Friday, May 21, 2010

How To Avoid Revenue Ceilings, Pt. 1 -- Day 12/365

Real People.  Real Business.  Real Life.

Today's topic is another one that deserves 2 days... so let's dive straight in.

You business is probably built with a "revenue ceiling" in it.  That means that, by design, you can only make a certain amount of money, even in the best conditions...

need to engage in an ongoing process of business optimization so that you don’t fill to capacity and hit an ‘operational revenue ceiling’ that prevents you from reaching and exceeding the highest possible revenues.  Most entrepreneurs I encounter don’t understand that they have structured their business with a revenue ceiling built in.  The only way they experience significant growth is by chance luck or some outside factor turning things to their favor.

But --- if you understand that (1) you’ve always got some sort of revenue ceiling, and that (2) you can move the ceiling as you go --- the problem becomes null and void.  You can use it to your advantage to help you plan for each ‘next level’ of business you pursue.

 At a small size, and with most businesses, dealing with this is relatively simple on paper.  Don’t let the succinct nature of the following pointers fool you.  Getting this is critical if you want to generate serious wealth with your business.


1)  Start to develop and understanding of your business as a PROCESS, or SYSTEM.

2)  Map out the PROCESS that your business follows, from generating the lead, to creating that fully satisfied client who is pleased with the work you have done.
  • You can draft this with pen and paper.  Create a basic flow chart that maps out the core functions of your business, in proper sequence.  Some functions might be parallel, or might merge, or diverge.  Either way, create a sequential chart that shows how you go from potential client, to paying client, to satisfied client.
3) Make sure you absolutely understand what your CORE SUCCESS FUNCTIONS are.
  • Certain activities you engage in will be critical your business.  Others will be secondary, supplementary, or complimentary.  Typically (and I’d argue always) your true core success functions involve the key activities you engage in to generate business (market yourself) and deliver value to your client (provide the actual services being paid for).  Everything else is supplementary, secondary, and is typically an expense – time-wise, energy-wise, or financially.
  • Identify which activities are core success functions on the flow chart.
4) Make sure you truly understand what you COMPLIMENTARY ACTIVITIES are.
  • Again, as discussed above, these are necessary-but-secondary functions that allow you to continue engaging in your core success functions.  This can range from book keeping, to website maintenance, to scrubbing the toilet.
  • Identify which activities are complimentary activities on the flow chart.
5)      If necessary, re-create your flow chart so that the primary flow of activity is centered on your core success functions.
  • You might even want to simply list the complimentary activities to the side, and make the flow chart entirely about core success functions.
  • Getting absolute clarity about how you generate business and how you deliver value to clients is priceless.  Amazingly, many entrepreneurs remain foggy on this.
Look for more tomorrow on this extremely important topic.  I'll shed some more light on it.

To Your Enduring Success,


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