Sole Traders
Sole trading is hard: you take all the risk and your rewards are limited by what you can fit into a day. But there’s a strategy for sole traders to maximise their chances of success and the rewards they achieve, and Mike says it’s all about knowing what you’re good at.
There’s no water cooler, and if there were one, there’d be nobody else there. But most sole traders do what they do because they love it, and do it well as a result. It’s a great way to be in business, as long as you realize you can’t ‘scale’ it, and are thus unlikely to get rich.
What most sole traders do worst is sales. Yes, there are exceptions, but often the kind of character that makes a great craftsperson makes a lousy salesperson. This is very bad news. Emerson’s famous aphorism, that if you make a better mouse-trap, the world will ‘make a beaten path to your door’, is utter rubbish. You’ll just sit at home all day twiddling with refinements to the mouse-trap, writing angry letters to Mouse-trap World (incorporating Rodent Capture Weekly) and getting into debt. But you can’t hire sales people in the way you can an accountant. What can be done?
Mike now runs regular workshops on this subject: here are some edited highlights. You must network – and if you are painfully shy, you must make yourself network (or find ways of networking, such as the internet, which render you sufficiently invisible). You must cultivate your favourite clients and incentivize them to act as ‘evangelists’ for you. You must look out for ways of getting free or cheap publicity. You must be on the lookout for good strategic allies, for example people in complementary areas with whom you can cross-refer clients. You do not have the option of doing nothing about sales.
Innovation is probably the least important –dependable delivery, supported by lively, thorough sales and sound finances will do (though if you want to innovate, go for it – but remember that you may have a job taking your customers with you).
There are almost no business people who love finance, sales and delivery with equal passion. You’re lucky if you love one, don’t mind another and can just tolerate the third. But you must spend time on all three – despite the endless temptations to do more of the bit you like and to put off doing the stuff you hate. This temptation is powerful, because it’s more fun, and because there will be a voice in the back of your head saying that the other stuff doesn’t really matter. ‘The mouse-traps are going to make me rich, so adding another feature is time well spent – just wait till the customers start pouring in…’
They won’t.
If it’s any consolation, CEOs at the giddy pinnacle of corporate life suffer exactly the same problem. They will have learnt some parts of their trade more thoroughly and more joyfully than others; they will undoubtedly have a better feel for some aspects of their business than for others. But they must grit their teeth and master the whole picture: it is the areas they ignore where the troubles build up.