This months Mind Your Business takes a darker tone with Mark Simon channeling the death dealer of business to explain the 80/20 rule.
(This article is best read with a thick, deep Ian McKellen accent in your head.)
Gooood Evening I am the death dealer of business. I stay quite busy when freelancers and small business owners are not familiar with one of the basic rules of business, the 80/20 rule.
Aarghh, the 80/20 rule. Every death dealer hates it. People who understand this rule tend to thrive and survive in business. Trust me, I dont want to share this with you, but Ive gotten so many parking tickets while dealing death to businesses, Im under a court order to provide community service, so here goes.
The 80/20 rule. 80% of your income will come from 20% of your clients.
Pretty simple. Thats it. Heh heh. Of course you have to understand it and know how to apply it before it benefits you.
One of the hardest parts of running a business, whether its owning a company or freelancing, is landing new clients. Many people try over and over to get new clients. All their time is spent trying to impress someone new to pay for their services, sometimes to the detriment of their existing customers. New clients are great, but its much more time-consuming and expensive to always land new clients than it is to offer outstanding service to get repeat business from your existing clients.
All clients want the same thing. They want suppliers to do a great job, to work with someone professional, for each project to go smoothly, each project to be delivered on time and to find reasonably priced services. Actually, they will sometimes forgo reasonably priced services if someone is fantastic to work with and makes them look good.
A client who is happy with your service and feels that you treated them with respect will come back. Clients that continue to come back are likely to be your biggest moneymakers. Consistent cash flow comes from returning clients.
There are other benefits to providing a great service with a great attitude. Your clients will be easier to work with. Clients who feel well taken care of will treat you with more respect. Your working conditions will be nicer. You will feel better about what you do. Your portfolio will continually improve and you will make more money. Ooh, it hurts just saying that.
The 80/20 Rule has other abilities to keep your business from going six feet under. Your existing clients are the best people to inform of any new or unknown services or products you provide. Happy clients already like working with you and/or enjoy the products you sell. They are predisposed to buy your new products and services. It will take less effort to sell to them than to new customers.
Consider that a client is like a fan of your work. Much like fans of authors will always buy their next novel or comic book fans buy whatever new title their favorite artist is on, your clients will more than likely take advantage of your new or unknown services.
When you take care of your clients, they will take care of you. There is no better advertising than referrals, especially in the arts and entertainment industries, and happy clients will pass your name onto others who are likely to hire you.
Its also OK to ask for referrals. When you deliver a job to a client and they are thrilled, thats a great time to ask them for a referral to someone else who may need your services. You will be surprised how often simply asking for a referral leads to new clients.
Personally I would rather see you have a bad attitude, deliver late to your clients, be hard to work with and offer a rather poor quality. My death-dealing business would boom.
I wish my business were this easy. We death dealers seldom have repeat business. Thank god for bankruptcy laws or wed have no repeat business at all.
Before your business ends up in the graveyard, take a look at how you can better support your existing clients. At least 20% of them are likely to be your businesss lifeblood.
Mark Simon is an award-winning animation producer, storyboard artist and lecturer who is also the author of books for artists such as Facial Expressions: A Visual Reference for Artists, Producing Independent 2D Character Animation and Storyboards: Motion In Art. He can be found lurking around his animations at www.FunnyToons.tv, his storyboards at www.Storyboards-east.com, his books may be found and purchased online at www.MarkSimonBooks.com and custom résumés for the entertainment industry can be found at www.YourResumeSucks.biz. Mark may be reached at MarkSimonBooks@yahoo.com.