Business is just like fishing

I had the pleasure of floating in the sea within a rock-sheltered tidal pool just the other day.

Making a business grow

As I was bobbing gently over the waves I noticed a school of small fish swimming close by. (I’m no fisherman so I have no idea what kind of fish they were – just that they were small and by conservative estimate there must have been 50 or more of them).

On a whim I decided to catch a fish using nothing but my hands – I mean they were swimming within centimeters of my hands and feet!

An hour later all I had managed to catch was a sunburn!

It got me thinking about businesses (large or small) and how finding clients for your business and catching fish are in fact similar!

Prospects vs Customers

Before I dive in further (pun intended) let’s quickly define the difference between a ‘Prospect’ and a ‘Customer’ for your business.

By my definition a ‘Prospect’ is anyone who is, or may become, interested in your product or service and who may at some point (now or in the future) take out his wallet and hand over cold hard cash to you for your product or service. At the point where he pays you he becomes a Customer.

For the rest of this article think “Prospect” whenever I say “Fish”!

It follows that if I don’t want to starve as a fisherman I would be well advised to study the fish that I’m trying to catch. What do they like to eat (bait)? Where do they live? Are they fresh water or salt water fish? Do they swim in the open or prefer to hang around in the shadows and rocks and reefs? Do they live close to the surface or down deep? Are they solitary or do they swim in large schools?

Gorwing your business with more customers

In fact the more I know about the fish I’m trying to catch the more likely I will find and catch enough fish to survive. Catch enough I would thrive!

Clearly the best place to start is where the fish are!

Finding Prospects and Customers for your Business.

Finding prospects (and Customers) for your business is no different! The more I know about my Prospects the more likely I will find them and convert them from Prospects to Customers.

What do they like? What are their needs, their desires, their fears? Where do they hang out – what is common amoungst them – are they Mom’s with small kids or Dad’s with poor golf swings?

The more I know about my Prospect the greater the chance that I can go in search of them – and go where they are! Just like fishing – if I look in the wrong place I will never find the Prospects and Customers that I’m after. Think of this process of understanding your Prospects as ‘defining your ideal Customer’.

Marketing it the bait that turns your Prospects into Customers.

Recall that I caught no fish (even though I tried diligently for an hour) despite being ‘where the fish’ were?

So we need to consider the correct mechanism to catch those pesky fish! Clearly using my hands was a poor decision. I would have been better served baiting a hook with the type of bait these fish would respond too – and perhaps I would have been even better off if I had a net – instead of just a baited hook. Using a net may have netted me many fish simultaneously instead of just one at a time.

So it is with ‘catching’ Prospects – if you don’t use the correct bait and you use inefficient tools you will catch less Prospects than if you use the correct bait and the most effecient and effective tools.

Growing your business is a numbers game.

If I catch 1 fish when my daily requirement is 10 I will surely starve. So it is with Business – you need to know how many sales you need (daily/weekly/monthly) in order to survive – and how many you need in order to thrive.

Working backwards – if I need a Customer to make a purchase every week and I know that I convert 1 Prospect into a Customer for every 100 Prospects it follows that I need 100 new Prospects a week – or roughly 400 per month in order to make my 1 weekly sale.

Now if my marketing is based on a baited hook rather than a net I’m going to be very busy with that hook to attract 100 prospects a week. A net may be a much better option. Now imagine I was able to attract 200 Prospects per week using my net this would likely lead to 2 sales – meaning 2 customers – every week.

That’s double what I needed in order to survive which means I’m likely to thrive and let’s be honest, who wants merely to survive when you could thrive instead?

Now these numbers are simply by way of example and each business is going to have thier own metrics – but I’m sure you get the point so I won’t belabour it.

So, do you have your Mentor on board yet? Join our Mentorship Program and let me share with you my ideas for finding and converting enough Prospects into Customer to grow your business.

Here’s to your business prospering!

Small Business Mentorship and online courses.

Want to learn more? Check out our cataloge of online courses or join our mentorship program here.

 

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Should my business be on the internet?

