How to find the sweet spot between what you know, love & what people will pay for in your small business. A model to make it easier!
Are you a leaper or a planner?
The first version of my small business came about after I had burned into a tiny frazzled husk from working in government. Pretty much any other option (including weapons check assistant for the zombie apocalypse) seemed like a good alternative.
I meant how hard could it be? You just think of an idea, register a name and head off into small business nirvana.
Nirvana turned out to be a bad 1990’s rock group, and the first iteration of my business self-destructed in a cloud of burned money and self-loathing. It was only marginally less memorable than the permanent exit of Nirvana’s frontman, Kurt Cobain.
I returned to a series of deeply uninspiring j-o-b’s, regained my emotional strength and forgave myself for my lack of skills and foresight.
The second version of my small business happened when I decided that I wanted to be paid to write. I landed what seemed like a great gig with regular income while I was working at a j-o-b, and went to my then boss with my plan.
In the plan that I had carefully run through my head a few thousand times, I was going to confidently look him in the eye and say, “I would like to go part-time,” followed by all the reasons why this would be good for his business.
Instead, I walked confidently up to him and said, “I would like to resign.”
I am not sure who was more shocked at those words – him or me. If you have ever tried recalling a sent email, that was me. I tried shoving the words back in my mouth, but they were already out there.
Freud would have been proud!
Was I any more prepared for my second round in small business? I was as prepared as two weeks’ notice, and one week of emergency savings could be.
While the writing contract polished off my copywriting edges, the volume of contract work from my sole supplier silently sidled away, in as much the same way as mothers do when you mention that your child has head lice.
However, in my time away from my business, I had done a lot of soul-searching, and research. And while the contract soon became an itchy memory, I found I had hit a personal business sweet spot, and things rapidly improved.
Finding Your Business Sweet Spot
When you are starting or building your small business, it’s easy to get overwhelmed by all the talk of niches and unique selling propositions (USPs). You read everything written on niches, run numbers faster than Usain Bolt and research what your potential competitors offer.
You then head to the freezer and binge eat chocolate chip ice-cream until the brain freeze overtakes your brain explosion from all the “stuff” that you have no idea how to make head or tail of.
That’s all too hard!
A few years ago, my colleague Tad Hargrave, started me thinking about finding the intersections for your business, as a way of finding your business sweet spot.
After turning it around and around in my mind like the worry stone in the pocket of a mother teaching her daughter to drive, I realised that finding your sweet spot was simply finding the intersection of what you know, what you love and what people will pay for.
Your business sweet spot is where all three things come together in a glorious, messy whole.
What You Love
“What do I most love to do, learn or experience?”
If you get stuck, think of all the things that you lose track of time doing. Think of the top 5 wonderful moments in your life and what made them so special. Think of your favourite projects you did in the past year, and what specifically made them brilliant.
And keep writing until the timer goes bing.
Remember, sweat the details here. You don’t want high-level dot points, but the specifics of what particular bits you love to do.
Now read back over the two lists to see if anything appears on both lists.
What You Know
Set the timer on your phone for 10 minutes, and then ask yourself
“What do I know most about in work, hobbies and life?”
Then jot your dot point list of knowledge continuously and furiously for the full 10 minutes.
If your brain draws a blank, then ask yourself “What ELSE do I know about”.
No filtering! Put everything that turns up in your brain whether this is related to work, management, life, love, break ups, ill health, parenting, repotting geraniums, removing dog fur from clothes … just keep listing until the timer goes “Bing!”
You want to be as specific as possible. So, you wouldn’t put down human resources (for example), you would put down executive coaching, strategic planning, etc. No high-level stuff – the more detailed, the better!
When the timer goes bing, then get up and stretch and grab another coffee (maybe a decaf because you don’t want to go jittery), while you read over your list. If new things appear in your mind, add them to the list.
What People Will Pay For
One of the things I discovered with small business, is most businesses earn their money in one of two ways.
They provide a service or ready made goods for people – or the “Do it for me” model.
