An informal survey of business owners conducted recently provided some interesting lessons learned that might be applicable to most anyone who owns or runs a business.
> Lesson one: If you get focused on growing revenue for your company, you will see the results. The effort has to be sustained as a major focus throughout the year; it can’t be a one-time thing! The companies that are successful in increasing their top line develop a plan and stick to it.
> Lesson two: There are four ways to increase revenue. One method used is to question discounts given in the past that might no longer be necessary. A second way is to charge for products or services previously given away. A third way is to sell additional products and services clients might buy that they are currently buying from someone else. The fourth way is to raise prices.
> Lesson three: To retain clients, time has to be invested. Client relationship management goes hand in hand with growing revenue. With all the distractions taking place during the course of a business day, out of sight is truly becoming out of mind, a very dangerous thing when companies are trying to maintain and grow their existing base of business. One way to address this is to schedule time to actually see clients face to face.
> Lesson four: Some clients are worth a lot more than other clients. The key is to identify those clients who are truly the best for the business and to either convert the less desirable ones or to shed them. This can be done by performing an 80/20 analysis.
> Lesson five: Some employees are worth a lot more than other employees. If the 80/20 is applied to employees, 20 percent of employees create 80 percent of the results. The question then becomes: What are the 80 percent of the employees doing all day and why are they on the payroll?
> Lesson six: Taking the time to analyze the results of the business pays big dividends. It isn’t just a question of determining who the best clients are, but how much time and other resources are spent servicing clients. Develop and measure those critical metrics that drive the business.
> Lesson seven: Every company has costs and expenses that can be reduced. Taking the time to identify expense areas pays big dividends. Too many companies get stuck with products and services that are “nice to have” versus “must have to operate,” and those pennies add up very quickly.
> Lesson eight: It’s acceptable to raise prices. While gasoline and housing prices may be dropping, prices for other goods and services are rising. Inflation may have cooled but still exists. Health care premiums are a great example. Clients expect to pay more for goods and services if the associated value is provided.
> Lesson nine: Everything takes longer to implement than planned. Taking the planning and execution cycle from 12 months to 18 months might be a more reasonable way to expect significant results to materialize.
> Lesson 10: Focus on the one thing that can dramatically improve the business. Often there is one significant obstacle or hurdle that if addressed and resolved will change the dynamics of the business.
Examples might include the elimination of slow or no paying clients; the increase in the minimum order size or a clearer definition of the ideal client based on size, industry or geography.
Taking positive steps to implement actions such as these might see a dramatic change in the dynamics of the business operation, cash flow and profits.
> Lesson 11: One hour of daily planning makes the rest of the work day highly productive. Leaders are paid to think and they can’t do that if they are so busy “doing” that they haven’t got the time to plan and reflect.
> Lesson 12: Have a marketing plan in writing. There are two reasons for this. The first is that it means you will always be marketing. The second is that it helps to focus resources on building a reputation in the marketplace for the long term.
> Lesson 13: Long hours don’t cut it anymore. Being and staying more efficient and productive during office work hours means that it isn’t necessary to go in early or stay late. Working longer hours does not mean people are more successful; it likely means that they are unfocused, doing unnecessary things that could be eliminated or delegated or are simply wasting time. Set concrete work hours and stick to them.
What lessons did you learn this year? Take a few minutes and write those lessons down as you reflect back on the year and as you prepare your goals and plans for the year ahead.
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