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 the marketing about as succinctly as possible. He does expand by stating that the business owner should concentrate on the following four areas:
- Optimizing your selling strategy in order to find the best way to sell your product or service.
- Improving your lead generation.
- Improving the conversion of your leads into paying customers using a structured follow-up process.
- Extracting the maximum value from your customers by upselling, cross-selling and selling add-ons.
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. But here is a partial list:
- Reduce the cost of producing or buying your product or service.
- Implement systems for all tasks that allow the task to 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 unneeded employees, especially those that have no direct effect on the customer experience. Outsource them.
- Reduce marketing costs by eliminating those 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.
- Prevent fraud.
Until next time, thank you for your continued support and let’s make this year our most profitable year ever!