Or they teach people how to do it for themselves – or the “Teach Me” Model.
The two services are generally mutually exclusive. People who want to learn to DIY will only move to a “Do it for me” model if they have tried and failed dismally.
People who want you to do it for them, are not really interested in learning to DIY.
When you are looking back over your lists, to help you work out if you think people will pay you to do that, ask yourself can I teach someone to do this? Can I do this for someone else?
Next, do a quick and dirty prune of your two lists. While I happily lost track of time watching my beloved newborn babies sleeping, I struggled to see how people would pay me money to watch my kids sleep.
Go through and cross out anything on your list that is for you obviously unmonetizable.
This doesn’t mean it is definitely unmonetizable – it just means that you can’t figure out how right now. If an Asian lady can get paid for smushing her face into bread (go and Google @breadfaceblog … I’ll wait), then anything is possible.
One key thing to remember. The closer you are to the business sweet spot, the more money people will pay you to do the thing that you know and love. That’s another reason to keep digging until you find the sweet spots!
Exploring the Intersections
With the items left on your list, allocate them into the diagram. Are they things you know, things you love or just things that people will pay for? Do any of them cross over into different sections?
What You Know + What People Will Pay For
This intersection does not set your soul on fire, although it may trigger thoughts of arson in your in-tray if you had to do this all day, every day.
If you run your business in this intersection, you will earn income, but it will not be in business your sweet spot, and you will not love what you do.
To move tasks or services into the sweet spot, mentally flip how you could deliver it. Swap Do it For Me to Teach Me, or vice versa.
Another way is to acknowledge that you like the money but will never like doing the thing, and so you remove yourself from the process as much as possible. See if you can systematise the thing or deliver the thing it digitally.
For example, one of my strengths in Human Resources was my ability to write clear and useful HR policies. However, I hated working with managers and teams to implement them. By turning my knowledge into a system that could be automatically digitally delivered, that thing moved into my business sweet spot.
What You Know + What You Love
To move the tasks or service away from just a hobby and into the business sweet spot, you generally move from Do it For Me into Teach Me how to do it.
For example, if you love baking cupcakes, but find that selling your cupcakes is not generating enough to pay your mortgage, then consider running classes either online or in person to teach people how to make cupcakes.
You could also sell raw materials to people who are doing what you love to do, so may find selling decorating tools, patty pans or cake pans is your business sweet spot.
What You Love + What People Will Pay For
You love doing this thing, but you know less than you really should to be able to do it properly. But because people are willing to throw money at you, you do the bits you know and hope that it doesn’t come unstuck.
I see this a lot with hobbyist website developers, who know a few things but don’t realise they are leaving the light on and the key under the mat for hackers. This is bordering on negligence for their clients.
We also see this with handymen who try their hand at illegal electrical wiring, and consultants who say yes to projects outside their skill set.
On a plus, this is where the best learning opportunities are. This is where you work out what courses to take, which Uni programs to enrol in and which skills you need to develop.
You already have a demonstrated market – you just need to run to catch up!
Moving Your Business Into the Sweet Spot
No sustainable business has just one sweet spot. You are likely to have a few goods and services that could find their way into your business sweet spot, and you may find that what is a sweet spot changes over time as you change and as your clients buying habits change.
By regularly doing this mapping exercise, you keep your business focused on what works best for you and your business finances.
I do this mapping exercise every year, to find new areas of service to test out and potentially deliver.
I then use my shortlist as a basis to check if any of my competitors are offering similar products and services, and to check if there is a demand for it based on searches on Google and requests from my clients.
In other words, I still do my research and planning, but the focus is now much narrower and more likely to get results.
This also helps me to stop racing after bright shiny objects that I may love and know, but without grounding it in the reality of business finance.
Yes, I am still a business leaper, but now I put a little bit of planning around my leaping.
Of course, another way to find your small business USP is simply find the things that tick off your clients about your industry, and then fix that! Both options are equally valid. Just find what works for you!