More Business than You Can Handle?

John Tabita

Have you ever had a prospect tell he doesn’t need to market his business because he has more business than he can handle? Did you believe him?

“I already have more business than I can handle” is one of the most common blow-offs you’ll hear when prospecting. The trouble is discerning if it’s really a blow-off or whether it’s true. Some businesses do have more business than they can handle. But why? It’s been exactly two years that the Great Recession was “officially” declared to be over.

Unfortunately, many businesses didn’t get that memo. Most are still struggling. So who are these fortunate few with more business than they can handle, and how do I get a piece of that pie?

People who truly have more business than they can handle fall into one of two categories:

Complacent

These are business owners who provide quality work for a fair price. They are happy with the amount of business they’re getting. They’re making money and paying the bills. They may be in demand because of the quality of their work and are usually booked weeks (or months) in advance. If more people want to hire them than they’re able to service, they have no problem turning them away or recommending them to a competitor.

(I know of a local painting contractor who fits this description. Yet, ironically, he still markets heavily during the off-season to stay busy all year around.)

Overwhelmed

These are business owners who get so much business because they charge so little, yet feel obligated to serve every customer or client who knocks on their door. Hiring extra help is out of the question, because they aren’t making enough money.

For these overwhelmed business owners, the solution is surprisingly simple: raise your prices.

(Of course, telling them that often elicits a blank stare back in response.)

What these overwhelmed business owners don’t realize is that the reason sooo many people want to do business with them is not because they’re so good. It’s because they’re so cheap. What’s more, being the low-cost leader means you attract the price-driven buyer. (You know, the cheapskate who grinds you down to the lowest price, yet demands the best service, who complains every chance he gets, then asks for a refund when you can’t satisfy his unreasonable demands. But I digress.)

Perhaps you’re one of those overwhelmed by too much business. FreelanceSwitch has compiled a list of the Top Ten Signs You May Be Charging Too Little:

10. Your clients mistake your daily rate for an hourly one.

9. You’ve won every job you’ve ever bid on.

8. Even though you work 80-hour weeks, your income level qualifies you for welfare payments.

7. New clients are always asking what “the catch” is.

6. Clients pay your invoices in cash from their wallet.

(You can read the rest here.)

Most people believe that raising prices equals less business because fewer people will want to do business with them—when the exact opposite may be true. What about you? What do you think?

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  • http://twitter.com/justinavery justin avery

    I agree with the too cheap statement. The best thing that you can do is set your price and stick with it. If someone asks for a discount DON’T DO IT unless of course they can offer you something in return. That might be a glowing testimonial, or some free products that they offer. If they’re a high priced brand they can probably afford anything you put on paper, but securing that as something for your portfolio might be higher on your agenda.

    I charge at my set hourly rate, and if I get the feeling that the client is going to be troublesome I add on the amount that I think makes it worthwhile having to deal with troublesome clients. More often than not they don’t go with that quote, but I don’t mind because at the end of the day if you’re not enjoying working with someone then it detracts from doing something I really enjoy and makes it feel like work again.

  • http://trifecta-tech.com/blog Trifecta Tech

    Absolutely agree. Also many companies do not consider the hidden costs of dealing with a bad client: the hours of time that you have to spend to tend to their many complaints, the several revisions that may be necessary because the client feels that you should be available for their every whim, and the added stress in your life which could make you a less efficient worker.

    Also as you raise prices and get fewer clients, your revenue could very well not decrease because of the price difference, but your workload will most likely decrease. You can spend that extra time marketing to get even more clients!

  • Anonymous

    I was thinking the same thing, if you have more business than you can handle then you need to raise your prices. Like Justin, I too include a “handling” fee with particularly troublesome customers.

  • http://twitter.com/adityamenon90 aditya menon

    Yes, there’s only one way to making real money. Choose what you want to do. Become the BEST at it, in your vicinity. Take the HIGHEST price than anyone else in the vicinity.

    The better you get at what you have chosen to do, the term “vicinity” expands to include more geographic area. The larger the geographic area, the more money you’re going to make.

    Translation: Choose a niche to work in, and work hard to become the best in that niche. Did Google Founders ever think of owning an Oil Rig before Google became the multi-billion giant it is today? nope. Their niche: computer science.

  • Sarah Welle

    I think another reason some small businesses have “more business than they can handle” is that they can’t handle managing & fulfilling all the orders. I’m speaking from my own personal experience of running a product based business (small toy manufacturer) that sells to a very large number of very small retailers. The sheer amount of communication required to manage & fulfill these orders is slowly killing me…but I don’t want to give away a big margin to reps.