A Major Reason Why So Many Cash Strapped Small Business Owners Constantly Struggle!
(And What Proven Steps Can You Take Right Now To Prevent This From Happening To You?)
Are you curious to discover why so many, well meaning entrepreneurs and severely cash strapped small business owners, and or service providers, constantly struggle?
No matter which particular niche they happen to be in?
And no it’s definitely not a coincidence.In fact, just a little bit ahead, you’re going to discover, how the triplets of business obstacles, cause a vast many cash strapped small business owners and or service providers, to either not reach their full earning capacity, or just plain be forced out of business altogether.
And the really sad part is, with just a few minor tweaks here and there, and a little testing and monitoring.
They are actually in a pretty good position, to not only sustain their businesses and or services, but actually experience some much needed growth while they’re at it.
First, however, the remainder of this post is dedicated to revealing, one of the primary reasons, far too many well meaning small business owners, and or extremely dedicated entrepreneurs, constantly struggle!And what they can and definitely should do about preventing it asap!
So What’s The Major Reason Why So Many Well Meaning Small Business Owners And Or Service Providers Constantly Struggle?
(And Can You Do Right To Prevent This From Happening To Your Business And Or Service?)
First of all, as previously mentioned in the above paragraph, typically, the average cash strapped small business owner, and or service provider, will at some point in their businesses existence, find themselves constantly going head to head, with the triplets of business success opposition.
That being, (A.) Extremely fierce local competition, from newbie start ups, looking to underbid their current prices!
(B.) Constantly rising costs of doing business, and therefore diminishing gross front end profit margins!(Thank goodness there are definitely some proven marketing strategies to counter act this all too common occurrence.)
(C.) And finally, the ever present threat of a sagging local economy, that is , (either) officially in a mild to severe recession, or one of the two is definitely on the way!
Successful Entrepreneurs Learn How To Become Incredibly Flexible! (And So Should You!)
Those three major obstacles alone, (have) and definitely will continue, to be a major cause of business failures!
However, even when you do manage to navigate past those ongoing obstacles entrepreneur, there is an even bigger challenger, just over the entrepreneurial horizon, lying in wait, to mount an all too real challenge!
And it has more to do with “how” you or I prioritize our given business models. Because when you and I get the correct order of cash flow generating priorities right,your long term gross front and back end profit margins, aren’t just something you read about in a “how to” business manual of some kind!
But, (sadly) whenever the cash flow generating sequence is wrong, total financial chaos typically ensues!So let’s try and change that rather grim outlook asap, shall we?
So Why Do So Many Small Business Owners Or Service Providers Get Their Profit Priorities So Out Of Sequence?
Ladies & gentlemen, for this particular example, let use a profit seeking service business, like your typical Mom & Pop landscaping business owner. Formerly referred to as the lawn mowing business. 😀
Because the vast majority of them are constantly faced with the same major issue(s.) They’re relying far too heavily, on trying to make the front end only portion of their business, the primary profit generator!(And if they’re not careful, they simply aren’t going to make it!)
Which all too often, is a fatal marketing mistake in general, and a bad overall business decision in particular!
Basically (speaking), here’s why!Ask anyone you know, that has ever attempted to profitably run this type of service business, and or is currently attempting to run one, if this, (readily acknowledged), purely surface analysis only,is too far from wrong!
Small Business Owners In General And Startup Service Providers In Particular Have To Be Mindful Of Ever Increasing Ongoing Expenses Getting Out Of Hand!
While it may not seem painfully obvious to the mere lay person, looking in from the outside.The typical landscaping small business /service provider, actually has a ton of upfront, ongoing expenses, like trucks, both new and used,(and the Insurance premiums and ongoing gas expenses that come with them!)
They also constantly need state of the art mowers, weed whackers, salaried and or hourly employees, that are constantly seeking, and often demanding periodic wage increases, and better and better employer provided benefits!(Which aren’t exactly cheap.)
They often employ full or part time bookkeepers, and or CPA’s etc.And those services aren’t cheap!
Extremely Successful Small Business Owners And Or Service Providers Have To Get Really Good At Wearing Many Different Hats Really Fast! Or Else!
They’ve also got various types of Insurances payments they need to stay on top of as well!They also need blowers, office space,(which also) means they may need to employ at a part time secretary!
