Few of us will be familiar with the 1,883-word, 20 minute-long speech delivered by Franklin D. Roosevelt on the occasion of his first inauguration as US president on March 4, 1933. But most of us will recognise one sentence from it. “So, first of all, let me assert my firm belief that the only thing we have to fear is fear itself – nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.“
“The only thing we have to fear is fear itself.” A brave assertion to make at the height of the great depression. But Roosevelt was right. Fear and worry achieve nothing. Yet for many businesses fear holds them back from achieving what they are really capable of. Call it lack of confidence or call it fear. Either way, clients can smell it.
What do you fear in your business? What’s that fear based on? Is there any evidence to support your fear? And how much is that fear costing you?
What we need to understand is that fear is an emotion induced by a threat, real or imaginary. It is a basic survival mechanism. But it is one that can also destroy us.
Just ask my friend Alan. He ran a company where three customers accounted for 90% of his business. The company grew quickly as these ‘big three’ gave him more and more business. Alan bought himself a new Mercedes but he did nothing to reduce his over-dependence on such a small client base. He also feared losing any of them, so he didn’t increase his prices.
Alan’s fear passed to his team. They over-serviced, doing everything clients asked, often not charging for the extra work. As a consequence the company’s profitability declined. Then the inevitable happened. One of the big three left. Now Alan was even more dependent on the remaining two. A few months later one of them left, too. The company was completely on the back-foot. The last customer saw the writing on the wall and went the way of the other two. Eventually the business went bust.
So how do we keep our fear under control? You can’t learn to swim with one hand holding onto the bar. You have to step up and be brave. Ask yourself: “What would you do if you knew you could not fail?”
Here are 10 tips to reduce the impact of fear on your business.
Spread your customer base – no customer should contribute more than 15% of your overall revenue. If you have a client bigger than this, then ensure you have watertight contracts and long notice periods. If we have one or two clients who dominate our business, we are more likely to find ourselves in a ‘buyer-supplier’ relationship rather than a peer to peer relationship.
Expect to lose 15-20% of your customers each year. Do not simply assume that today’s customers will be tomorrow’s customers. Build a pipeline of new business. Don’t wait till it goes quiet. Every week, take time to look for new clients. Do it consistently and constantly.
Stay close to your existing clients. Look for small cracks in the relationship. Sort them out before they grow and certainly before they go past the point of no return. Ensure you meet or exceed your clients’ expectations.
Understand what your customers really value about you and understand your impact on their business. If you are impacting their KPIs, this demonstrates your value and builds your self-belief and confidence.
‘Make hay while the sun shines’ but build up your war-chest for the rainy day that will come. Build your reserves. Your reserves give you confidence to push back and be selective.
Focus on your long-term goals. Don’t let short-term goals compromise your long term goals. Think through the implications of your decisions and also any precedents you may be about to establish.
Think about how fear affects your team. They will pick up on your demeanour. Confidence and lack of confidence are highly contagious and spread rapidly.
Calculate the cost of your fear. What’s the cost of tolerating an unprofitable customer or not increasing your prices? What’s the impact on your bottom line? How does it affect your team and their morale?
Have those courageous conversations to address issues which need sorting and changing. Don’t avoid or keep putting off the conversation. If you’re not comfortable having them, seek training, prepare and practice.
Step out of your comfort zone – carefully. If you going to take a risk then think through the implications.
What are your top three fears for your business? How can you reduce the likelihood of those fears coming to fruition? What can you do to increase your chance of success so you have less to fear?
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Chris Merrington is the author of Why do smart people make such stupid mistakes?” His company, Spring 80:20 specialises in working with sales teams in their profitable growth and success.