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Starting Out

What you sell is not the same as what you do

Small businesses describe themselves by activity and are bought for outcomes, and the gap between the two shows up in pricing, marketing and the kind of client who arrives.

By Arjun Nair3 min read

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Photograph by Ketut Subiyanto via Pexels
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Two descriptions of the same business

Ask most independent workers what they do and you will get a description of an activity. The verb comes from the trade — building, designing, cleaning, advising, fixing, writing. It is accurate, it is what fills the day, and it’s not what anybody is buying.

What clients buy is a change in their situation. The room becomes usable. The accounts stop being frightening. The thing that was broken works, and stays working, and they can stop thinking about it. The activity is how you produce that; the change is what has value to them.

This is not a rhetorical distinction. It shows up in the price, in who gets in touch, and in what those people expect when they do.

Why the distinction changes the price

An activity has an obvious comparison. Anybody else performing the same activity is a substitute, and the buyer with no other information will compare on price, because price is the only variable they can read.

An outcome is harder to compare, because outcomes differ. Two people doing nominally identical work can deliver quite different results, and where a buyer understands that, price stops being the deciding variable. That is the whole mechanism behind why specialists earn more than generalists doing similar tasks: not superior skill necessarily, but a narrower promise that fewer people can make.

It also determines what a price rise feels like to the client. Charging more per hour is asking for more money for the same thing. Charging more for a better-defined outcome is a different proposition, and it is received differently.

The gap is where the wrong clients come from

A business advertised as an activity attracts people shopping for that activity, which is a broad and largely unfiltered group. Some of them will want something you don’t want to do, at a price you do not want to take, on a timescale you cannot meet.

Every one of those enquiries costs a morning to answer, quote and decline. That cost is invisible because it never appears on an invoice, and it’s one of the larger hidden expenses of a badly defined business.

Narrowing the description filters at the front. Fewer enquiries, a higher proportion of them appropriate. Most people find that trade uncomfortable in prospect and obviously correct in hindsight.

How to find what you are actually selling

The reliable method is to ask past clients why they hired you, and then to listen for the answer you did not expect. People frequently name something the provider considered peripheral — that they answered the phone, that they explained things without condescension, that they turned up when they said they would.

That is not flattery to be brushed aside. It’s a description of what was scarce in the market as the buyer experienced it, and scarcity is what a price attaches to. If three unconnected clients name the same thing, that thing belongs at the front of how you describe the business, whatever your own view of its importance.

The second question worth asking is what they tried before they called you. The answer maps the alternatives a buyer actually considered, which is rarely the list of competitors you would have written down, and it often includes doing nothing at all. Knowing that a large part of your market is currently choosing to live with the problem changes what the marketing has to argue for.

Narrow does not mean small

The common objection is that a narrow description turns away work, and in the literal sense it does. What it also does is make you legible. A person who solves one recognisable problem gets recommended by name, because the recommender can complete the sentence. A person who does a bit of everything is difficult to recommend even by people who like them.

Referrals are the cheapest work most small businesses ever get, and they run on legibility rather than breadth. That is the argument for choosing a description you would rather be known for, before the market chooses one for you out of whatever you happened to accept in the first year.

There is a fair objection to all of this, and it deserves stating rather than dismissing. In a thin local market, a narrow description can genuinely leave you without enough work, and the general practitioner who takes whatever the town needs is making a rational response to that. The distinction is between narrowing the description and narrowing the capability. You can be known for one thing and still accept other work when it arrives; what you cannot do is be known for everything.

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Arjun Nair
Contributing editor, Biz Wealth Focus

Arjun has written about starting out, pricing, cash flow for most of the last decade and is happiest when a piece answers the question completely.