Catch Bigger Fish
Q: Do you think there is something a small business can do right now to make more money? We seem to be stuck in a rut that we can’t get out of.
A: What I would suggest is that when you go fishing, you go to an area where you are more assured of catching bigger fish.
Here is what I mean: I have a friend who sells real estate for a living. Back in the day, before the real estate market crashed, he made a great, and fairly easy, living selling small investment properties. Duplexes, four-plexes and mini malls were his specialty. He loved those sorts of properties because they were easy to sell, easy to fund, appreciated well, and offered a quick, decent commission.
But then the bottom fell out of the market and suddenly he was faced with a list of clients who were 1) stuck with properties they could not sell, and 2) not looking to expand their portfolio. As a result, his business was suddenly in real trouble.
But rather than stay stuck on a sinking ship, my friend decided to take action. He called up all of the best, most experienced real estate agents he knew and picked their brains. This was not the first down-turn in the real estate market – how had they survived similar problems in earlier times? My friend was willing to listen to all new ideas.
He received a lot of good advice, albeit some of it conflicting, but one thing an old hand in the real estate market told him made the most sense. “It takes as much effort to sell a small duplex as it does to sell a 100 unit apartment house, you know,” the gentleman explained to my friend, adding, “but the large apartment complex will net you a heck of a lot more money.”
Sure deals were harder to get and close, but the point was that my friend could continue to do what he had always done and get the results he had grown accustomed to, or he could hustle for bigger deals, do just about the same amount of work, and possibly get much better results.
If he wanted to keep fishing, he needed to catch bigger fish.
And so that is what he began to do, almost immediately. He put out feelers to investors who had larger portfolios. He made presentations. He advertised in more high-end publications. And he entered into a continuing education crash course on how to sell large, multi-unit buildings.
Before long, his new ideas and hard work began to pay off. He got some new clients, and listings for two big buildings, both of which eventually sold.
My friend learned a valuable lesson – although it took a lot of time and effort to sell those buildings, it was no more than he would have spent selling two small duplexes. The essential effort was the same – getting the places ready to be shown, marketing them, showing potential buyers around, and then closing the deal. But the payoff was much, much bigger.
My friend now says he does not need to work the rest of the year, but he is going to anyway because he is so excited about the potential of his new business model.
I suggest that this is a good lesson for any small business that is struggling to make it through these tough times.
Seek out and fish for bigger fish.
Undoubtedly, there are potential customers out there in your industry who have larger budgets and bigger needs than some of your current customers. Find out who they are. Do some research, learn their needs, get some names, and prepare a presentation.
Today’s Tip: Is the economy getting better? If you ask small business owners, the answer is apparently yes. According to the latest Discover Small Business Watch, small business owners’ confidence increased for the second straight month in May, rising to its highest level in seven months.
© 2010 Steven D. Strauss, www.MrAllBiz.com