One of the biggest problems with small business is the customer. I’m not kidding. The customer is not always right – when it comes to the direction of your business. The product and service mix you choose to offer needs to work for you. In other words, it needs to be profitable, scalable and consistent with your mission. Customers have a nasty habit of “suggesting” new services that would be great for them but terrible for you.
Imagine a landscape design company being asked to offer a mowing service. To the customer, it makes sense to lump these two things together. But from a business perspective, it would spell disaster. Landscape design requires high level staff with degrees in horticulture, design, architecture, etc. They are usually a highly customized shop focused on designing and installing high quality, and beautiful landscapes. Mowing on the other hand, requires lots of low level staff with very little education, diligent management, and lots of equipment. To be profitable requires a very high volume and restrictive sales practices. The approach to finance, leasing, capital, insurance, management, human resources, sales, pricing, scheduling, maintenance, administration, and marketing is totally different for these two products. Lumping them together makes no sense.
If you own just such a business, chances are that it feels like a hodgepodge instead of a highly efficient business. That’s because the two primary products don’t really work together. If you started out as a design firm, but added mowing for larger customers because you felt like you had to, chances are that your passion is not the tedium of mowing, but the creativity of design. Further it’s likely that with proper automation, you could probably double or triple your design client base, without significantly increasing your staff. Whereas with the mowing business, you would need a direct 1:1 increase in staff. Plus, you hate mowing.
If instead of continuing to perform an unprofitable, horrible task because you think you have to, you contract with a local service to do the work you. Further, let’s say you enter into a reciprocal agreement with them in which you get first crack at their clients looking for design.
What is the result? You now have the chance to drastically increase your business, while keeping your clients happy, but without having to do the high intensity, boring and unprofitable service that you did before.