The Most Dangerous Number In Business

As the founder of a start-up, I tend to work in 5th gear all day long. The greatest danger I face is that my day looks like a game of whack-a-mole.

Before I can resolve one problem another has already appeared. And this leaves no time for thinking. The most productive time of my day is when I can sit in silence and think.

By thinking I can envision and plan my day, week and month ahead…and I can avoid some dangerous pitfalls that everyone faces when they start a company.

One of those traps is to stay comfortable with the number ‘1’. Because the most dangerous number in business is the number ‘1’. That’s right…at some point we all start with…

…One customer

…One supplier

…One employee

…One marketing pillar

…One price.

I recently had a discussion with a business owner who was just about to launch his mobile dry cleaning and laundry operations. We discussed how the number ‘one’ is the most dangerous number in business for him and when he pitches to investors he should have answers to the following:

  1. You have 1 van. What if it breaks down for 2 days? How will the business keep running? What back-up delivery options do you have?
  2. You have 1 dry cleaning service company you’re using. What if they hold you hostage to a higher split of the fees or fail to deliver on time consistently? How could you get at least 3-4 cleaners to work with you?
  3. You want your sales funnel to be based on just 1 marketing pillar, namely door-to-door sales. What happens if it fails for 2 months and you only reach 1/3 of the sales you expect? What other marketing pillars could you use?(Online: Facebook Pay Per Click Advertising, Google Adwords; Offline: postcards, guarantees, one-time discount for sign up, etc.)
  4. You have 1 price set for each service. How do you know you are maximizing your profits? You need to price test to discover your ideal pricing level.People who need 24-hour delivery of clothing would pay a much higher price than someone who’s willing to wait 3 days.

    How can you split test pricing in different neighborhoods?

    The customer ultimately determines the price, not the competitor nor the business owner.

Where do you have “1” of something? It will show where your business could be at risk.

Set aside time to think every day. It’ll be the most rewarding thing you do.

 

Today, we’ve barely scratched the surface

Whatever stage you’re at in business, you need to be all over the numbers. In posts like this, we aim to offer bite-size food for thought – but in a few hundred words, we can only do so much.

If you’re ready to build your financial muscle, how about a FREE copy of James Vanreusel’s (highly-acclaimed) book for CEOs?

The #1 Key to Creating a Thriving Business takes you through the challenges of growing and scaling your company, from first to last. And you can request your copy here – no hidden fees, no strings.

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