The quest for more clients. It's a common, never ending journey for many small business owners, especially those in service-based businesses. While clients are vital, there are some nuances that you might be missing when it comes to scaling your business profitably.
You may think that clients are the cure to all your business problems. If you are just starting out, clients are vital to the longevity of your business. But as you progress on your journey, there will be a moment in time when getting more clients will no longer cure all the problems in your business.
Here are the 3 key signs that getting more clients isn't the answer you are looking for.
#1 More Clients ≠ More Money
There will be a point of diminishing returns in your small business, where more clients no longer brings in more cash. While your top-line revenue or sales may see an increase, no cash is making its way to the bottom line. This means that even though you're bringing on more clients, the money you bring in does not go in your pocket—in other words, clients start COSTING you money!
If you have ever had the 'busiest' month of your life and are fighting to make payroll at the end of the month, you are solidly living this business truth.
This happens because your pricing isn't geared to be profitable, which forces you to go 'get more clients' which is more work than there are hours to work. When this happens, the balls start getting dropped on project work, which leads to disappointed clients who don't want to work with you - meaning now you need even MORE clients. This is what we refer to as growing yourself out of business or growing broke.
Entrepreneurs typically try to spend their way out of this problem and go on the search for more clients. This begins to create a situation where the money is flying out the door faster than it is coming in the door. You gain more clients, but you don't solve the problem.
To break this cycle, you have to slow down in order to move forward. A critical review of pricing and packaging is the first step. The goal is to be profitable with the least number of clients, not the most.
#2 There's No More Time to Serve More Clients
Busyness does not make for a good business. Scaling a business is a constant management of your most valuable resources, time and money. This means being productive, efficient and leveraged in your use of time. Busy just doesn't foot the bill, but it is the bill of goods most entrepreneurs are sold as the only path or definition of success.
Compounding the problem is that 'MORE' is the go-to solution for most business owners, when it should be about 'BETTER'. If you've reached that point of knowing that you can NOT work any harder or any longer than you already do, you are not alone.
You could be looking at your $1 million dollar business wondering what you are doing it all for and whether you should just shut the business down and go corporate where you would make more and work less.
Don't despair, you can unravel the web that has been woven to create the busy trap.
First, your attitude needs to change about how the work is done and who is in control of your precious minutes.
Second, the factors impeding your progress in this area deal with productivity, systems, processes, leveraging time through automations, reproducibility and technology.
Most service-based businesses develop 'custom' solutions for their clients and therefore believe that each project requires a complete reinvention of the wheel.
However, even the most customized outcome can be generated by a process that utilizes strategies and produces a way to decrease the amount of time needed to serve clients.
The key here is doing more with less, getting more bang for your buck and leveraging your resources.
# 3 You Are Over Promising and Under Delivering
Have you ever felt like one of those performers who dash between spinning plates, trying to 'wow' the crowd by how many plates you can have spinning? What starts out manageable quickly becomes chaos as plate by plate comes crashing down to the ground.
Sustainability in delivery should be of the utmost concern when it comes to scaling your business.
Imagine you have a brand new Great Dane puppy. It is as cute as it can be. You pick it up, set it in your lap as you rub its head. Now imagine doing that when the Great Dane weighs 150 lbs and is the size of a small pony. The habit isn't sustainable.
Entrepreneurs can have the habit of serving in an unsustainable manner to try to prove their services are worth purchasing. In the early years, this becomes harder as you've likely been saying 'yes' more than 'no' to the client requests. (Insert spinning plates here.) The end result is projects are missing the mark, clients are unhappy, and you are discouraged and exhausted.
The best, and most profitable, businesses are simple. They do their one thing and do it with surgical precision. It's only after years of mastery that they even consider adding complexity. However, in the quest to solve money problems, business owners choose to treat the symptoms, not the problem.
This moment is when service based business should take a look at SaaS companies. These businesses do not launch with the creme-de-la-creme version first. They launch with version 1.0, get the bugs worked out and get to audience critical mass. Then they look at version 2.0. The lesson here for service-based business is not to add too much complexity too soon.
Your business needs to deliver the best product you can sustainably deliver at 10 clients, or 100 clients, and you need to stay in your lane while you master the ability to do so.
It's the fear (and sometimes the nearly empty bank account) that has you jumping on every opportunity and client that comes your way. This is a dangerous cycle to get stuck in. It is important to realize that not all money is good money in your business.
You need to question the opportunities and whether they keep you in your lane, or detour you off course. Follow the path!
If you are looking at what your business needs in order to scale richly, get the money right first. That is the first order of business. Positive cash flow puts you in the driver's seat and gives you freedom of choice. Refine your services and the way that work is done so that the delivery is sustainable at 5x your current operating level. That gives you profit and scalability. Stay focused in your lane for as long as it makes sense.
While you will always need clients in your business, they should not always be your primary focus. As your business evolves, your systems should be reliably producing clients in your business so that you can put your attention to scaling your business.
