In your business, when do you actually make money?
Is it …
- When you’re coming up with an idea?
- When you’re delivering your service or product?
- When you’re coaching an employee?
- When you’re writing an email?
- When you’re doing a performance review plan?
- When you’re in a meeting?
- When you’re working on your budget?
- When you’re designing a campaign?
Honestly, in your business, when do you actually make money?
To help answer this question, let me share with you an experience I had last week. I was at a conference on thought leadership when the main speaker, Adam Urbanski, made the following comment.
The simplicity and clarity of that statement (combined with its truthfulness) was a powerful slap in the face. Like most service providers it’s so easy to slip into thinking that what makes us money is the service we provide.
In my case, that’s content. In your case it could be writing a contract. Or showing someone a piece of property. Or creating a Sunday service. Or designing a new product. Or putting together a new portfolio. Or updating a client’s balance sheet.
When You Actually Make Money
But the reality is that that is not when we make money. You and I make money when we actually sell our service or engagement or product. The rest is merely fulfillment. Or administration. Or …
While recruiting talent, casting vision, creating systems, developing strategy, managing money, delivering great customer service, inspiring high morale, ensuring alignment, etc. are all good and vital areas of executive attention—the reality is that we’re only really making money when we’re actually engaged in marketing and sales.
So What’s the Problem?
The problem is your schedule and mine. Take a look at your schedule from the last week. How much time did you devote to marketing and sales? Then ask, “How much time did I spend doing administrative work?” “How much time did I spend delivering my service/product?” Etc.
All of a sudden, I’m hoping, lights started going off! If you’re like the leader of most small businesses, chances are you’ll notice that the vast majority of your time is sucked up by all kinds of activities that don’t have anything to do with actually selling what you offer—and that’s a huge problem!
Note: This is not to say that you have to be the main sales person (if you have other sales associates working for you). Nor is it to say you should be the main marketing person (if you have other people engaged in marketing your business). But what it does mean is that a significant amount of your time should be focused on marketing and sales—regardless of the size of your business or practice.
A Simple Solution
So, here’s what I’d recommend. The first step is to get crystal clear on what makes you money. For example, a chiropractor makes money when she sells a treatment plan, not when she’s adjusting every week. An attorney makes money when a prospect signs an engagement letter, not when he’s drafting a contract. A business coach makes money when she signs a client, not when she’s coaching the client. An athletic facility makes money when a prospect signs a monthly contract, not when someone uses their facility.
Once you’re crystal clear on what the activity is that makes you money, pick a percentage of time that you think you should be involved in that activity (or those activities that can lead up to a sale—for example, taking a prospect out to dinner or writing an email to sell a product or contacting a strategic partner to do a joint venture) at your current stage of development.
What number did you come up with? 20%? 30%? 40%? 50%? What percent of your time should you be engaged in actually marketing and selling what you do (or your business does)?
Where the Rubber Meets the Road
Once you have that number, translate it into hours. For example, if you picked 30% and you work 60 hours per week, that would be 18 hours per week. Note: If you need to adjust your percentage, do so. But come up with a concrete number of hours.
At this point, I’m guessing another light just went on. Based on all the work I’ve done with business owners, CEOs, entrepreneurs, managing partners, executive directors and senior pastors over the years, very few of them are even close on those two numbers (their ideal number and their actual number), and that’s a problem (but that’s for another post).
Regardless, the next step is to take that raw number of hours (whether it’s 8 or 12 or 16 or 24 or …) and block those hours in your calendar. Then once you block them in, keep them. Don’t let administrivia or other people get in the way of you doing what actually makes you money.
Imagine what could happen in your business if you focused more of your time on what actually makes your business money? I know it may seem simplistic, but life and business so easily crowd and fill every business leader’s calendar.
So just imagine with me for a moment what could happen to your business if you actually spent more time focused on what actually made you money? How much more money do you think your business would make? Or how much faster could your business grow? Sometimes the most powerful ideas are the simplest!
If you simply spend more time focused on those activities that actually make you money vs. those activities that you enjoy doing or that demand attention, surprise, surprise … you just might make more money and grow your business faster!
To your accelerated success!
P.S. If you’re feeling overwhelmed with too much to do—and you’re doing activities that someone else could be doing for less per hour than you make—then you may want to check out my recommended solution for this problem, Delegation Mastery: How to Stop Dumping and Start Delegating Like a Pro