Imagine you own a massively profitable business.  And you have a comfortable lifestyle - you have both money AND time.  As a cherry on top, the valuation for the business is pretty good too!  If you do decide to sell it, you will be looking at a nice retirement nest egg.  You can officially, finally, go on that around-the-world cruise you have been talking about.

How far are you from there? One year, five years, … or forever?

I have been asked by many new clients, especially business owners that just start out, who want to save on taxes.  Who doesn’t?  I applaud them for taking risks and control of their own financial future by undertaking entrepreneurial ventures.  And the foresight to keep profits in their pockets. 

But…

They are not profitable yet, which means there is no tax to pay on the non-existent or minimal profit.  To some, this is the end goal – enough cash from the businesses to live on and zilch to the Big Brother.

However, many entrepreneurs want to make it big - because then all the time and effort and risk-taking are being rewarded.  Then the critical question is – how do I grow the revenue?  Without sacrificing quality of life?

Majority of small business owners are service providers with a side hustle of product sales.  Which is not surprising, as US economy is mainly service orientated.  I will do a separate post on growing revenue in a product-selling business; but for now let’s focus on service providers. 

The first question is what clients are we trying to serve? If you are serving everyone, which is never a good strategy to begin with (as we can’t please everyone), we are probably offering the wrong services, with the wrong price points, to some, if not all, clients.    

After you have a target group of clients that you can sell to, do you have a checklist to select those dreamy ones?  You know, those you want to work with, who want to work with you, and perhaps most importantly, who can pay for your services? 

Here is my suggested checklist for selecting your ideal clients.

1. Does the client need high-margin services that you provide?

If not, I would highly suggest you skip.  Low-fee work can easily become commodity and outsourced to lower-cost areas.  And a lot of competition exists because it is easier for any new entrants to compete in this low-price space (though it is hard to survive!).  You will soon, or you already do, realize that you are working way too hard for way too little.

2. Can the client provide sustainable monthly retainer payments?

Can you demonstrate your expertise, knowledge and information that is ongoing? That the client is better off working with you than not?  If your service is asked for by clients once in a while, can you provide periodic knowledge update that help clients to do or be better continuously?  Think of routine check-up for your car to prevent major break down.  Can you help your clients in small way all year around so that they can avoid major headache down the road?

3. Does the client want to grow with you and your service offering?

After you have successfully demonstrated point #2 above, you are firmly established in the best position to show you can impact a client’s bottom line, take away his or her worries, or improve his or her quality of life.  You probably will have grown in your own expertise as well by evolving along with more clients served, then you can develop and sell upgraded services/knowledge/information.

Sabina, you said, I can’t afford to be selective right now, I need time to build to the point of selling to the target group that pays premium pricing.   What are some other ways for me optimize my current situation?

I understand your business is an evolution, so here, ask yourself the following questions.

1. What are the high-margin services you sell, even to everyone at the moment?

2. Can you sell more of such services without drastically increasing staff or overhead costs (thereby increasing your own stress level, and sacrificing quality of life again)?

3. Is it possible to make your services into products?  For example, group your consulting sessions into a “curriculum”, or bundle up a few value-added car maintenance services into a package that give you more margin incrementally?

4. Do you want some new perspective, bettery yet, actionable steps gleaned from successful businesses in your industry to drive your own business growth?

You can wait and do nothing, but inaction has a hidden cost of not getting what you want.

Or, you can kick your gears up to the next level now, by working with a business advisor well-versed in small business in your area, so that you can be on a fast track to more revenue and more profits.

Which option will you choose?