Dien Rice
September 6, 2022, 08:47 PM
Hi Gordon,
Thanks for sharing the example of your late brother and others in a similar field to him...
Basically... on that... if you're a "little guy" (i.e. a small business), it's much better to be the high-priced specialized product or service, rather than trying to be a "Wal-Mart"...
It ties into one of your other recent posts...
What people often don't think about is that there is a "cost" for each customer you have...
So if you have 100 customers each paying $50 a month, or 10 customers each paying $500 a month... On the surface, it looks equivalent, and each will bring in $5,000 a month... However...
Serving 100 customers costs more than serving 10 customers! By "serving" I mean... answering questions, providing customer support, etc.
So, you'll actually make more money with the second option - 10 customers paying $500 a month - than you will with the first option of 100 customers paying $50 a month, because the costs with fewer customers will be lower...
"Costs" not only included monetary costs, but also time costs... and even "anguish" costs!
Now, I'm going to go and pull my hair out! ;) (Just kidding... I'm going bald enough as it is!)
Best wishes,
Dien
Very good, just a different perspective...lets look at both.
You say; " You make your money when you choose which business to be in."
I can't/won't dispute that...BUT...
I would say it: "You make your money when you choose your CUSTOMER."
Choose the WHO first, then the how, where and when.
I want customers who, first can afford what I offer without agonizing over the decision...I don't want a business with buyer's remorse.
I want customers who can ACT QUICKLY, without consulting the spouse, the mgr, the man in the back room, the Executive above them, etc.
I want CUSTOMERS who are easy to find, ready to buy, with the means to do so without overthinking. (Yea, redundant of the first two, but I am known to repeat myself...over and over).
So, perhaps we're saying the same thing...only thing is by choosing a customer first, it may tweak the exact kind of business you get into.
Example, my late Brother was both a mechanic and body man...however, most of his peers were one or the other.
His buddy was a transmission specialist, for GERMAN cars, all things Mercedes, Audi, VW, and his customers spent a lot more money, faster, than my brother got for the same work on a Ford or Chevy.
So one can choose a business, rebuilt transmissions, but most biz models may have additional specialties within them.
Nice to have choices too.
You should podcast this idea.
Gordon relentless
Thanks for sharing the example of your late brother and others in a similar field to him...
Basically... on that... if you're a "little guy" (i.e. a small business), it's much better to be the high-priced specialized product or service, rather than trying to be a "Wal-Mart"...
It ties into one of your other recent posts...
What people often don't think about is that there is a "cost" for each customer you have...
So if you have 100 customers each paying $50 a month, or 10 customers each paying $500 a month... On the surface, it looks equivalent, and each will bring in $5,000 a month... However...
Serving 100 customers costs more than serving 10 customers! By "serving" I mean... answering questions, providing customer support, etc.
So, you'll actually make more money with the second option - 10 customers paying $500 a month - than you will with the first option of 100 customers paying $50 a month, because the costs with fewer customers will be lower...
"Costs" not only included monetary costs, but also time costs... and even "anguish" costs!
Now, I'm going to go and pull my hair out! ;) (Just kidding... I'm going bald enough as it is!)
Best wishes,
Dien
Very good, just a different perspective...lets look at both.
You say; " You make your money when you choose which business to be in."
I can't/won't dispute that...BUT...
I would say it: "You make your money when you choose your CUSTOMER."
Choose the WHO first, then the how, where and when.
I want customers who, first can afford what I offer without agonizing over the decision...I don't want a business with buyer's remorse.
I want customers who can ACT QUICKLY, without consulting the spouse, the mgr, the man in the back room, the Executive above them, etc.
I want CUSTOMERS who are easy to find, ready to buy, with the means to do so without overthinking. (Yea, redundant of the first two, but I am known to repeat myself...over and over).
So, perhaps we're saying the same thing...only thing is by choosing a customer first, it may tweak the exact kind of business you get into.
Example, my late Brother was both a mechanic and body man...however, most of his peers were one or the other.
His buddy was a transmission specialist, for GERMAN cars, all things Mercedes, Audi, VW, and his customers spent a lot more money, faster, than my brother got for the same work on a Ford or Chevy.
So one can choose a business, rebuilt transmissions, but most biz models may have additional specialties within them.
Nice to have choices too.
You should podcast this idea.
Gordon relentless
