Have You Created an Impossible Business?

It's easy to think that any business can be successful if you 
work hard enough, but there are many situations where this just 
isn't so. Consultants, coaches, and other service professionals 
often start a business believing that all they need to do is 
charge a "reasonable" fee and sell "enough" of their time. But 
unless you do the math to prove or disprove your assumptions, you 
may be creating a business that can never succeed. Here's what 
can happen:

- Impossible Business #1 -

My client Molly was selling her services as an image consultant 
to individuals who wanted an updated or more professional look. 
She charged $50 per hour, which she thought was the most anyone 
would realistically pay to work with her. In most cases, she 
traveled to a client's home or went shopping with her client.

Including travel time and lunch meant that Molly could only make 
two appointments in one day. The average appointment was two 
hours long. So the maximum amount Molly could earn in one day 
turned out to be $200. But in order to earn that amount five days 
per week, Molly would have to schedule ten different clients, all 
of whose schedules were able to adapt to whatever times she had 
available.

This was hopelessly unrealistic. Even if Molly had been able to 
make the scheduling work, when would she have had the time to do 
the marketing required to land that many clients? It turned out 
that the maximum Molly could really earn using this model was 
about $500 per week. After paying her taxes, she couldn't even 
cover her monthly living expenses.

- Impossible Business #2 -

Fred was a student of mine who worked as a software consultant 
for midsize corporations. He typically charged $75 per hour, and 
when he landed a contract, it often consisted of 20-100 billable 
hours.

Because Fred's earning capacity was so high and he disliked 
marketing, he spent a lot of money on marketing himself 
indirectly. He purchased display ads in industry journals and 
directories, mailed expensive brochures to large lists of 
prospects, paid to exhibit at trade shows, and hired a 
telemarketer to prospect for him. Fred also worked on contracts 
that came through agencies, who often took 20-30% of his earnings 
as their percentage.

Fred was earning as much as $80,000 per year, but he was losing 
about $10,000 per year in agency commissions, and spending 
$20,000 per year on marketing. In return for all his hard work, 
he was earning considerably less than he had at his last job.

- Making the Impossible Possible -

New consultants, coaches, and other professionals almost always 
overestimate how much they can earn and underestimate the amount 
of time and money required to successfully market themselves. 
They also forget that they will have to cover not only their 
living costs and business expenses, but pay self-employment tax, 
buy their own health insurance, provide for their own retirement, 
and allow for unpaid vacation and sick time.

If Molly or Fred had taken the time to sit down with a calculator 
before starting out in business, they would have quickly 
discovered that they were on the wrong track. But both of these 
businesses were able to be rescued.

Molly began selling her time by the day instead of by the hour. 
She offered her clients a full-day package that consisted of a 
wardrobe review and consultation in the morning and a shopping 
trip in the afternoon. By charging $395 per day and scheduling 
three clients per week, she could earn more than double than she 
did previously.

She also began offering a monthly one-day image workshop as a way 
of bringing in more income while giving prospective clients a 
chance to experience her work. The workshop became her main 
source of new clients, and marketing the workshop turned out to 
be easier than marketing her personal services.

Fred learned how to market himself less expensively through 
networking, speaking, and writing articles. Instead of buying 
booths at trade shows, he was showcased there as a presenter, and 
spent time networking with the other attendees. The same 
publications where he used to run ads now ran his articles. 
Rather than paying a telemarketer, he started picking up the 
lunch tab for people he thought could refer him some business.

As a result, his expenses for marketing and commissions dropped 
from $30,000 per year to $10,000. At the same time, his income 
rose to $100,000 per year, because as his visibility and 
reputation grew, his services were more in demand and he could 
command higher rates.

If earning a decent living as a self-employed professional 
sometimes seems impossible to you, start asking how it could be 
possible. What can you change about how you are marketing 
yourself, how much you are charging, and how you are packaging 
your services? While it could be that success will come if you 
just work a little harder, it's more likely that you first need 
to start working a little differently.

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C.J. Hayden is the author of Get Clients NOW! Thousands of 
business owners and salespeople have used her simple sales and 
marketing system to double or triple their income. Get a free 
copy of "Five Secrets to Finding All the Clients You'll Ever 
Need" at http://www.getclientsnow.com

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