And on top of all of that, they’re under constant threat from increased local start up competition, that is all too happy to attempt to undercut, their already extremely discounted front end prices!
Plus, as the local economy continually contracts (shrinks), this of course puts even more pressure on some of their regular customers, who might just decide not to re-new their annual maintenance plan this year, or not initially contact them to begin with!Ouch!
Savvy Small Business Owners And Or Service Providers Know Where The Real Profit In Business Lies!
(And “How To” Take Advantage Of It!)
And that’s “why” some of today’s extremely savviest entrepreneurs/service providers, definitely pay attention to, and adhere to the all important 80/20 Rule!Huh?
Meaning, they already know all too well, the vast majority, or 80% of their overall gross front end only profits, are constantly generated from 20% of their entire customer/client and or patient base!
And by the same token entrepreneur, the vast majority of the typical Mom & Pop landscapers overall -long term- gross profits, (meaning the all important 80%) of their gross profits, will most definitely come from their well thought out, and properly executed back end portion of their business! Not the heavily expense loaded front end!
Case in point, while the vast majority of them (constantly) struggle to try and gross 10 or 20% above their initial front end cost, just so they can keep the lights on, and the payroll checks from bouncing etc!
Successful Entrepreneurs Learn How To Profit From The Back End Components Of Their Business And Or Services!
The extremely savvy ones, readily know and understand, and are all too happy, to literally break even on the front end of acquiring a brand new first time, residential and or commercial customer! Here’s why!
They’ve already run their numbers, so they greatly appreciate the fact that typically, whenever they land a corporate account, even though they may be grossing $600 to $1,000 dollars per day,(or more), the vast majority of it, gets eaten up by their ongoing front end expenses!
Meaning, they’ll be extremely lucky if they’re grossing 10 or 15%!Yikes!
On the other hand, once on the site, they will typically discover, (much to their overriding joy!), this corporate or residential account, is also in desperate in need of some rather pricey fertilization, or grub, flea & tick control issues etc!
Now, even though these additional, (must be dealt with at some point) services may cost their corporate customer/clients an additional $1,500 to $2,000 dollar per week!
Extremely Savvy Entrepreneurs Aren’t Afraid To Literally Break Even On The initial Front End Of Their Sales Funnel Provided They Have Some Type Of Market Tested Back End Income Producing Process Ready To Go!
Now the extremely savvy landscaper is grossing 75 –85% gross profit, instead of just 10 to 20% on the marginally profitable front end!
Entrepreneur, where do you think the real long term profits lie? So hopefully now you can see and appreciate, why so many extremely dedicated small business owners, and or service providers quietly struggle!
And what you can and must do right now, in order to avoid the exact same fate happening to you! Any questions? Now as is customary during this part of our show.
P.S. Please share your extremely valuable comments (in the comments section below) that you can apply to your business, product or service in the next 30 days or less!
And if you’re currently registered on Linkedin or twitter, and you’re serious about about doing some type of power networking. Let’s get connected asap!
Extremely important note: And if by chance, you happen to know any of the lesser known podcasters,(or radio show host)
who also target small business owners, service providers or aspiring startups entrepreneurs etc.
And they’re pro-actively looking for potential guest speakers. Please don’t hesitate to-either- pass their name and contact information directly
to me or vice versa! Thanks!
(Click the link just below, and watch the first video at the top of the page, if you’d like to see the entire 33 minute replay, of a guest podcast on
marketing your small business or service. I Recently appeared on.) Please note some links on this page are affiliate (income producing) links.
And be sure you grab your explosive free 22 step small business marketing idea kit series, because it will help you increase your profits by as much as 25% in the next 90 days or less.
And help you master your effective communication in marketing skills.(No matter what your particular niche market is.)It’s a $97 dollar value and it’s free!
Comment *As you got established, you probably watched your monthly expenses grow, just to keep your doors open. So then you start making sales—a lot of sales—and on paper, you appear to be profitable. On paper, you’re generating enough revenue to cover your expenses, and then some. But when you go to pay your bills, there’s a disconnect. You’re short.
Excellent points Rogue!
Your assessment is spot on!
Thanks so much for taking the time to stop by and
share your thoughts. I definitely appreciate it!