When you’re a business owner or entrepreneur, something is always “popping up”. The cost of doing business went up, and I need to address it by adjusting my pricing. I adjusted my pricing, and now I’m losing clients so I have to focus on business development. Now I’m getting bigger clients so I need more staff. It’s like the second you fix one problem, another one crops up.
Running a business is just a never-ending game of Whack-A-Mole. So what’s an entrepreneur to do?
The only way to minimize how much you play Whack-A-Mole — and how well — is to be as tuned in to your business as you can be, always. You can’t control economic adversity or your client’s successes (or failures). But you can make sure you understand your business and build in controls.
In the construction business, for example, you have to control your cash flow, because you’re often buying materials for a project that doesn’t happen for quite some time. You may know the price of lumber is going up but not have the cash to buy it later. You can’t control the price of lumber (wouldn’t that be awesome?!) but you can communicate this to your clients and build it into your proposals.
Another way to avoid playing financial Whack-A-Mole is to be conservative. If you’re constantly on the edge, in need of that next big deal in order to stay afloat, or seem to be always caught off guard by changes in the costs of resources, you’re not in control. And that’s not the right way to run your company. Take a breath and get back to the basics.
A client came to me recently and said they’re evaluating their business; they wanted to know the price of their sales team. They know how much they pay them in salary, and they know the commission structures, but they wanted to understand what the breakeven is on each type of plan. That’s a thoughtful question. Do they want a junior rep with a higher commission or a super-senior rep on a draw? This was a proactive way to manage the increasing costs of doing business so I gave them a calculator to help figure it out. Being involved in your business in that way is pretty impressive, and it ensures they can maintain control and make proactive decisions instead of being reactive and making uninformed panic hires.
No one can control everything; there’s always going to be Whack-A-Mole. It is the life of an entrepreneur or a business owner, but there are some things you can control, which will give you the headspace to play the game when it pops up — and it will.
For help playing the game — and getting better and being able to control what you can control — call me.
