Building Your Concierge Business: Conquering The Fear Factor of Spending Money
You’ve heard the saying “you’ve got to spend money to make money”, but that doesn’t mean it’s easy to part with your hard-earned cash.
The fear of the unknown is what keeps us so tight-fisted with our own dollars. Planning, projecting, and frequent analysis of payoff are the keys to conquering this fear factor.
If you haven’t already, the first thing you need to do is to create a business plan. This can be as short and as simple as you want, but a business plan will help you project your start-up costs, your marketing strategies, and your company’s cash flow.
Next step is to create a monthly budget that details your expense needs—both fixed and variable and your realistic sales projections.
A business plan and a budget will help you feel a sense of control about when you can anticipate money coming in and going out. Managing your cash flow is the key to maintaining and growing your concierge business. The budget is actually one of the most important tools you have for long-term stability. Don’t just create a budget and file it away somewhere. Your budget should be updated monthly for the first year, quarterly in your second year, semi-annually in your third year, and annually after that. As you do your planning, keep reserves in your account for unexpected opportunities and unforeseen costs.
Be smart about your year one to year three expenses. Many a concierge business start-up has failed by purchasing expensive gizmos, office equipment, and leased space. None of that is necessary. You need a computer, a mobile phone, a car. I think you need a website to build your business quickly. A good website is a far wiser use of your start-up money than a storefront.
Price your services correctly. Be sure you factor in your rent, utility cost, part-time employee help, insurance, self-employment tax, legal fees etc. Don’t fool yourself into thinking you’re making money. If you’re charging $35/hour, you’re only netting a percentage of that.
Spend money on acquiring customers. In the beginning, any extra money you have should be invested in finding new customers. My personal rule is to reinvest a minimum of 5% of all revenues in marketing and promotion efforts. A well-produced flyer distributed in your community, a slick 4-color postcard sent to a targeted list of potential customers, a professional banner to hang at community events, paying an expert to optimize your website to get you to the top of search engine results are investments. Test different marketing vehicles until you find the best use of your marketing dollars, then amp those up when you can.
A final few thoughts. If you believe in yourself now’s the time to show it. Many, many others are sitting on the sidelines waiting for the “right time” to launch their dream. Bet on yourself and be the market leader.
Since your goal is new customers and growth you need to commit to spending a little to make a little more. And as you scale that up and spend more, you should be making more and more money through new customers. Don’t be afraid to spend money on quality investments in your business, the results down the road will more than pay for your initial investment and help you continue to grow your business.