Very simply: The business owner should be concentrating at least 80% of their time on either increasing revenues or lowering costs.
Bill Glazer, author of Outrageous Advertising that’s Outrageously Successful (get it and read it) says,
“I have a two thing business –
Getting new customers and keeping them as long as possible.”
That covers marketing about as succinctly as possible. He does elaborate by stating that the business owner should concentrate on the following four areas:
- Optimizing your selling strategy to find the best way to sell your product or service.
- Improving your lead generation.
- Improving the conversion of leads into paying customers using a structured follow-up process.
- Extracting the maximum value from your customers by up-selling, cross-selling and selling add-ons.
We discuss this in much more detail in this issue’s article called Sales to Current Customers Is the Fastest Way to Increase Sales Without Spending a Fortune!
The second part of the formula is lowering costs. This is the quickest way to increase profits because every dollar saved is a dollar added to your pocket! The areas where you can cut costs are almost endless. Here is a partial list:
- Reduce the cost of producing or buying your product or service.
- Implement systems for all tasks so they can be performed by a lower cost employee.
- Lower the cost of customer service without lowering the quality of service.
- Implement tax-cutting procedures (tax planning).
- Re-engineer processes to better utilize employees rather than throwing more people and money at a problem area.
- Eliminate or outsource unneeded employees, especially those that have no direct effect on the customer experience.
- Reduce marketing costs by eliminating those methods that don’t perform. This means you know which ones are working—you do, right?
- Lower your shipping costs.
- Collect your receivables.
- Cut your inventory loss.
- Read the our article in this issue called Sales to Current Customers is the Fastest Way to Increase Sales Without Spending a Fortune and implement the action tips mentioned.
- Identify the largest expense items in your business (usually employees and cost of goods sold) and focus on controlling and cutting those first.
- At least quarterly, review all other expenses for ways to save.