How you run your business can be very reliant upon which of the above scenarios describe your financial situation. By having cash on hand, a CEO can stick to their defined goals for scope/scale of projects and what type of clients they wish to work with. They won’t have to settle for every $500 opportunity that comes across their desk or resort to offering services that fall outside of their core competencies. Of course, 1,000 projects/orders at $500 wouldn’t be a bad start for a company. But, playing the volume game can be difficult depending on the product. 100 projects/orders at $5,000 are likely to be less time consuming and more manageable.
When you don’t have cash built into your business you are setting yourself up for a number of issues. For starters, you really can’t afford to turn down work- even if it isn’t exactly what your business is designed for or the payday is peanuts compared to what you know your time is worth. You could be focusing that time on targeting larger scale projects that fall under your realm of expertise. Unfortunately, if you need that $500 to pay rent or keep the Wi-Fi running you’re not going to have a choice. This can become a dangerous pattern. You end up in a cycle of taking on small projects to get by and never have the time to put your attention to building the business you envisioned when you decided to become your own boss. You’ll ultimately be stuck in mud that gets more difficult to get out of as each day passes.
Just because you have cash, doesn’t mean you won’t fall into those same patterns. It happens to all business owners. Sometimes, it’s worth taking on a small project or doing something beyond your focus if you believe that it will lead to work that does bring value to you. However, these one-off projects are often not worth your energy.
The best way to run checks and balances against taking on non-beneficial jobs is to have a plan in place before your first day of operation. Know when an order is too small, an offer to low or a client too limited in resources to bring you the kind of opportunity you need. Set a minimum profit margin for any work you take on. Even set a maximum to avoid taking on work beyond your capabilities. Only compromise these thresholds if it means there is greater, manageable opportunity to follow. Also, write out your core service and product offerings in highly specific language. Do not perform labor that doesn’t match these offerings. You’ll end up confusing the marketplace as to what you actually do and make it much more difficult for anyone to take you seriously as an expert or master of your craft.
Now, get out of the mud and start marketing yourself to your ideal clients until you have a roster full of them. A portfolio of focused, high-end work will follow.