The entrepreneurial journey is filled with ups, downs, sideways, and inside outs. For many business owners, there isn’t a clear path to take, and the early years require an informed approach to what often feels like a guessing game. In all the chaos, it’s only natural to make countless mistakes. But, if you can avoid this one major mistake almost every entrepreneur makes, you’ll save yourself a lot of headaches, heartache, and expense. Here’s what it is, why it’s catastrophic, and how to avoid it.
The Mistake: Pursuing Business That’s Not Your Target
At every stage of your business, you need a company strategy—including the earliest years. It can and should be flexible initially, but over time, it will solidify into something concrete you can build a real foundation on. When you fail to take the time to develop your strategy, you fail to have clear direction. And, when you don’t have a clear direction, you chase any and every piece of business you see.
The Costs of Going Outside Your Ideal Customer
Few things get me as heated as this because pursuing business outside your target is an avoidable mistake—yet almost every entrepreneur I meet makes it. Don’t get me wrong; I understand why. You’re struggling to keep the lights on and pay your employees, so anyone willing to give you money sounds like an ideal customer. Right?
This reasoning is based on flawed logic. The reality is your target customer is also called your ideal customer for a reason: they’re the ones you can serve the best, who will benefit the most from your products or services, and yield you the highest return for the longest time. When you take business outside this target, it ultimately sets you and the customer up for dissatisfaction.
Let’s say you have a commercial cleaning service. You’re committed to using non-toxic products, and your target customers include daycares and schools. But you’re in the early days of your company, and to make ends meet this month, you say yes to cleaning a healthcare facility. Unfortunately, this facility requires that you use highly toxic products you’re not as familiar with to achieve their mandatory levels of sterility.
So, you have to buy new products, train your team how to use them, and then store that inventory afterward, even though you don’t plan to use it again. Odds are good that, because this isn’t your area of expertise, your work won’t be up to what it usually is. Your customer might then be dissatisfied, refuse to give you a referral or leave you a negative review. You can see how the costs of such a situation can multiply, leaving you in a worse position than you were in the first place.
The Positive Snowball From Target Customers
Even if things happened to go well in the scenario above, a referral from the healthcare facility wouldn’t be worth too much to you since you don’t want to serve more healthcare facilities in the future. When you stay in your lane and say yes to your target customers instead, you experience the opposite effect. You’re likelier to perform well, satisfy customers, and get rave reviews. You might also get direct referrals, leading to work with other target customers.
There are other intangible and important advantages that come with serving your true base. For example, your team members will feel more fulfilled since they’re serving your purpose and making customers happy, and morale will improve. This puts you in a better spot in terms of employee retention. You’ll also be more efficient since you’re operating in your area of expertise, saving time and money. The benefits just continue to add up.
10 Times the Value
In my experience, working with a target client is 10 times more valuable than working with somebody else. So, if you need the business because it’ll make the difference between paying rent or foreclosure, you might need to make that decision. But recognize that you’ll be getting a dime for every dollar you could get with your ideal customer.
My best advice is to get clear on your company strategy as fast as possible, which will naturally help you get clear on your target customer. Once this is defined, do everything within your power to stick to serving this customer and this customer only. It might feel counterintuitive to turn away other business, but it’s actually one of the wisest things you can do.
As soon as you’re unwavering about the clientele you serve, you’ll begin to carve out a niche for yourself, which is key to building a business that grows and lasts. Avoid pursuing business that’s not your target, and you’ll be well on your way to true success for the long haul.
New York Times best-selling author Clate Mask is the entrepreneur’s guide and the CEO and co-founder of Keap, the leader in small business automation software. Clate’s passion is helping small businesses conquer the chaos and grow their business using the Six Keys to Success. He is intimately familiar with the balancing act of entrepreneurs, which is what drove him to discover and teach the Six Keys.
Missed target stock image by Pachai Leknettip/Shutterstock
