As we slowly head toward a post-pandemic world, now is a great time to revisit some of the fundamentals that can make or break your business.
As a small business consultant, I hear many challenges that owners and managers face. If you’ve been running your small business for awhile — maybe 3, 5 or even 10 years or longer — you know the challenges never stop, no matter how successful your business is. Perhaps you’ve had some small business consulting services or a business coach in the past and had mixed results. At this point, you may question if these people can really help you. The answer is yes, if you find the right one for you. Consultants and coaches have a variety of backgrounds and styles. Just like finding the best long term employees for your business takes time and some failures, you have to persevere with finding the best guidance and support for you as you build your business. And just like with employees, the search is well worth the effort.
How a small business consultant can make you money
Keep in mind, a small business consultant has to make you money. It probably won’t happen right away because it takes time for the consultant to get to know you and your business. It also takes time to start implementing their advice. But over the course of the first six to twelve months, you should see clear benefits. And it may be that you only need a few months of help regarding a certain stage of your business development, or certain issues you are facing.
Sales versus margins
One thing your consultant can do is help you analyze your profit margins. Most business owners know that maintaining a healthy margin is important, but, perhaps surprisingly, a huge percentage of business people lose track of this key principle and start to think of sales volume as the holy grail. Sales without healthy margins hurt you and have run many a company completely out of business. It’s always good to review the fundamentals, because that is where many business owners start to slide off the track.
However, making money is about a lot more than margins of course, so read on!
Value based fees and pricing
Another aspect to healthy profits is using value based pricing. For service businesses, your clients and customers can actually be happier with values based pricing using set fees versus hourly rates. And – you can make a lot more money. Your client is happy and you are happy. High quality small business consulting services can help you craft a successful values based pricing approach. One of my clients recently landed her first values based pricing client. Her fees are higher and the client is excited about working with her firm.
In this era of perpetual recession it can be tempting to undercharge just to get the business. While you do need to make payroll, it is more often than not a losing proposition to try to be the low bid. Better to charge above average prices and do a good job on the sales end with your value proposition. Having a lower price than anyone else is not better, unless your customers are buying the exact same product or service with the exact same guarantee, delivery terms and everything else. But it’s never exactly the same. You are different and hopefully better in some way, and you have to educate your prospects about this difference.
When the economy is bad, the temptation to slash prices is great. You need to do a thoughtful analysis before deciding if that makes sense. Your consultant can help. A few years ago, one of my clients was struggling with whether to raise his prices a mere 2%. He hadn’t raised them on his products in over four years. He was really worried about it. In the course of our conversations, I helped him realize it would be OK and was the right and necessary for his business thing to do. And it did work out fine. Sales continued to grow and his bottom line was better.
Making successful strategic decisions every day
You probably face the need to make strategic, along with tactical decisions, every day. Many small business owners are very used to making these decisions quickly and often on the fly. When they work with a consultant, they find that the stress of this decision making decreases and the quality of the outcomes increases. Having a trusted, experienced adviser in your court really helps to decrease the stress of decision making which is all on your shoulders. Employees, spouses and friends rarely have any idea what it is like to own a business and the responsibility that is on your shoulders. Instead of it being all up to you, with an adviser who has been in business themselves, you ‘ll have someone you know and trust to discuss the situations and options and help you make the best decisions for your business.
How business consulting can help you get control of your schedule
These days, we know that the most valuable commodity is time, not money, most of the time, no pun intended! Your small business consultant should be able to give you immediate and ongoing tools and help to get control of your schedule and your to-do list. No one system fits all when it comes to time management, though I do recommend the general principles, strategies and tactics taught by David Allen in his highly regarded book, Getting Things Done.
Download your brain for greater sanity & control
Per Allen’s principles, I encourage my clients to download every single thing in their head into trusted buckets or containers/places/lists/software where they can retrieve them when needed. Carrying stuff around in your brain is a waste of your talent and energies. Your brain bandwidth should be reserved for solving problems and creating the next steps forward for your business, not for remembering stuff! A weekly review of all your projects is also crucial for feeling in control and on top of your business.
So, is small really beautiful?
Despite our culture’s mantra, bigger is not always better. Michael Gerber, in his famous book, The E-Myth Revisited, states that the purpose of a business is to grow it and sell it. There’s nothing wrong with that, and indeed it has been the path of many successful business owners.
However, it’s not all about money. One of my favorite books is Small Giants by Bo Burlingham. It’s about how maverick companies have passed up the growth treadmill and focused on greatness instead. Companies like Anchor Brewing, Clif Bar, and Union Square Hospitality Group, which operates 10 of the finest restaurants in New York City.
On April 17, 2000, Gary Erickson, who started Clif Bar in his mom’s kitchen in 1991, decided against a $120 million sale to Quaker Oats, choosing to remain private, in part to keep the focus on its eco-friendly practices, such as sustainable agriculture and waste reduction. He wrote in his memoir, Raising the Bar: Integrity and Passion in Life and Business, I was about to become a very rich man but I felt nauseated constantly and hadn’t slept well in weeks. He realized he could not sell his company. Clif Bar has continued to be a highly successful business, but on his terms, not a big corporation’s.
If being a great company with a fantastic culture, happy and productive employees, excellent bottom line and positive impact in your community is what you are after, then a small business consultant can help you achieve that. Whether you have 3 employees, 30, or more, your business needs reflect your values, dreams and mission, and it needs to work for you.