Thursday, October 24, 2013

The story of the boiled frog

There once was a frog and he was really comfortable in his cool pond. But then the pond started to warm up just a little, and although he was aware of the water temperature rising he decided to stay. As the water became a little hotter and hotter he realised that it was too late to move and he was boiled.
This is a very famous fable for entrepreneurs and businesses, especially small businesses who often only have one large client. When that client pulls out the entrepreneur is boiled and goes under. Liquidated!
The way to avoid being a boiled frog are:
1. Generate a funnel of potential new business. This funnel should be documented onto paper and new leads followed up all the time. Some of the new leads will become real and sometimes it just doesn't work out. However without the funnel new business will never be created.
2. Strategise about new ways of doing things all the time. A good strategy will translate into new business and new leads, and often a strategy needs to be revised every 6 months.
3. My general rule is that for every 10 new leads 1 will be a success. So to have 10 new clients will mean I need to approach 100. This seems like a lot but the formula does seem to work.
4. If over time new leads don't translate into business then move on. My general rule is a maximum time limit of 6 months.
5. Keep focused on what your business does and don't stray too far from that focus. Many small businesses take on work that is too difficult because it is not part of the core business.
6. You should have many smaller clients as well as a large client. If one small client is lost then its not a train smash.

So the lesson here is important. When you are in a good place, and the water is cool and good you need to work very hard to keep it that way. The only way to do that is to generate a funnel of new business and keep working at it so you don't become a boiled frog one day.