Business Success is a Lifestyle Change
Around the age of fifty-five, I began getting a yearly physical. Two years ago my doctor was not pleased when his scales ratted me out as weighing 368 pounds. I still think the nurse had her foot on the scale. Although I had good blood pressure and was pretty healthy, overall, I was borderline diabetic. The same disease that killed my father at the age of 59.
One year later, when I returned for this years checkup, my weight was 227. As you can imagine my doctor was much happier this time around. My blood tests all came back normal and I was given a clean bill of health. Leaving his office, I began thinking about how losing weight, and improving my health, was a lot like creating a healthier business.
The 80-20 Rule
If you’ve been in business more than ten seconds, you know about the 80-20 rule. Eighty percent of your business will come from 20% of your customers. Well, 80% of my obesity was coming from 20% of my nutritional decisions. In most of the businesses I’ve had the opportunity to analyze, I’ve found 80% of their problems usually come from 20% of the poor decisions they’ve made. When times are good and the money is flowing, and the phones ringing, your business can get a little fat. You might have a plumper payroll than needed, or you might be carrying a larger inventory than is needed.
However, when times are tough, as we are experiencing now, changes and sacrifices have to be made, or the future outlook of the business will not be good. I had some decisions to make. I could elect for gastric bypass surgery, but at my age, I dismissed that idea.
I could follow one of the many diet books that line the shelves of every bookstore. On the other hand, I could make a permanent lifestyle change today that would slowly take the weight off and keep it off — permanently. That way I could still enjoy the foods I liked, but in moderation. I found that eating two slices of pizza was better than eating two pizzas.
Trim the Fat
A business usually gets fat by spending too much time on non-profitable endeavors. I’m not going to tell you that each sale isn’t important or that each customer doesn’t deserve your best effort, but there is a way to do more with less.
Make a list of the five most profitable products or services your business provides. Eighty percent of your marketing efforts should be directed at these most profitable targets. Once you have identified your top five profit centers, your next task is to research and find the ideal customer who will want these products or services.
Contact past customers, talk to similar businesses in other states, and try to find the right advertising message that will attract these ideal customers. How do you find a needle in a haystack? You use a really big magnet. You need a magnetic message that will pull these folks out of their haystack and in your front door.
Look at your financials
In today’s computerized world, there is no excuse not to have some kind of accounting software to keep track of your business income and expenses. If you are a startup business with meager finances, you can use QuickBooks online starting at less then $15.00 a month.
It’s easier to cut waste 2% than to increase sales by 5%. If you can do both; so much the better. Are there ways to streamline your procedures? Can you accomplish the same tasks with fewer people? Can you reduce inventory that’s not selling? Become more aggressive in collecting accounts receivable.
Are there overlaps in responsibilities within the organization? Do you have the best possible person answering the phone? Does your advertising message have a “call to action?” Some trigger that will make customers pick up the phone or show up on your doorstep.
Some Final Thoughts
Your business didn’t get unhealthy overnight and improvements will take time. You will have to make some painful sacrifices. You may have to let some loyal employees go in order to save the business. There is no way to soften the blow of losing your job. Terms like fired, terminated, let go, downsizing, redirection are terms we’ve all heard if you’ve been in the work force for a number of years. Do not release quality employees unless it’s absolutely necessary. Good employees are too hard to come by.
But, the sooner you alter a bad business lifestyle, the sooner you will be on the road to a healthier, leaner, bottom line. It’s one day at a time. Minor improvements can make all the difference so start your business diet today.