One of the complaints I hear from people is that they think I don't understand how hard it is to do business out in the "real" world. Well, let's just say that's absurd.
One of the big fallacies that small business owner fall into is the belief that You Have to Take Every Job You Can - especially when you're small . . .
Or especially when you're starting out . . .
Or especially when the economy is bad . . .
Or especially in your (poor) city, county, state, province, etc.
This false belief is never true. Never. Ever. Ever. So why does it persist? There are several reasons.
First, please acknowledge that you never think this is true unless you are feeling desperate for money. When you sign a good contract, you don't think you have to take every job from every one who offers you work.
This false belief tends to be inversely related to sales - including attempted sales. When you are out selling yourself, you tend to be in the middle of a number of conversations that focus on what you have to offer and the problems you can solve for clients. Both of those help you to have a clear picture of the value you bring to a client engagement.
This false belief is based on a mentality of poverty. Oddly enough, acting on the false belief that you have to take every job will result in permanent poverty. When you are desperate and will take anything offered by anyone, you will never be a professional and you will never sell from a strong position.
This false belief will lead you to cut your prices and keep you below the industry average in your area. This under-valuing yourself can become a self-fulfilling prophecy.
Imagine two kids who come to your door selling cookies. Kid One says, "You don't want to buy any cookies, do you?" And no matter how cute the smile, your answer is, no.
Then Kid Two says, "I am able to offer these amazing cookies for just one week. I promise you'll love them. How many can I put you down for?" There's no guarantee you'll buy - but at least you'll consider it.
This false belief will lead you to take on cheap clients who will never hire you for big jobs. In fact, they won't even ask you to bid on good jobs. And when you ask why, they'll say that they rely on you for the little stuff.
Think about the "handy man" versus the $250/hr contractor. If you think they provide the same quality of services, you are fooling yourself. And IF that handy man has the same level of skills, he's still never going to get that rate - because he's under-selling himself!
Many one-time jobs might look like opportunities when they are not. There are clients that will only buy a couple of hours here and a couple of hours there and they will turn into "C and D clients" at the bottom of your list. They will never be "A and B" clients.
When you take on a client because you feel you have to, they will usually turn into clients that you have to get rid of one day. When you bottom-fish for clients because you feel you have to, you end up with clients who are
- Super cheap
- Super needy
- Won't ever sign a contract
- Make no commitment
- Show no respect
Just remember: You get the business you build. If you build a business based on the false belief that you have no choice, you will end up with the worst kind of clients possible.
And when the economy shrinks into a recession, these are the clients who will argue about every detail and then not pay the bill. They will rip off without a second thought. Any why not? There will always be someone else who thinks they have to compete for every single nickel they can find.
How can Morton's Steak House stay in business when Cousin Larry's Pretty Good Steak and Lobster will sell you a twelve ounce sirloin for ten dollars? Because they have no interest appealing to the bottom end of the market.
You get the business you build. You get the clients you attract.
Please don't choose to under-value your business because you think you have to.