Managing my Clients

The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes

Mr Pareto and Mr Juran

Many businesses overextend themselves by either taking on too much or by spreading their skills too thinly. They end up being run ragged and nobody ends up happy. Here are my top 5 guidelines to running a successful Business

  1. Stick to what you know
  2. It is OK to say ‘no’
  3. It is OK to withdraw gracefully from a sector
  4. It is OK to let a Client go
  5. You can charge more than you think you can

Stick to what you know

Sure, every Business needs to expand over time and there are plenty of examples of successful Businesses going into radically different sectors – the Virgin Group is a good example.

If anyone has read any of Richard Branson’s books, however, you can see that it has not always been successful – he has been close to bankruptcy at times – and not always plain sailing. For every Richard Branson, there are plenty of others that have tried – and failed. Survivor bias means that you only get to hear of the successes. Those that didn’t make it tend not to write about it.

I recommend that you start with a core offering and, once that is established, look at what you can add on. Take First Aid Training for example. From a core workplace (BLS, EFAW, FAW) you can move to Paediatric, then Outdoor as a route. From there you could look at Pet First Aid.

All these are easily achievable with your core skills plus a bolt-on course and a few more training items.

If you then choose to deliver Mental Health First Aid or First Aid for Children or even take the logical step across to providing Event First Aid cover then you are suddenly looking at a big step up in training and a new range of equipment. Setting all that up and getting qualified & equipped will take your mind off the core ball.

Alan Sugar bought Tottenham Hotspur as he had an interest in football. Whilst he did eventually sell it at a profit, it took a lot of his time in turning it around and merely running it, enough that Amstrad missed out on the tech boom that was happening at the time.

“The way I see it” – Alan Sugar

It is OK to say ‘no’

When you are starting up, it is easy to say ‘yes’ to each and every First Aid training request that comes along, never quite sure when the next one will be along. Better to deliver a marginally profitable, or even a loss-making course than have nothing on that day.

Whoa. Take a step back. Have a think. “Will this course actually progress the Business”? If it won’t, then should you really be doing it?

Here’s an example. You get asked to run a First Aid taster to a local Club or Organisation. “Just a couple of hours one evening. We can’t pay much but you can help yourself to the Pot Luck supper and we’ll get you a drink or two”. Great, free food and a cushy evening making new contacts as well as giving something back to the community. Apart from that last item, which is not unreasonable and very worthwhile, the rest will not help you develop your Business. It is pretty unlikely that any meaningful work will come of it, you will spend half a day on it (preparation, travel x2, post-course cleaning and repacking) and either it will come hot on the heels of another course that day (so you will be tired) or you have sacrificed a day’s income to fit it in.

Learning to say ‘no’ gracefully is a big Business skill to learn, but developing and expanding your Business is as much about saying ‘not’ as it is saying ‘yes’.

It is OK to withdraw gracefully from a sector

Cutting and running is always an option. Not everything works out, but at least you tried. Hopefully when you go into something you have prepared, run a SWOT analysis, trialled it etc, but many factors outside of your control can affect what happens. I tried Pet First Aid, got the qualifications, bought all the kit, advertised it and had a go. Despite us being a Nation of pet lovers there just weren’t the numbers to support it. Perhaps I hadn’t researched enough, or pushed it enough but I did work out that it was distracting from my core Business. When my pet First Aid teaching qualification came up for renewal, that was the trigger to get out, sell the kit and move on (or in my case, back to my core).

Sometimes external events come from left field

Tanks of fish nibbling at feet was all the rage not so long ago – eating dead skin cells and generally providing a form of beauty therapy. I saw a fish pedicure Business set up in my local Shopping Centre. Within two weeks of it opening, a report came out stating that people having the treatment were in line for a bacterial infection from the fish via the smallest of cuts. This killed the whole Business overnight. Rough, but that can happen. The Business had no option but to close. To do otherwise would have been ruinous.

It’s OK to let a client go

This comes down to the Pareto Principle mentioned at the beginning. We’ve all had that ‘client from hell’. The one with the impossible deadlines at short notice. They are picky, late payers and always wanting this or that. You will find:

80% of your Business comes from 20% of your Clients

80% of your problems come from 20% of your Clients

If you are spending a lot of time dealing with awkward clients, stop. Drop them, move on. Replace them with a client that could be in that first list instead. Over time you will improve your Client base, reduce your admin time and increase your cashflow. Your Mental Health will improve as you are no longer getting late night “last minute” requests for courses, or having to chase every single invoice every single time, or bundling in freebies just to keep them sweet. Just (nicely) let them go.

You can charge more than you think you can

Most start-ups want to undercut competitors to get going – and undercut by a long way, thinking they need to do this to get the Business. Whilst there is a cost element to some decisions (purchasing commodities such as printer paper or baked beans), a lot of Business is won, lost and retained for non-financial reasons.

If you are running a First Aid course for a dozen employees, that day is costing the Business (say) £8-900 in salaries, £100 in room rental, opportunity cost with having the employees unavailable, PAYE, NI and other extras anyway. Let’s say £1500 as a minimum. Will they really care whether you are charging £300, £400 or £500? Probably not in the grand scheme. Will they care that the Booking and Certification process was hassle-free and that the employees thought it a worthwhile day? Absolutely, and they will come back to you next time.

On the other hand if you charged £300 last time and now you are getting realistic with a bump up to £500 for the course will they care, will they notice? Almost certainly. That’s the problem with going in too low to start with.

You can also price yourself too low as well. If you were looking to Book a Hotel and you found one for £15 a night where other similar ones were charging £40-50 would you not stop to wonder what was wrong with that Hotel? There must be a reason why it is that cheap – and it’s probably not good news.

Go for it. Be bold with your pricing. Your skills are worth it. Wouldn’t you rather work 3 days a week at £500 a day or 5 days a week at £300 a day?

People are buying a Service from you. You do not need to charge less because you have fewer overheads than a large Corporation. If they get the result that they want, they will be happy to pay £xxx for that and won’t care that less of it is swallowed up with admin than your big competitor.

PE – a colleague’s advice to me when I set up my first Business
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