This was a question someone asked me earlier this month – and to me the answer was so ‘obvious’ that I was astounded by the question.

But lets set the scene first so we can understand the context of the question. This chap has a small engineering works that manufacturers bespoke aluminium components – and he is only interested in orders greater than R 80 000 (Eighty Thousand Rand) – no he isn’t greedy but the cost of setup and tooling to manufacture “to-order” components makes jobs of lower value unprofitable – or do they?

Will getting my business online provide me with valuable information?

So let’s look at the question again through his lense and then let me tell you what I advised him:

1) What is the nature of the customer? Is this a once-off sale or can he reasonably be expected to buy from you again – and if so with what frequency, over what time period and what would the average sale value be?

You see, without determining the answers to this question you cannot begin to guage the lifetime value of your customer – which is of vital importance. Lets say this customer would order R 20 000 worth of product every 60 days, but in the absence of poor service or a sub-standard product (which the owner has 100% influence over) this customer could be expected to purchase from you for the next 3 years.

That makes the lifetime value of this customer significant!

6 Sales a year averaging R 20 000 = R 120 000 / year over 3 years that’s sales of R 360 000! Through this lense the once-off costs of tooling may well pale into insignificance and make this a very worthwhile customer – even though the intial order was only R 20 000 – and possible loss-making.

But does this yet answer the question ‘Should my business be on the internet?” No yet.

The following questions also need to be asked – and the answers established. If you were to put a website up for your business what purposes would it serve? What do you want or expect it to do for you?

A tremendous amount of websites (possibly 7 out of 10) are, in my opinion, not fit for purposes. That is a topic to be covered at a later time.

Back to this small business owners question. Let’s look at what it would cost him to get a website up on the internet. Realistically, if he got someone to do a basic design for him, it would likely cost between R 3500 – R 5000 once off. If he shopped around (or had the technical skills to do it himself) he could get it done for a lot less.

Nevertheless let us assume that he decides that the purpose of the website is twofold:

  1.  To market his business;&
  2. To canvass leads.

This second goal “to canvass leads” is the critical one in my opinion, certainly in the early stages. You see by structuring his website in such a way that it gathers leads (regardless if these ask the visitor to complete an online form, or ask them to call the company etc) he begins to tap a wealth of information!SmallBusinessInterest

He gets to guage interest in his products and services!

He gets to asks these leads meaningful questions and their answers will provide invaluable information to help shape his future strategy.

Getting this information will provide him with an answer, based on results rather than conjecture, gut-feel or personal bias. He will soon know whether being online does or doesn’t have merit for his business. (Personally I cannot think of any business that wouldn’t benefit from being online – but this business owner needs his own measurable answer)

What benefits could we expect from getting our small business online?

So lets look at the likely outcomes of his online test. If he receives no interest, no leads and no data from having launched his website (launching an effective website and gathering leads is another topic for later discussion) then his initial thoughts that he would not reap real rewards from being online may be confirmed. He gets to answer his question definitively – although he would be well advised to re-test these assumptions at regular intervals as the market forces and internet penetration evolve rapidly so what might be valid today may no longer be valid 12 or 24 months from now).

If visitors to his website take the desired action – to call or complete a form etc – then he has the opportunity to engage with them and to establish inter-alia

  1. The value and frequency of his prospects purchases.
  2. What unique requirements his prospects may have – would they make larger purchases if they were incentivized to do so? Consider a discount or credit terms or preferably a value-added service (like a site survey or reduced-fee consulation)
  3. Do they have unique requirements that others in the field have not been able to offer? Would this offer a unique opportunity? Could you charge more for solving these unique problems?
  4. How many people are interested in products or services related to his core product that he could incorporate as value-adds or even a second revenue stream?

As you can see there is always value in getting your business online – provided you are clear on what you expect of your website and that your website is fit for purpose.

This exercise, executed for a small amount of money, will reveal a mountain of valuable information and will help definitively answer his question “should my business be on the internet?”

Small Business Mentorship and online courses.

Want to learn more? Check out our cataloge of online courses or join our mentorship program here.

 

Here’s to your business prospering!

Business Start up mentorship program