"Holy crap, I thought. Pumpkin farmers hold the secret formula for big-time entrepreneurial success. My get-out-of-jail-free card. The Holy Grail. The missing link. My Golden Ticket. (Yes, it was all of those things to me, and more, so much more.) There it was, in black and white...and orange. The answer I’d been looking for, for years. I needed to treat my company like a giant pumpkin!"
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Almost every farmer grows ordinary, run-of-the-mill carving pumpkins. Similar to how almost every entrepreneur runs an ordinary, run-of-the-mill company. Imagine if you could change your ordinary company so that it got all of the press coverage and attention that the farms who grow those giant award winning pumpkins get? Mike Michalowicz’s The Pumpkin Plan is the how-to book to walk you through it.
The Big Idea
Find the right seed
"Don’t waste your time planting seeds that may or may not work. Plant the seed that you know has the very best chance of making it, and then focus your attention, money, time and other resources on that tight niche until all of your entrepreneurial dreams come true."
It was news to me, but farmers gather every year in Niagara Falls to attend the Giant Vegetable Growers Convention. It is here where the prized vegetable seeds can sometimes fetch hundreds of dollars as they will produce the giants we see on the 6 o’clock news each Fall.
Michalowicz correctly identifies, and I completely agree, one of the biggest problems in small business – owners trying to please everyone. Small business owners sometimes take on projects that are outside their area of expertise. Michalowicz explains that you need to really define your area of expertise and don’t stray from it – ever. He describes this right seed as the sweet spot – the place where your best clients and the best part of your business meet. When you figure out the one thing that you do really well, it’s like the right pumpkin seed.
This is nothing new mind you…but he does an outstanding job of breaking it down in a way that helps you understand what the sweet spot actually is – the intersection of your top clients, your unique offering, and your ability to systemize it.
"More is not better, people. Better is better. You need to shift your mindset away from the quantity game. You need to stop killing yourself for scraps."
As each chapter progressed, I bought in more and more to The Pumpkin Plan. I did have some difficulty with this one concept, but I believe it to be true. You need to stop wasting so much time on the clients who are high maintenance, who never pay on time (or ever), the clients who always change the scope of the project, and the clients whose calls you dread. Every small business has clients who drain energy and use valuable resources with little or no return.
Michalowicz suggests that you use an Assessment Chart (which he provides) to identify your best clients. Fire everyone else! You can download the chart (and many other goodies) from the website – www.PumpkinPlan.com
A tough pill to swallow; talk about risky. I can see the value in this though. In a past business I owned, we fired a big client and it really worked. We dropped a client who represented a third of our revenues, but used about 80% of our resources. It was one of the most difficult but best decisions I had made as a small business owner. It allowed us to focus more on the clients that we enjoyed working with, and we were better able to service them. It also allowed us to generate sales and find more clients like the ones we wanted to work with. Michalowicz also gives you techniques to fire clients: Eliminate services, prioritize service calls (when good clients call they get serviced first), raise prices, and refuse to two-time – explain that you have an agreement with a major client that prohibits you from servicing them. These may sound harsh, but can be extremely beneficial.
The Tourniquet Technique
"The beauty of the Pumpkin Plan is that once you kill off the diseased and unfit clients and shift your attention to your most promising clients, you have the opportunity to cut all expenses that don’t serve your top clients – everything from phone lines to parking spaces. It makes cutting expenses so much easier. You can see what has to go and because you’re trying to grow a massive, prize-winning pumpkin, you have the emotional leverage to get real with your P&L and stop the bleeding. I call it the Tourniquet Technique."
Cash is the lifeblood of any business. You’ll never make it if you don’t have enough – and most small businesses don’t. Michalowicz talks a lot about how we are always waiting to land the next client. “This next one will change things. I just need that one huge client…” But the problem is that IF we land them, we run out and hire new staff, get a bigger office, a new show room, a new car… We spend what we earn, plain and simple. But when we run out of cash, the trouble begins.
The Pumpkin Plan requires you to cut the expenses that are associated with the clients that you just cut. Sounds easy, but it’s not because we are used to having an assistant, an office, the showroom, extra staff, and the support systems. Michalowicz gives you a few ideas to stop the bleeding; going through your profit and loss statement line by line is the most relevant. Taking a good hard look at every expense is key. Cutting staff, giving up the office, missing that national conference – really cutting costs is hard. But you must. Creating an org chart for each position is also valuable. This helps eliminate any confusion and helps establish roles and responsibilities.
I really liked Michalowicz’s style. He likes to throw around some language that isn’t for the weak of heart, but he’s smart in the way that he drops F-bombs to make a point. He’s someone who I could easily see myself enjoying several beers with while discussing business. At the end of each chapter, he picks a business (Financial Planner, Artist, Tech services, etc.) and uses the Pumpkin Plan to revolutionize it. He does so in such a way that you can better understand the techniques and apply them to your own business. Whether you are thinking of starting your own business or have been in business for years and are stuck in a rut, The Pumpkin Plan is a must-read.
Would you be willing to fire a majority of your clients?