I struck up a conversation with another small business owner as I was waiting for a plane last week. She told me about her business — she provides training to the car manufacturing companies. Not the best business to be in with the market declining.
She said she’d diversified over time and spread her business from just American manufacturers to others, but the work was still declining. That’s one of the problems many small business owners have when focused on a specific niche. If the niche you serve fails — or takes a bad hit in the market — you’re sunk.
But all is not lost for her. Providing training is a transferrable skill. She can easily start focusing on a new industry and use the skills she has to provide training for them.
As we talked, I asked her whether she outsourced any of her work or not. If you’re a service provider and sell your time for money, you’ll always be chasing cash flow because no matter what you charge there are only so many hours in the day.
She said she had given a bit of work to friends, many who are stay at home moms who want to make a few bucks. She charges their straight rate to the client because they’re friends. She’s making a big mistake by doing that. After all, she spends time doing billing, reviewing work and coordinating with the client and if there is no mark up, she’s working for free.
You simply cannot let personal issues get in the way when you are doing business. If you want to stay in business, you must capture the true cost and pass it on to the client.