When Irit Eizips first started CSM Practice, they began with a per-hour business model. As Irit would soon find out, that business model has a multitude of issues.
Steps to best optimize your business by shifting business models
Most businesses start by charging their clients by the hour. Unfortunately, there are inherit issues with that business model including:
- Estimating how long it will take to do a task…wrong.
- Budgeting too many hours
- Not budgeting enough hours
- Budgeting for a certain number of hours, but customers aren’t prepared for the amount of resources needed.
In order to address these issues, Irit optimized their business model by first adding flexibility. In this case, it meant that CSM changed to a prepaid business model.
Step #1: Talk to other people in your industry
While you can’t always rely on others in order to move you and your business forward, the same can be said of only generating ideas without the influence of others. When you talk to other people or analyze the habits and techniques of your competitors, you can get further insight on the trends of your industry. Not only that, you can also see if their implementation worked, how it didn’t, and bring all that information to the table when your team discusses their best practices.
Predictability in an agency standpoint is so important.
Step #2: Partner with the customer
It is important that your company and your customers connect and partner together for a specific goal. Irit does this by meeting with her clients on a quarterly basis to figure out:
- What are their business priorities?
- How can you help them accomplish those?
This should be a recurring conversation with customers on a quarterly basis.
Irit’s customers love these workshops because they get so much out of it and it is a great way to connect and build your relationship. It is a win-win relationship for everyone involved.
We track it to the customer’s outcome, not to the scope of work.
Weekly Internal Calls For Each Project
Irit conducts weekly internal stand-up calls for each project. During that time, they look at the following two weeks and ask the questions:
- Do we have enough touchpoints with the customer?
- Have we preplanned ahead of time?
- What are the business outcomes we want to achieve this month for this client?
Resources or books that Irit recommends:
- Tools that Irit uses in her business: Quickbooks and Hubstaff are the tools that Irit uses in order to track hours.
- For service based companies: How To Start, Scale, And Sell A Professional Services Firm by Greg Alexander
- The Collective 54 (membership organization for owners of professional services firms)
- Listen to and watch other people in your industry and find an advisory board of people you can trust within your industry
- The CSM Practice YouTube channel
PERSONAL MISSION STATEMENT: Be kind. Try to do a thankless good deed each day.