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Do you want to start your own business?

Here are 10 things founders get wrong about building a service-based business

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1/ Quantity of Customers vs. Quality of Customers

Most founders get caught up on the QUANTITY of customers they have vs. the QUALITY of customers they have

For example, in a service business like mine, I frequently get asked: How many clients do you have?
That’s the wrong question. It’s not about the quantity of customers but the quality of customers

What would you rather have?

1. A) 100 clients that pay $10/each = $1,000 in revenue

2. B) 10 clients that pay $1,000/each = $10,000 in revenue
2/ Riches in Niches

First-time founders think that they need to sell their product or service to everyone

They would like their Addressable Market to be HUGE!

This is completely backwards...
Instead, find a group of individuals who are passionate about what you do, and they will:

- Pay you more
- You’ll enjoy working with them

Apple didn’t start to market to everyone. Instead, they started as a fringe brand for artists
3/ It’s not about you

A lot of service businesses believe that they need to show customers how great they are:

We have “20 years of experience”, “We’re experts at X”

Customers don’t care...

Customers care about how you can solve their problems
Show them how you’ve solved a similar problem via a testimonial, and they’ll trust that more than anything you say

As a service provider, you’re not selling a service.

You’re in the business of selling transformations

@alexgarcia_atx nails this:


4/ Have a Minimum Price Threshold

Most service-based founders take every customer that comes in the door

They think that turning a customer away is lost revenue

The focus should not be on how much revenue you’re turning away but how effectively you’re using your time
Spending 1 hour to fulfill work that will pay you $100 is not as good as:

Spending 1 hour to fulfill work that will pay you $500

Set a minimum value on your time and say “no” to work that doesn’t exceed this threshold
5/ First Mover Advantage

Most Founders think that if your idea isn’t original enough and you’re not first - it’s not worth it

In my field of accounting and financial services – there are many competitors
However, some of my competition has:

- Terrible execution
- Poor customer service

This is an opportunity if you can do better
• iPhone wasn’t the first smartphone
• Google wasn’t the first search engine

Though it helps to be first, it’s not everything.

Superior execution can beat a first-mover advantage
6/ You don’t have to know everything

Most CEOs didn’t get to where they are on smarts alone

They have complementary skills sets such as good communication, EQ, sales, etc.
They cover their weaknesses by hiring specialists who can do a job far better than they could

Do you think Mark Zuckerberg is the best coder at Facebook?

I’m sure he’s great. But some of his employees could be better than he is
7/ Sales is So Important

A lot of founders hate sales or think that sales is useless, aggressive, unnecessary

Take it from a CFO - Sales is the lifeblood of a company

Revenue cures all problems in an organization
You gotta get used to asking strangers to give you their time, money, or attention

This is a skill that every business needs. All founders need to learn how to sell

Here is a great thread about the importance of selling:

8/ Can your business run without you?

The worst managers feel like they need to control everything all the time.

They micromanage

The best employees love autonomy to make decisions and have skin in the game
If your business can’t run without you being there all the time, there is something wrong

You need to trust your team and delegate

If you don’t trust them, give them a chance

If you don’t think they can do it, find someone who can
9/ You don’t do it alone

Stop taking credit for everything. Distribute recognition

Your employees are the ones who put in the time and effort to make your company great
Thank your employees frequently and often

Without them, you wouldn’t have a company to run
10/ Outsourcing

Some founders think that they should never outsource anything in their company because of:

1. Cost
2. A lack of control over the work

This is foolish.
If you’re spending 1 hour to save yourself $200, think about what you could have done with that time instead?

If you could have made $1,000 in sales in 1 hour instead, spending time to save $200 is not time well spent
Today there are some solid outsourcing functions offered for:

• Marketing
• Finance
• Legal

You don’t need to do everything.

Find a professional you can trust, and focus on growing your business – that is where the greatest reward lies
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