"Steal the mesh underwear you get from the hospital," a friend said upon learning I was pregnant with my first daughter.
It was the single best piece of advice I received before giving birth in December 2013. My best friend delivered her daughter eight months previously, and she was the first to pass along this shared code among new moms: you'll need mesh underwear for your at-home postpartum recovery, and you can't find them anywhere for purchase. End result: steal them. And tell your friends.
My delivery and subsequent recovery were not easy. To my unexpected surprise, after almost 24 hours of labor, I had an emergency C-section. Thankfully, my daughter was healthy; however, my recovery was quite a journey. The shock to my system caused my bloated and swollen body to need weeks of recovery time. Luckily, I had trusted my friend and followed her instructions: I had stolen some mesh underwear from the hospital to bring home with me.
Unfortunately, I needed those disposable underwear for much longer than I anticipated and quickly ran out. As I still wasn't quite mobile, my mother went to the store to find more underwear for me. Unfortunately, she couldn't find them anywhere and ended up buying me oversized granny panties. Sure, they were big enough, but I had to cut the waistband for comfort.
I eventually recovered from my C-section, survived those first few sleepless months, and returned to work. At the time, I was working for a Fortune 100 company and happily contributing to the corporate world. But becoming a new mom brought with it an internal struggle and search for something “more" out of my life--a desire to have a bigger impact. A flashback to my friend's golden piece of advice got me thinking: Why aren't mesh underwear readily available for women in recovery? What if I could make the magical mesh underwear available to new moms everywhere? Did I know much about designing, selling, or marketing clothing? Not really. But I also didn't know much about motherhood when I started that journey, either, and that seemed to be working out well. And so, Brief Transitions was born.
My quest began. With my manufacturing and engineering background I naively thought, It's one product. How hard could it be? While it may not have been “hard," it definitely took a lot of work. I slowly started to do some research on the possibilities. What would it take to start a company and bring these underwear to market? How are they made and what type of manufacturer do I need? With each step forward I learned a little more--I spoke with suppliers, researched materials, and experimented with packaging. I started to really believe that I was meant to bring these underwear to other moms in need.
Then I realized that I needed to learn more about the online business and ecommerce world as well. Google was my new best friend. On my one hour commute (each way), I listened to a lot of podcasts to learn about topics I wasn't familiar with--how to setup a website, social media platforms, email marketing, etc. I worked in the evenings and inbetween business trips to plan what I called Execution Phase. In 2016, I had a website with a Shopify cart up and running. I also delivered my second daughter via C-section (and handily also supplied myself with all the mesh underwear I needed).
They say, “If you build it, they will come." But I've learned that the saying should really go more like this: “If you build it, and tell everyone about it, they might come." I had a 3-month-old, an almost 3 year old and my business was up and running. I had an occasional sale; however, my processes were extremely manual and having a day job while trying to ship product out proved to be challenging. I was manually processing and filling orders and then going to the post office on Saturday mornings to ship to customers. I eventually decided to go where the moms shop...hello, Amazon Prime! I started to research what I needed to do to list products with Amazon and the benefits of Amazon fulfillment (hint: they take care of it for you).
Fast forward to 2018...
While I started to build this side business and saw a potential for it to grow way beyond my expectations, my corporate job became more demanding with respect to travel and time away from home. I was on the road 70% of the time during first quarter 2018. My normally “go with the flow" 4-year-old started to cry every time I left for a trip and asked why I wasn't home for bedtime. That was a low point for me and even though bedtime with young kids has its own challenges, I realized I didn't want to miss out on this time in their lives. My desire for more scheduling flexibility and less corporate travel time pushed me to work the nights and weekends needed to build and scale my side hustle to a full-time business. If anyone tries to tell you it's “easy" to build “passive" income, don't believe them. Starting and building a business takes a lot of grit, hustle and hard work. After months of agonizing, changing my mind, and wondering if I should really leave my job (and a steady paycheck!), I ultimately left my corporate job in April 2018 to pursue Brief Transitions full-time.
In building Brief Transitions, I reached out to like-minded women to see if they were experiencing similar challenges to my own--balancing creating and building a business while raising children--and I realized that many women are on the quest for flexible, meaningful work. I realized that we can advance the movement of female entrepreneurs by leveraging community to inspire, empower, and connect these trailblazers. For that reason, I recently launched a new project, The Transitions Collective, a platform for connecting community-driven women entrepreneurs.
As is the case with many entrepreneurs, I find myself working on multiple projects at a time. I am now working on a members-only community for The Transitions Collective that will provide access to experts and resources for women who want to leave corporate and work in their business full-time. Connecting and supporting women in this movement makes us a force in the future of work. At the same time, I had my most profitable sales quarter to date and best of all, I am able to drop my daughter off at school in the morning.
Mesh underwear started me on a journey much bigger than I ever imagined. They sparked an idea, ignited a passion, and drove me to find fulfillment in a different type of work. That stolen underwear was just the beginning.