How to Make Your Business Work for You
Think about the answers to these questions:
- How much time do you spend writing proposals?
- How many of them do you win?
- How accurate are your estimates?
- How long does it take you to get paid?
If you’re running a professional services firm, you already know that professional services engagements are notoriously difficult to estimate. Worse, estimates often create tension between you and the client right from the beginning. After all, everyone wants estimates so that they know what to expect! It’s a catch-22 for many entrepreneurs: if you overestimate, they might balk at your prices. If you underestimate, you run the risk of annoying the client when you ask for more, leaving them to wonder if they have been a victim of “bait and switch” tactics. If you don’t estimate at all, they may feel compelled to micromanage your team in an attempt to get costs down.
If this was an issue before the downturn, it’s certainly not going away now. When uncertainty is high, clients want reassurance. Uncertainty is also risky to you as the company providing the services! Clients may change their mind, learn new information, or fail to follow through. Our brain is on high alert, looking through the lens of previous bad experiences – trying to find ways to mitigate risk. That confirmation bias means both parties expect things to go wrong.
But it doesn’t have to be all doom and gloom! You can avoid much of that lost time and uncertainty when you transition from offering services to offering solutions. A solution is the “product” for a service business. Your company’s solution solves problems by using your unique process. When you develop solutions that you market similarly to products, you also start charging for them in advance. Your customers become the source of your capital, and you don’t have to use personal funds or your business line of credit.
Here’s how a productized solution works:
- You take all your experience, wisdom, and market research and ensure your solution adds as much value as possible to your niche and solves key pain points.
- You educate the customer on how to use it. The customer buys your system and joins your world; you don’t get sucked into the vortex of trying to understand all the intricacies of theirs.
- Your solution evolves, getting better and better with each new customer you add, and the customers themselves become a key part of your value creation process.
You can (and should) capture the value your company provides and encapsulate it into a solution. It doesn’t have to be a software solution, although don’t discount the importance of automating everything you can with technology because automation is a key factor in scalability. Even if your solution is a standard process, with templates, checklists, and videos that you deliver online, it is more valuable than trading time for money and billing by the hour. Anything that is repetitive and everything that is similar from customer to customer should become part of your solution.
Once your solution exists, the outcomes that it provides for the customer are more concrete and clearly defined when compared to billing by the hour. This makes outcomes easier to explain and easier for the client to understand. You actually have something you can show—even if it is a set of templates, flowcharts, and a video library.
Anything can be systematized. Anything can be converted from a service to a solution. If you’re curious, it’s time to get started.