Ideas for Service Business
One of the biggest challenges communicators have is how to scale a service business.
I’ve often marveled at the large, global PR firms that have millions of dollars in revenue and hundreds, if not thousands, of employees.
And then I read their financial filing reports and realize bigger does not equal money maker.
In the beginning of my business, I thought I had to have large top-line numbers and lots of employees.
And boy…we did.
In 2007, we had our best year in history, from that perspective.
But you know what our profitability was? A whopping three percent.
It was horrible and I still have dreams about the people I had to lay off.
But it taught me a really great lesson: Bigger does not mean better.
Since then, we’ve scaled waaaaaay back and have managed to increase profitability to 40 percent.
We make more money today on about half the revenue and a third of the employees.
Even still, we struggle with how to scale a service business.
It’s really difficult to grow a business when you sell people’s brains.
Because, as it turns out, you have to add people to scale. You can’t just make more widgets.
Turn Away Prospects? Are You Mad?
A few years ago, I was in Colorado skiing with my friend Erin.
She’s an art therapist who sees patients six days a week (unless she’s skiing with me or running one of her gazillion marathons).
We were on the chair lift and she was checking her phone.
She exclaimed, “Oh! I have a new patient!”
She had set up her website to take credit card payments and she required three sessions upfront.
And people did it. While she was skiing!
It was that moment that I decided we had to figure out how to do the same.
While she still had to actually do the work with the patients, she was no longer chasing money and filing insurance claims.
She was paid upfront and, if they hadn’t paid for another block of sessions, she didn’t see them.