The SBA reports that 50 percent of new businesses fail within the first five years. How would you like to know what the 50 percent knows? Plain and simple, they acknowledge that they don’t know everything. They hire smartly and partner with other experts for the rest.
They focus on what they are experts and surround themselves with other smart people who do other smart things. Being an entrepreneur is not like being an employee where you are expected to be a jack of all trades. You serve as a project manager which means you manage the project, the people, the printer jams, website updates, and maybe even sending anniversary or apology flowers to the boss’ wife. Most entrepreneurs naturally start this way. They are the production manager, the web developer, the accountant, the social media marketing expert, the tweeter, the sales associate and the janitor. That’s fine for the start-up phase of business but you cannot grow beyond having created a job for yourself in which you call yourself boss to one of that of a business owner.
Growth happens in a business when you decide to invest in the partnerships that will take your business to the next level. There are two major forms of partnerships: vendor and partner. If you are constantly dealing with PHP errors with the website and you aren’t quite sure how to spell PHP, it may be time to hire a web team. Here is a simple calculation of the opportunity cost of continuing to stay knee deep in the back-office operations.
Every hour that you spend on non-revenue generating activities costs you more than the money you save by performing the activity. Let’s do some basic math.
Your hourly rate is $100. Let’s say it takes you three hours to fix a web error.
A web developer makes $40 per hour. It may take a good tech geek less than an hour to fix the web error. The reality is that you just spent $300 in opportunity cost to save yourself $40.
I ask clients all the time, how much money could you make if you spent your time on revenue generating activities. If you did the math and you are the person loving $300 to save $40, it is time to establish quality relationships with vendors who can help you to manage the back-end operations.
I should also mention that these numbers are completely made up and not reflective of industry standard rates for a web developer.
I personally love the idea of affiliate marketing. Yes, I know it is not a good fit for every business model, however, the formula can be interchangeable as you develop promotional partnerships. The premise of affiliate marketing is that another company with a similar market share promotes and possibly even sells your products for a percentage of the proceeds. Win/Win right? Not everyone thinks so. I have met business owners who want to retain 100% of the profits for the sale of their products. In a perfect world, you would need to have an insanely large audience who in turn have an insatiable appetite for everything you produce. In which case, by all means, keep 100% of the profits of your products. The problem is that most come to me when they are not making enough money. So, in short, these greedy people would rather have 100% of nothing than have 70% of actual sales.
I find that most clients experience lack in their sales because of the lack of focus on activities that can grow the business, not because their product or service is inferior.
If the math for how you are spending your time and selling your products is not adding up, it may be time to source for mutually beneficially partnerships that will be contributors to the growth of a business.
Ammie’s Assignment: Make a list of every person and or business whom you have a personal connection with who shares your ideal target market. When you have that list, let’s connect and build a strategy for a mutually beneficial partnership with those entities. Leave a comment below or email me directly: firstname.lastname@example.org