This is the fourth and final blog in our series on scaling. For this post, we have worked in collaboration with Philippe Mauchard, one of our managing partners, who has previously ideated, designed and led the McKinsey Solutions unit, comprising some 40 startups (now several scale-ups) in the area of business decision support services globally.
When it comes to running a business, clients and money are like cholesterol. There’s good and bad cholesterol, and the key is to identify the bad and avoid having too much of it.
Think about it in relation to professional services: say a client is asking for one-off things before anything concrete happens, it isn’t replicable and/or they ask for exclusivity? In this situation, can you have the best of both worlds?
While we can refer back to the happiness equation in our last post, let’s look at the questions you need to ask yourself:
Do you like the person(s)/client organization? Do you have experience with them (any red flags)?
Is it good work? Will it be “fun” to do it?
Could this become something bigger? Can you hope for something more out of it?
Of course, like with many things in business, there can be caveats. If you aren’t crazy about the company, but you like the person you work with, then maybe it can work. Or, if you want the work to be something bigger, perhaps you can request for it to be more of a commitment (a contract, prepayments, etc.). Or if it’s one-off work with a company you like, is it something that is replicable in its material and process? Or could you learn a great deal from it; is it usable in a broader context (i.e., does it have the potential for “paid R&D/market research”)?
It’s important to recognize that not all of these aspects can be low--something has to give in the scenario in order for it to work. Otherwise, you’re just adding bad cholesterol to your business.
There are, of course, some challenges with adding bad cholesterol to your business, but cholesterol is a continuum. It doesn’t exist in silos, especially in a small structure, and there’s a risk of loss in translation in the end. It all comes down to what you think is worth the bad cholesterol.
And of course, there is the good cholesterol, namely the professional services you really ought to excel in:
Making what you offer as relevant as possible to the client use cases upfront
Onboarding clients swiftly for rapid and relevant impact from your offerings
Ensuring that the use of your product is a fulfilling experience - so they want it to continue
And as a rule of thumb, if you are considering yourself a “product company,” ensure that your revenues from services are in the 80/20 zone (product/services) over time.
Interested in learning more about entrepreneurship and scaling your business? Be sure to attend our Fin & Tonic on scaling on November 30.