When you start out in business it’s all about survival. How do you live to see another day. That’s very very important. Once you’ve secured your today and tommorow that when you can comfortbaly start working for years to come.
Every business has a base it builds that supports it.That base of clients who gaurantee continous income/inflows because they keep coming back again and again to spend more and more money in the business.Those repeat sells are the foundation of buiness growth.
When we started out about 5 years ago we spent about 7 months without a single client yet we kept burning cash to keep the business open. It was not going to be long before we’d run out of cash to burn and without clients the situation was looking worse by the day.
What we did was to get customers we could build a round. Clients who could retain us and to be able to do so we zeroed on services that would be needed monthly like tax and accounting help. People don’t register the same business every month, neither to they write business plans every month or do product/market surveys monthly.
Tax and accounting were going to be it. So we asked ourselves, what’s our monthly operating cost? How many clients do we need on retainer monthly to cover that cost? We tried to make it as cheap as posible so we go about 10 businesses willing to pay 200,000 a month regardless of the work load. Once we got them every one that came after them had to pay the actual value of the service which is about 500,000 and above monthly depending ln the size of the business/work load.
The first 10 clients we got enabled us to build with confidence having sorted out our survival worries.That’s what you should also do as a start-up. Find a way to sort out your survival even if it comes at a far than acceptable cost. Once you do that then start charging every else your acceptable costs as you keep that base and maybe grow with it gradually.
Jaluum Herberts Luwizza is a Speaker,Writer, Columnist with the C.E.O Magazine and Contributor with the Nile Post.He is also a Business Consultant with YOUNG TREP East Africa’s No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.twitter:jaluwizza
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