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Especially when we start out in business we try to please every client or customer who comes along. I know because I have been in that position. However I have learned that we should concentrate on what we are best and most comfortable at doing, and on what is most profitable for us.
In our local village we have a very good baker. His bread has a considerable reputation. He knows pretty well how much bread his customers will buy each day. He opens at 7.30 and closes at 2.30. If you want the best choice of bread you need to get there earlier. Near closing-time nearly all the bread will be gone and sometimes he has sold out. There can be very little waste and therefore he must maximize his profit based on his resources.
He buys in a few things to sell on, notably sausages which he cooks. He produces some sausage rolls and Cornish pasties for the lunch market, but always sells out.
What doesn’t our baker sell? Fancy cakes! The reason is that although these would be high-cost, they are also labour-intensive. He or one of his staff would have to put in a lot of time on each cake. A lot of local baker-patisseries do make that error. They reduce their profit.
Bread is easy. It requires a lot of skill to get it just right and our baker has the skill. However he can produce a lot without spending much time on each individual loaf. He knows his business. He has got it right.
Like the baker I now do what is most profitable. There are some services which people ask me for which are not profitable. I buy them in through using sub-contractors. Those sub-contractors may even work directly with my clients. That is fine with me given we all have a good relationship. Sometimes my clients ask me for something totally out of my sphere, akin to the fancy cakes issue for the baker. I ensure I know just the right trusted business person to whom to give a referral. In that way I deliver everything a client wants without having to do it all myself and without having to do things which are difficult for my business, being too time-consuming and not profitable.
Do you subcontract or know when to pass on work? Doesn’t it give great piece of mind and allow you to make the best use of your time and effort?
© Jon Stow 2010
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