What happens when you apply the 80:20 rule to the activities required to be completed for any business to operate?
A Positive, Low Stress Working Environment
Continual Progress At A Rate That Far Outpaces Your Competition
How do you achieve these goals? Well just take a look at how most companies are run and don’t do what they do. People in most companies spend the majority of their time on activities that have little or no impact on building revenue and profits. Let’s review the components of how to solve this.
First there are only five (5) areas of business that need your attention. Hold out your hand and look at your fingers and thumb – 5. Now follow with me on this because I am not in a room with you to reinforce the point. Hold out your hand and assign each of the (5) pillars as follows:
1.Sales – thumb
2.Gross Margin – index finger
3.Expenses – your “flip em” finger
4.Working Capital – next finger
5.Employees – pinky
80% of your time as an owner or CEO should be spent on these 5 pillars and 80% of the 80% should be spent on Sales and Gross Margin – the first two. When you spend the majority of your time on marketing the right balance of products and services that bring you optimum sales volume and gross margin, normally there are no issues recruiting and training the best people, there are minimal issues with managing liquidity and if any area of expense begins to be out of balance, it doesn’t hurt much while you are bringing it back in line.
If you are considering making some adjustments in how you allocate your time, you are invited to review my FREE course “How To Increase Profits By 30% or More In 90 Days or Less” which can be found at www.stevepohlit.com This is a sequential step-by-step process based on the exact programs I use when I help companies implement a management system on site(not software, simply very clear methodology for running the company).
Nearly every article published at www.stevereports.com expanded upon the management of components of the five pillars. In most cases, the information contains practical advice that you can implement beginning today. I have found that if the concepts are not actionable quickly and do not yield positive results quickly, people lose interest. It is no different than an exercise program. If the exercise is too rigorous, too demanding or takes too much time, it will not be sustained over time. Running a company is no different. The process must result in continual positive feedback as to progress toward achieving measurable goals.
Author: Steve Pohlit is a Business Consultant and publishes articles focused on helping companies increase revenue and profit.