zenhabits : breathe

9 Unconventional Steps to a Thriving, “Very Small” Business

Editor’s note: This is a guest post from Chris Guillebeau of The Art of Non-Conformity.

For more than ten years I’ve operated a string of one-man businesses. My model is: keep it lean, hire no one, and outsource very little. I’ve made my share of mistakes (a long list!), but one thing has remained constant—I want to add extreme value to my customers, and I want to make a good living without simply creating a job for myself.

Here’s what I’ve learned.

1. Hire no one. My Unconventional Guides business took off in early 2009, and for a while I felt an internal pressure to hire some kind of virtual assistant—mostly because that’s what everyone in the internet world seems to advise these days. “Get someone to do the things you don’t want to do,” is how the idea is usually sold.

I finally realized that another answer to dealing with “the things you don’t want to do” is to just not worry about doing them at all. If I have to supervise someone else doing boring work, it’s not that different from doing it to begin with. The things are still on my mind one way or another. Therefore, it’s just me in the virtual shop, working from more than 20 countries a year.

2. Outsource very little. The conventional alternative to hiring employees is to outsource your life through overseas agencies or virtual assistants. But instead of outsourcing, you can just stop doing stuff. I don’t want employees, assistants, or clones in India to answer my email. I actually like hearing from my customers and don’t want to create a barricade between them and me.

3. Offer no customization. As Henry Ford famously said about his Model-T automobile, “They can have any color they want, as long as it’s black.” Once you start providing options, color, sizes, and so on, things get complicated. If you want to stay deliberately small, don’t customize.

(I also offer no shipping services, since everything I sell is digital. Therefore I have no need for inventory, trips to the post office, or worries about lost orders.)

4. Pursue a lot of opportunities, but don’t be afraid to cancel. Last year I developed four new products, but I almost developed two others. No one heard about them, because they ended up not being a good fit for the mission. Failing quickly is OK; dying a slow death is not. Don’t worry about what you’ve spent to get to the point where you are. In the words of Seth Godin, “The only cost that matters is the one in front of you.”

5. Offer more to the right people. Properly set up, the creative use of cross-selling and upselling can rock your business world. Most businesses earn much more money from existing customers than from new ones. When I first set up a very basic cross-sell – “Would you like fries with that?” – I increased sales by 23% immediately, without increasing the workload. Then I set up a simple upsell – “If you bought x, you’ll love y” – and increased sales a further 12%.

6. Set a clear, non-ambiguous goal. Most businesses have the goal of “maximizing shareholder value.” There’s nothing wrong with making money, but an unclear goal is hard to achieve. How will you know when shareholder value has been “maximized”?

Therefore, my goal is basic: happy customers who benefit from my work, and a good living for myself. I don’t need seven-figures or an overseas call center to achieve either of those objectives. Instead, I need to be able to travel and work from anywhere without worrying about money.

7. Provide the strongest possible guarantee, and stop worrying. I don’t mess around with guarantees. My Frequent Flyer guide guarantees that customers will receive at least one free plane ticket (25,000 miles) in exchange for $49, or I don’t get to keep their money. Everything else is guaranteed for life, or for as long as the bank that processes my Visa transactions will allow me.

Some people ask, With such a generous guarantee, what’s the refund rate? Answer: less than 1%.

But don’t people take advantage of you? Answer: most people are honest, so why worry about the dishonest ones? Life is too short.

8. Focus entirely on relationship building and cash flow. That’s it. This is what your very small business will live or die by, so avoid getting sidetracked by anything else. Relationship building activities include talking to customers and creating new products based on their feedback; cash flow activities include joint venture promotions, sales, and offers to existing customers.

9. Track two key metrics and ignore the rest. For my blog I want to know: how many new readers did we add today? For my business I want to know: what was the total revenue that came in today? Everything is evaluated according to those figures. At the end of the month I also quickly look at a few other metrics like visitor value, sales from affiliates, and a few social media stats. But it’s all very simple; it takes fifteen minutes to update monthly, and I ignore everything else.

As Zen Habits readers know well, you can often do more by doing less. What you give up is just as important as what you hang on to—and besides, choosing to be very small in business is fun.

Chris Guillebeau writes for a small army of remarkable people at The Art of Non-Conformity. Follow him on Twitter here.



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