In 1975, Gary Dahl created the perfect pet - the Pet Rock. In six short months, he sold 1 million Pet Rocks, then the fad died. You see, the Pet Rock did not really solve a customer’s problem – it was just a cute idea. On the other hand, the over-the-counter pain killer market exceeds $ 50 billion annually. The point is people will pay to remove or alleviate pain from their lives, while “Pet Rock” sales fade away.
As business owners, we want to serve clients well, generate incomes for ourselves and our employees and hopefully build a company that has real value when we decide to leave.
In the first chapter of his book, The Boutique, author Greg Alexander encourages owners seeking to grow their business, that the very first thing they need to do is define the problem they solve for clients – and how do you address their pain? If you can deliver the right “painkiller” to the right “patient” you will be on the right path. Here are a few simple steps to help you focus on Greg’s advice and ensure you can continue to provide meaningful services in an ever-changing market:
1. Define What You Sell – You started your business with a service or product that someone was willing to pay you for. Most growing businesses’ initial service offering evolves into a few (or perhaps many) services. This mixed bag of services gets categorized on company financial statements as a single line of Revenue – “sales” or “services”. You need to clearly define what you sell. Examine the “types” of services you offer and define what is different about each – ie – what types of pain killers do you offer?
2. Does The Product Solve The Problem? Every product or service should solve a client’s problem. Do your clients and potential clients agree that they actually have the problem you are seeking to solve, and do they feel that problem is big enough to take action? Get clear on who has the problem your services solve.
3. What You Do Best – Now identify what you do best (or could do best). Identify the service offering that will be most sellable, easiest to scale, and most profitable. This requires examining your current/past work and answering the following questions:
a. Is my service delivery efficient? Can I make it more so?
b. Does my market have significant growth potential?
c. What is my most profitable product? What is in greatest demand?
d. Am I selling to the right clients?
e. Do I have the right marketing and sales force to make it happen?
4. Commit to Action – After answering the above questions, you should identify specific steps to move in the direction needed. You will need to invest time and funds to make the changes needed. This may include:
a. Adding staff – particularly sales and marketing
b. Narrowing or re-focusing your target clients
c. Investment in systems to optimize your product delivery
d. Delegating the least important parts of your role so you can focus on the most important things.
e. Re-aligning your accounting to track sales and profit by product
f. Get the professional support you need to make the change.
Change is hard, and any change like this will take time. But, make a plan, define where you think you need change and then act. Do “90-day sprints”, assess your progress and your assumptions and adjust course as needed. At a minimum, annually repeat the above exercise. Over time, you’ll experience the satisfaction of helping your clients alleviate some of the “pain” in their lives while building a company more scalable and valuable.