7 Steps from Employee to Employer. Biz Man

sustainable.

      By example, imagine the plumbing business that is beholden to a master contractor for all it’s revenues. What happens if there is a falling out with the master contractor? One might say the master contractor was very much in the ‘sweet spot’. They get to negotiate hard on your price and control the amount of work that you will get. In this scenario your business is at risk of survival if it cannot source its own work.

      Sometimes suppliers may ‘hold you to ransom’, sometimes it is a single large customer that provides all your income. Sometimes it is a key employee or an agent. The list is endless so you must do your homework before you start trading to ensure you are maximising your business chances of being as close as possible to the sweet spot.

      When chips are down who owns the customer relationship (read profit)?

      In many businesses the sales team has control over the relationship with ‘their’ customers - that’s how they see it. Be mindful that the customers should be loyal to your brand, your business, not individuals, not even you.

      This is an important lesson for many people. The solution is to model your business correctly. Manage all stakeholders well to ensure that your business is always in control. Your business must earn and maintain customer loyalty. If you cannot achieve this you are beholden to the stakeholder that is in the sweet spot or worse a particular sales person or employee could hold your entire business asset to ransom.

      This is an iterative and creative process. You need to consider changing your proposed business model to optimise your chances of success. Remember you can change anything. This is your business and it hasn’t started trading yet - you can re-model it as much as you want. Fun isn’t it?

      If your business model looks depressingly in the ‘sour spot’ then you need to go back to Step One. Don’t fear this. It has probably saved you from a failed business.