Issue #4 - Karaoke Is For Suckers
Why karaoke is not a business strategy, a Q&A on employee benefits, and how embracing risk can double your income several times over
In this issue, I talk about karaoke capitalism, a Q&A about how small businesses can provide employee benefits that rival those of big companies, and share tips on embracing risk to dramatically increase your income.
And, as always, please forward this email to other people who you think would get value from it.
Until next time,
Karaoke Is Not a Strategy
I hate karaoke. Not because I have zero vocal ability (although that factors in), but because most people that attempt it sound awful. Ignoring the courage it takes to even try, I want to focus on the aspect of it that applies to business: copying someone else’s tune. Not just singing their lyrics, but copying the arrangement as well.
How can you stand out when you’re copying someone else?
And yet, that’s what most of us do. We look around and copy what looks like it is working at our competitors or common across our industry. We want to attract the broadest number of customers so we list endless services offered and industries served.
What do customers do when they see this? They yawn and move on to the next firm. If you’re lucky enough to get their attention, the discussion quickly moves to price because you look like everyone else. Congrats, you’re now a commodity. I know this sounds brutal yet it’s true. And we do it to ourselves.
Strategy Is What You Don’t Do
By trying to be “everything to everyone”, you fail to stand out to anyone. The obsession with a large list of capabilities will backfire on you. Customers will view your offering as lukewarm. That’s the worst situation to be in.
Instead, you want customers to love you or hate you. Don’t be afraid to let your freak flag fly — help prospects quickly rule you out or inspire them to want to learn more. As Shakespeare famously said:
Love me or hate me. Both are in my favor. If you love me, I’ll always be in your heart. If you hate me, I’ll always be in your mind.
This probably sounds counterintuitive, but you don’t want to waste time on customers that won’t be a great fit. You’ll be happier without them and vice versa. Strategy is what allows you to say “no” to the things you shouldn’t do.
Do What Others Can’t or Won’t Do
Build your business around the problem you solve better than anyone else. Be the painkiller that makes that trouble disappear. Focusing on one area where you can be remarkably good is how you win the loyalty of great customers.
Nobody wants to buy mediocre results yet that’s what most businesses deliver. This stems from a lack of focus, not understanding competitors, and failing to understand why customers buy. It takes a firm grasp of all three to find your unique value.
Doing one thing your customers care about better than your competition sounds easy enough, but focus can be quite scary. When you’re great at one thing it requires sacrifice in other areas. You can’t have the best price and be the most luxurious.
You have to pick your battles. Look for your unfair advantage by discovering what motivates your customers to buy and deliver results that your competitors can’t.
Service Business Q&A
I want to encourage every one of you to ask questions. Reply to this email with whatever you want to know, and I’ll do my best to answer!
This week we’re talking about how to provide exceptional benefits. Once upon a time, this was the realm of big companies only, but we now have great options.
Question: I’m trying to attract people to join my team, but we’re only 5 people so far and benefits seem to be a huge obstacle. How can I possibly compete with big companies that have the money to provide benefits?
I’ve heard this question many times. Most small service businesses struggle with this question and many ignore it — to their own detriment. While it’s true some big companies can offer outstanding benefits, you don’t need to be big to match (or even exceed) what they provide.
I'll let you in on a secret I've shared countless times. Use a PEO, or Professional Employer Organization. This solution will not only allow you to provide employee benefits, it will ensure you are compliant with labor laws and a huge list of other HR-related needs.
There are many national PEOs and more regional ones as well. The good ones can provide your employees with 401(k) plans; insurance such as health, dental, life, vision, and others; dependent care; and other benefits not typically received from small firms.
According to a recent study from McBassi & Company, businesses that use a PEO have 40 percent higher revenue growth, 14-16 percent lower turnover rates, and are 50 percent less likely to go out of business than companies that do not use a PEO.
This is a no-brainer to me. You owe it to yourself to investigate this further.
In my first professional firm, we did this immediately and it helped us hire key talent that would never have considered us given they had families and needed benefits. It also helped us when we inevitably hired a few poor-performing people and took steps to properly let them go.
Learning what drives value in business will set you apart. It took me several years to finally understand what drives business decisions. And once I did, my income grew faster than I had ever dared dream. Do you know how?