Article #65, January, 2008
Pay the Rent When Business is Slow
Every business has ups and downs, but when you are a solopreneur, the downs can be devastating! If you don't have another source of income or if you have used up your financial reserves, your choices might boil down to j-o-b or more debt.
Let's explore some alternatives, and fix this before it goes too far!
I suggest a two-pronged attack with support. The support is very, very important. Prospects can smell desperation a mile away - it is very unattractive. Whatever it takes, stay positive. You can use daily affirmations, pray, talk to a buddy or a coach, etc. Believe you will bring it back with all your being. If you don't really believe you will, perhaps the best thing is for you to go ahead and get a job - at least part time.
You might also need to tell the people around you to be positive. This includes your spouse and your parents! Ask them to just not talk to you about your business if you think it will be difficult for them to stay positive.
The two-pronged attack involves a balance of actions affecting the short term and the long term success of your business. In the short term, you need to pay the rent this month. In the long term, you need to retire comfortably - or at least for now, to be able to pay the rent every month without cutting it close.
In the short term, cash flow should be your only focus. If you don't already know the quickest way to generate income, do this exercise: on a spreadsheet, make a list of all your clients from the last one or two years with the amount of revenue you received from each in column 2. In the third column enter where this client came from, then sort this list by revenue amount.
Now review the list - where did your highest revenue clients come from? Go back there, do what you do best and get more clients. In fact, for a few days, be singularly focused on getting clients. Don't do your bookkeeping or filing, don't answer every email, you don't even have to answer the phone - unless it is a prospect who might hire you. Focus only on getting clients.
If just doing what you do to get clients isn't enough, you need a promotion.
Retailers do this all the time. Create a great deal with an expiration date. For example, for the people in your networking group, offer $100 for every referral who turns into a client for the next 6 weeks. Call it by a clever name that has something to do with the season, a holiday or an event. It could be the "I just got a new dog and she needs professional training" promotion, or the "My daughter just started college and I have 30 days to buy her soul back from the devil" sale.
Other promotional execution options, depending on your previous level of success and pricing strategy, include:
- BOGO - Buy One Get One could be buy one get one free, buy one get one half price, etc. Could also be buy 2 get one free.
- % Off - This works best if you can offer a very attractive % off
- $ Off - This usually works better than % off, depending on your pricing strategy. Offering 10% off of a $500 product sounds a little wimpy, but a $50 rebate is attractive! You can't buy a pair of shoes with 10%, but you can with $50!
When you start to get burned out or have done what you could for now, you need to plant seeds for the long term, or at least for the mid term. What do you KNOW will bring you clients later? What I mean by this is - you can spend your time rewriting your website pages, but if you are not certain these actions will bring business, find something else to do that will.
Examples of comparatively inexpensive strategies that take longer to bear fruit include networking and publishing articles online. Public speaking can sometimes take time to schedule speaking engagements and write a talk. Direct mail, print and email advertising can be very fruitful and very expensive. Before investing in these, make sure you know what you're doing and that you are very targeted.
In summary, you need to be completely confident in the success of your business, focus on cash flow immediately and then plant seeds for the future.