The Sale That Killed Your Tiny Business

TweetA tiny business is a frail thing.

Particularly when you are at start-up, your business is only a couple of major mistakes away from … well you know… BACK TO THE CUBICLE!

Generally, business mistakes are tallied only when they effect MONEY.  Don’t make this mistake – a micro business has another precious resource that must be protected – TIME.

We only have so much time.  In other words time, like money, is a finite resource.  If too much is wasted, your micro business will fail.  You must choose wisely what you will spend your time doing.

The Fatal Sale

When you are starting out with your tiny business – you will want to take ANY sale.  You are just so darn thrilled that someone wants to hire you.

This can be a fatal error.

I am qualified to talk about this because it was a series of three bad sales that killed my first business in 2004.

Know Thy Self

A micro business, especially at the beginning, must know what it can and can’t do.  You must know what price you need to charge to be profitable.  You must be able to recognize the sales that will be profitable.

And – you must have the courage to turn down the sales that don’t meet these criteria.

I Just Need Some Experience!

You may be tempted to do any job just for the experience despite the fact that you know it will not be a profitable project for you.

Although doing business just for the experience can be a good strategy, it can also be fatal.  You should think these projects through and weigh the pros and cons.

The pros are that you will get the experience of executing a project for a client.  You could get a testimonial from the client and they may refer you to more business.  These are all very powerful advantages that you will gain from doing gratus or unprofitable projects.

The cons are that you will be spending much of that precious and finite resource – TIME – on a project that is not profitable for your business.

You must consider that you could be spending that time finding clients and projects that WILL BE profitable.

This is important and it took me the better part of a year to realize the mistake that I was making in 2004.  I spent too much time doing free or barely profitable work for customers in an effort to gain some traction and get some experience.

YOU MUST KNOW WHAT A PROFITABLE SALE LOOKS LIKE.  YOU MUST KNOW THE PRICE THAT YOU NEED TO CHARGE TO BE A PROFITABLE BUSINESS. YOU MUST SPEND THE MAJORITY OF YOUR TIME SEEKING OUT THESE PROJECTS.

Yes – this may mean that you will need to turn down a prospect that wants to pay you.  But is it the type of project that will get you a positive return – or could it waste precious time you could be spending seeking out projects that will make your tiny business some mighty profits.