Know When To Get Out Of The Way

One of the things you’ll learn as your business grows is that you need to get the hell out of the way of it! You become the bottleneck. Hopefully you see this coming and build yourself out of the business early. But even if you don’t, once you do realize it, start transferring skills and privileges to your staff so that stuff can get done faster than you can get to it.

When Your Business Is Bleak You Need To Be At Your Best

Whether finances are tight, your dealing with staffing issues, technological failures, or whatever: when things are going wrong, that’s when you need to be at the top of your game. You can’t let the stress of the situation get to you. It will be difficult. You’ll need to rely on business partners, employees, friends, and family. Whatever you need to do to get through it, do it. Once you get your business healthy it can take care of you, but you need to take care of it when it is suffering.

High Margin vs Volume

At some point during your business’s life you’re likely going to have to choose between high volume, but low margin sales; and high margin but low volume sales. It can be a very difficult decision, and there’s no one right answer. Generally speaking though, it comes down to profit. Which way will ultimately give you the most profit with the least hassle. 

Recently I was forced to make this decision for one of my businesses, and I ended up choosing to go with high margin, low volume. This particular business has quite a few things that aren’t easily scaled to deal with high volume. Which means that scaling is costly. In hind-sight the decision should have been easy, but when you see the high dollar values of high-volume contracts it’s easy to think about revenue rather than profit. 

The Profit

Whether you’re creating a startup or you already have a functioning business, use whatever tools are available to you to make it better. One tool I’ve found very valuable recently is a TV Show called The Profit. Yes, it’s one of those stupid reality shows, but here’s the thing, it’s not stupid. If you pay attention, it illustrates perfectly a lot of the pitfalls small businesses run up against, and potential solutions to those problems. I highly recommend it.

Asymmetric Dominance (The Decoy Effect)

If you’re trying to figure out pricing for your start up, you should learn a little about asymmetric dominance theory, which is also called the decoy effect. In short, by providing potential customers with an option that is inferior to the one you want them to choose, but superior to the other levels, it will help them make the better choice. 

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