Do you know:
How many clients, jobs or projects, based on your average job value, do you need in the next 12 months to meet your profit requirements?
When working with business owners for the first time, I find that this question tends to stump far too many.
Is it absolutely essential to know your capacity? Not really. However, I would like to discuss why knowing your capacity will give you a higher probability of reaching your profit goals than if you didn’t.
Imagine this scenario…
You call a company to enquire about using their services. During the call the person handling your enquiry gives the following statement:
“It’s great that you called today, because we are nearly at capacity for this month/this season’s intake of jobs.”
When you hear that statement, what subliminal message does it send?
It states, without mentioning it, that they are good at what they do because they are almost booked out (like a restaurant that only has a few seats left), and it also states that you need to make a decision quickly if you would like to take advantage of their services. The buying cycle shortens. These are the first two benefits of knowing and also stating that you’re close to capacity.
Let’s explore a few more…
Knowing your capacity relieves the scarcity mentality of many business owners that says “more is better”, and that you need to say “yes” to every job that comes along. When you say yes to every job on offer, you are also saying yes to smaller profits. Have you ever accepted a job just for the sake of filling the calendar and found you weren’t actually making a profit?
When you say yes to every job that comes along, especially at a busy time of year (such as the lead up to Christmas), then several negative consequences occur. Your inability to say no means that you are now cramming the schedule, which puts pressure on you and your team to deliver. The quality often suffers, which can then flow onto rework/faults, which takes extra time and costs you your profit. The customer usually ends up unhappy because it takes longer and you have overpromised the ability to deliver. No one wins. Sound familiar?
The final benefit to knowing your capacity, is it takes the pressure off you to have to continually sell, sell, sell.
If you know your numbers and the exact number of projects required to meet your targets, it allows you to work from a place of abundance and confidence versus scarcity and the fear of missing out.
For assistance in discovering your business capacity, contact PROTRADE United at www.protradeunited.com.au
Written by Jon Mailer
CEO of PROTRADE United