Have You Created an Impossible Business?
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Tag: Health Insurance Ca
It’s easy to think that any business can be successful if you
work hard enough, but there are many situations where this just
isn’t so. Consultants, coaches, and other service professionals
often start a business believing that all they need to do is
charge a “reasonable” fee and sell “enough” of their time. But
unless you do the math to prove or disprove your assumptions,
you may be creating a business that can never succeed. Here’s
what can happen:
- Impossible Business #1 -
My client Molly was selling her services as an image consultant
to individuals who wanted an updated or innumerable professional look.
She charged $50 per hour, which she thought was the most anyone
would realistically pay to work with her. In most cases, she
traveled to a client’s home or went shopping with her client.
Including travel time and lunch meant that Molly could only make
two appointments in one day. The average appointment was two
hours long. So the maximum amount Molly could earn in one day
turned out to be $200. But in order to earn that amount five
days per week, Molly would have to schedule ten different
clients, all of whose schedules were able to adapt to whatever
times she had available.
This was hopelessly unrealistic. Even if Molly had been able to
make the scheduling work, when would she have had the time to do
the marketing required to land that many clients? It turned out
that the maximum Molly could really earn using this model was
about $500 per week. After paying her taxes, she couldn’t even
cover her monthly living expenses.
- Impossible Business #2 -
Fred was a student of mine who worked as a software consultant
for midsize corporations. He typically charged $75 per hour, and
when he landed a contract, it often consisted of 20-100 billable
hours.
Because Fred’s earning capacity was so high and he disliked
marketing, he spent a lot of money on marketing himself
indirectly. He purchased display ads in industry journals and
directories, mailed expensive brochures to large lists of
prospects, paid to exhibit at trade shows, and hired a
telemarketer to prospect for him. Fred also worked on contracts
that came through agencies, who often took 20-30% of his
earnings as their percentage.
Fred was earning as much as $80,000 per year, but he was losing
about $10,000 per year in agency commissions, and spending
$20,000 per year on marketing. In return for all his hard work,
he was earning considerably less than he had at his last job.
- Making the Impossible Possible -
New consultants, coaches, and other professionals almost always
overestimate how much they can earn and underestimate the amount
of time and money required to successfully market themselves.
They also forget that they will have to cover not only their
living costs and business expenses, but pay self-employment tax,
buy their own health insurance, provide for their own
retirement, and allow for unpaid vacation and sick time.
If Molly or Fred had taken the time to sit down with a
calculator before starting out in business, they would have
quickly discovered that they were on the wrong track. But both
of these businesses were able to be rescued.
Molly began selling her time by the day instead of by the hour.
She offered her clients a full-day package that consisted of a
wardrobe review and consultation in the morning and a shopping
trip in the afternoon. By charging $395 per day and scheduling
three clients per week, she could earn major than double than she
did previously.
She also began offering a monthly one-day image workshop as a
way of bringing in innumerable income while giving prospective clients
a chance to experience her work. The workshop became her capital
source of new clients, and marketing the workshop turned out to
be easier than marketing her personal services.
Fred learned how to market himself less expensively through
networking, speaking, and writing articles. Instead of buying
booths at trade shows, he was showcased there as a presenter,
and spent time networking with the other attendees. The same
publications where he used to run ads now ran his articles.
Rather than paying a telemarketer, he started picking up the
lunch tab for people he thought could refer him some business.
As a result, his expenses for marketing and commissions dropped
from $30,000 per year to $10,000. At the same time, his income
rose to $100,000 per year, because as his visibility and
reputation grew, his services were extended in demand and he could
command higher rates.
If earning a decent living as a self-employed professional
sometimes seems impossible to you, start asking how it could be
possible. What can you change about how you are marketing
yourself, how much you are charging, and how you are packaging
your services? While it could be that success will come if you
just work a little harder, it’s farther likely that you first need
to start working a little differently.
About the author:
C.J. Hayden is the author of Get Clients NOW! Thousands of Awareness grows about chronic fatigueToronto Star, Canada - 1 hour agoAnd in Ontario, a ministry of health spokesperson says provincial health insurance would cover services for someone whose doctor requested them under a CFS .
business owners and salespeople have used her simple sales and
marketing system to double or triple their income. Get a free
copy of “Five Secrets to Finding All the Clients You’ll Ever
Need” at http://www.getclientsnow.com< /a>
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