Monday, May 24, 2010

How To Avoid Revenue Ceilings, Pt. 3 -- Day 14/365

Real People.  Real Business.  Real Life.

Today we wrap up our brief primer on business optimization.  And again, we're focusing specifically on optimization as is relates to generating revenue in your small business.


HERE’S WHERE THE RUBBER MEETS THE ROAD ON SERIOUS GROWTH.  Once you understand your core success functions and high value tasks, you must begin take your support/complimentary activities (and the high value tasks you are not good at) and choose to do the following:
  • Hire someone to do it for you.
  • Outsource the lower value project, or the high value project that you are not proficient in.
  • If possible, delegate the task down to someone working with or for you.
  • Eliminate the task altogether.  Sometimes we do things that just don’t need to be done at all.
Reaching Revenue Ceilings
  • If you do all the previous steps correctly, you will eventually reach your first revenue ceiling.  That simply means that -i for your current business model and operational capacity -- you just cannot take on more business or facilitate increased cash flow.
  • Assuming:  you are the only true “value generator” in your firm, you have maxed out your workday with $100/hour tasks, and you average the normal 2000 work hours/year, your first revenue ceiling is at $200,000/year.
  • As you approach and reach that ceiling, it will be time to begin the process of increasing your ability to generate value.  You’ll need to ask yourself questions like the following:
How can I generate $200/hour worth of value?
How can my partners/employees/ect generate more value?

Finally --- raising your firm’s capacity to acquire and handle more business, and generate more value for more clients, often boils down to improvement in one of 5 areas:
  • Creating and implementing an improved strategy to guide your business.
  • Improving the marketing you do.
  • Improving the way you manage your firm.
  • Innovating new ways of delivering value.
  • Improving the individual performance of yourself and those in your firm.
Very simply, you can return to your business process flow chart, focus on your core success functions, and develop ways to improve upon them in terms of strategy, marketing, management, innovation, and individual performance.


Many entrepreneurs don’t view their business as a process.  They never understand it as a simple series of sequential, value-generating events.  They don’t see their business as a system that can be measured and monitored… and thus improved.  This is a very big reason why so many small businesses remain stuck where they are at.

Let me close this series of blog posts by condensing the optimization process down to its most crucial steps:
  1. Examine and understand your business as a process.
  2. Map out the process on paper, from generating a lead, to creating a satisfied customer/client.
  3. Make your core success functions the focal point of the bulk of your activities.
  4. Gradually position yourself so that you are engaged only in the highest value tasks which you perform the best at.
  5. Systematically and continually improve specific components/steps of your ‘business process’.
And let this all be governed by:

.... a mindset of continual improvement.

To Your Enduring Success,


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