The Wrong Focus
So you've got your business running, you're an entrepreneur! Yet is your business really profiting like it should? All too often it isn't. Why? Is it a bad industry? Are you not good enough? No. The issue is often that people don't focus on what actually makes them money.
Here's how much time a typical small business owner will end up spending on the three main types of activities of a business:
- : 10%
- : 65%
- : 25%
So what's wrong with this picture? The majority of the time is spent on operations and administrative tasks. Now, don't get me wrong, these things do need to be done, but they are not what makes your business money.
Where does the money come from then? Selling your products/services and then delivering them. In other words, sales and marketing followed by production. These are the two activities directly related to your business' profits. Meaning that is where you need to be spending most of your time!
Now let's take a look at what a successful business owner does:
- : 65%
- : 10%
- : 25%
Notice how the time spent on Operations and Sales/Marketing is reversed? This means the successful owners spend about 90% of their time on the 2 activities directly related to their profits.
So how about sales and marketing? How does a successful business handle that? Well, that comes in a three-step cycle.
- Open: Here you're building up a relationship with your future clients
- Close: Get the sale. This is where many fail. They build up many great relationships but don't follow through with closing the sale. You can't make money if you don't sell, and you can't really help those future clients if you don't get them to buy your services and products. That's a lose-lose scenario. Remember that, by closing the sale, you're helping your client get a valuable product or service. Of course, if it's not valuable to the client, I wouldn't offer it to them, ethics is also essential in that regards.
- Deliver: Now that you've got the sale, it's time to deliver what your client paid for, and meet or, better yet, exceed your client's expectations.
By focussing your precious time on where the money is and following these three steps, you set yourself up for success.