By Speeding Up Your Service Delivery Time

One of the keys to running any successful business is managing your cash flow.  The sooner you get paid, the less you have to worry about managing any cash crunches. 

Cash Crunch Example (What You Don't Want)

Let me give you an example.  You're rolling out a new service and you need to put money into marketing it - so you decide to spend $5,000 on Pay-Per-Click for a month (not the best way to do PPC but that's a different story for a different day).  At the end of the month, you've gotten 100 new leads for the new service that you're offerring.  Of those 100 you start the sales process with, 20 end up purchasing your product or service, and it takes 45 days to get through the sales process.  It's now about 60 days since you started the campaign and about 30 days since you had to pay the $5,000 from the campaign.  On top of the $5,000, you may have a lot of product development costs that you need to start paying off.  You need to start getting money soon.  If you're selling some sort of customized service like web design, you won't get paid until you deliver the service.  You get paid a lot sooner if you deliver in 15 days instead of 30, 60, or 90 days.  

This means that it could be up to 150 days since you started the campaign and 120 days since you had to put the money down for the campaign.  If you're running $5,000 campaigns every month, you have over $20,000 of cash out the door until any money comes in.  On top of that, there is the stress and pain involved with working with the client to get them motivated and moving on the project.  Being out a lot of money and times are not ways to becoming a Lazy Business Owner.

Getting Paid Sooner

What if you could cut down your service delivery time and get paid sooner?  This reduces the amount of cash you have outstanding (working capital) and it means less headaches for you in getting the customer motivated to work on the project.  The Surfing Guru taught us a good lesson based on his experience with reducing service delivery time.  When he sold his product to his customers, they originally needed to come up with the copy to go on the advertisements.  This created a ton of headaches and long service delivery times as they worked on hounding the client into getting the work done.  Clients just weren't motivated to get the work done and there was nothing he could do about it.  So he went through a few slight changes that:

• Dramatically reduced the service delivery time
• Reduced his working capital
• Significantly eliminated a lot of time spent hounding the clients
• Made the service much easier for the clients to use

In the first change, he provided the client with example copy that they could use when writing their own copy.  This reduced one of the biggest hurdles they faced - coming up with ideas.  However, they still had to write it themselves and send it back - again, you're totally dependent on the motivation of the client to get the work done and get paid.

In his second change, he actually created the copy himself.  He took the base copy, added in the client's information, even inserted their signature from their enrollment form, and sent it to them for their approval.  For the majority of the clients, they would just sign it as approved and it was all done.  The other ones would just have to make a few suggestions on it, and everything was done. 

Every Business is Different

This example isn't meant to show you what you need to do to improve the service delivery in your business.  It's just meant to show you the need to reduce the amount of time it takes to deliver your product or service.  One of the biggest problems we had when we started out was chasing our clients to get their information for projects that we were working on.  By providing them as much information as possible and making it as easy as possible, you will reduce the amount of time you spend in the business (key to being a Lazy Business Owner) and reduce the amount of time until you get paid (also pretty important to being a Lazy Business Owner).