It's worth looking at "product you" the same way. One big mistake we see with new consultants or service providers, is that they charge an hourly rate that sounds high enough...if they're working 40 hours a week, for 40+ weeks a year. If you're a solopreneur, this simply isn't realistic. You need time to run your business, doing bookkeeping, accounting, and paperwork, or meeting or conversing with partners who do those things for you. You need time to sell to your customers (or you need to make enough on your service to pay a sales person to help). You get the picture. So how do you know the appropriate rate to charge? What if the client schedule has slippage or they delay the start of a project, so the dates when you thought you would be making the income are "missed"?
First, think about your costs - whatever overhead you have, whether it's rent, your cellphone bill, professional associations, networking meetings...the list could be endless, if you let it. Then consider how much you want to make every year, net of fees or taxes. Add it up. How much vacation will you take? How much selling time will you need? (A good rule of thumb is that you, or someone, will probably need to spend at least five hours selling for every hour you deliver, especially with new clients). Divide this by the number of hours you realistically expect to spend delivering the work. That's your charge-out rate.
What about cost overruns? You can have a series of up-charges for clients who have scope creep every time they come with a project. Truth be told, though, in most cases you want to avoid this, because the aforementioned newcomers to the market will bend over backwards for very little money, in an attempt to build their client base. Your client may come back to you after they've been stung by these inexperienced competitors, but they'll have spent their budget, and you can't get that project back. Instead, build in some wiggle room that you can live with. In our own case, we let new clients know that we have standard pricing that we apply to projects, and we estimate the scope according to their brief. When we have more experience working together, and they become a repeat customer, we will consider more favourable pricing, but we never discount out of the gate. We also explain at the start that the pricing we charge is adjusted for their second project - if they turn out to have an issue with scope-creep, we'll raise the rate we charge them in future. This means we can stand firm on the charge-out rate, and make it up on the honour system, later. Of course if there are costs that have been incurred, like space rentals, that had to be paid twice, we expect them to cover those costs.
Explaining why a price has gone up for project two isn't always easy. When you need to do this, consider using the airline seats discussion. Although they may get their weekly or monthly paycheque no matter what, as a service provider, you get paid when you work. If you have blocked time and turned down other clients for that time period, you can't "sell that seat" to someone else. The risk is that they will go elsewhere, to someone who is willing to under-charge for the work involved, but wouldn't you rather have that, and search for a client who's willing to pay what you're worth?
If you're finding it hard to make time to think about strategic questions like these, because you're so busy working in the business, that you can't work on your business, why not join our 5x5 Sharper Focus Business Challenge? One question, 5 days a week, for 5 weeks, and you'll be on your way to making better decisions. Just click the link at the top of the page!
Megann and Steve, Partners in PANOPTIKA, are working for our clients every day to help them see everything they need to know to make better decisions in their complex business environment.
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