Let us introduce you to DHH, he is a software guy who has a really radical view of how a business should function. Let me unpack for you the things I took away from this video as an owner of a piano service company.
People who have never worked for someone are really bad managers
Corporate America does a really good job at one thing, teaching people how to manage projects and people. Some thrive on this model, others get their soul crushed. But when you survey the landscape of people who are running piano service companies, everyone it seems is a solopreneur. If you look closer some people do a better job managing their company than others, and by extension find more success. However, when you ask them for a job you often are met with resistance. Why?
I think the answer is in the individual. I didn’t know I was a horrible manager until I hired people. When a solopreneur becomes a manager, their weaknesses are put on full display. It is a challenge, and if you don’t prepare and focus on becoming a great manager then your business will suffer.
Build profit into your company regardless of your size
If you don’t have a profit then you have a failing business. Now DHH runs a wildly successful software product that supports millions of users with 15 employees. We run field service companies that are not as scalable. But the truth of this statement is the same. If you don’t have profits your piano service business will suffocate. It is that simple. If you care about the future of our industry, then you need to build a profitable business.
How much profit should I have? Around 10% gross margin is good in the service industry. In layman’s terms, this means you are putting aside 10% of your revenue into a savings account that you never need to touch. The other 90% gets spent on your expenses and paying you wages. If you are spending more than 90% of your revenue then you have a big problem on your hands. Either you are mismanaging your company, spending too much, charging too little, or not filling your calendar with enough work. Profits are simply a sign that you are a healthy business, so if you don’t have any then you need to wake up because your business is on a suicide mission.
You can’t outspend big money, but you can out teach them
You need an audience, not customers. We are quickly moving into an era where personalization and education are more important than the product you sell. In a world where you can easily learn anything you want, the businesses who survive will be the ones who learned how to out-teach their competition. All of your marketing needs to be focused on teaching your customers about their piano. Who cares if you are the best piano technician in town or not. If you out-teach your competition then you will build an audience that turns into your ideal customers. It is all about building an audience. Remember that and apply it to your business today.