Do you know what your ideal client looks like when you meet them?
Everyone who runs a business is busy. Either working with existing clients, looking for new clients, developing new business opportunities or developing new business relationships and also managing the day-to-day work, ensuring your staff are sufficiently trained and everything is looked after.
Taking time out to work on your business is discussed by many. If you don’t make a habit of taking time out, I’d encourage you to start. Having a few hours out from your busy day to focus on where you’re taking your business is valuable time spent. Without this time, you can find your business is growing in a way you hadn’t intended (and maybe not in a positive way).
Everyone wants to grow their business profitably. Not just growth for the sake of growth. It’s the bottom line that counts.
Why identify your IDEAL client?
Simply put, it allows you to focus on profitable work, in the area(s) you want to grow your business.
How do you identify your ideal client?
Take out your sales daybook from 2017 or your last financial accounts (or the past few months). Sort this by the largest to smallest. This will highlight who you are doing the most business with. The next part is to look at the costs associated with these jobs. Is the largest customer also providing the most amount of profit? Looking down through your cost of sales and overheads, apportioned, how would the profit level look for these large clients (versus some smaller ones)?
You may begin to see some clients are not as profitable as you thought when you analyse out the numbers or you may be surprised to see that some are more profitable than you had imagined.
Identifying clients characteristics (what makes a good client looking back and what was not ‘ideal’), allows you to reflect and become informed when taking on new work.
You could do this exercise looking at a particular sector of work you undertake, different types of work, income streams or by the size of client or contract. Again, learning what clients are more valuable in what sectors or what income stream, will allow you to focus on growing the business in a very focused and clear way.
Growing your business profitably requires ensuring you know exactly where your profit is coming from. Without analysing the numbers and finding out the facts, it is hard to make well informed decisions. Getting to grips with this will help you free up your time (as well as grow your profit).
Saying no to less than ideal clients or as some say ‘sack x percent of your clients per year’ is encouraged to help ensure your business stays focused on profitable work only.
Our time is a limited resource. It’s also our most valuable resource in my opinion. If you choose to do less but more profitable work, you will find you will have more time available to spend with those you love.
Make sure you spend your time wisely.
Grow your business focused on profitability, identify your ideal client and learn to say no.
If you are unsure how to identify your ideal client or how to analyse your accounts in the manner mentioned above, be sure to discuss it with your accountant. You will feel in control of the direction the business is taking, its profitability and ultimately, your finances.
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