Are You Making Money?

There are many not-for-profit businesses out there.  The problem is most don’t intend to be.

Here’s what it might look like: Employees lack focus.  Management tries to motivate them, but nobody knows how their specific tasks relate to profitability.

It’s time to trim the fat.  Get rid of the tasks that don’t make you money.  Add tasks that make you more money.  I know it sounds elementary, but not enough businesses do it.

These three rules will help you make business development decisions:

Rule #1: How does this reflect on my integrity? If integrity isn’t your guidepost, your enterprise will crumble as surely as Enron.  You should never lie and never do business with liars.  The purpose of a business relationship is not to get a big payday off of the person once but to have continued business that grows over time.

Rule #2: Does this make my business money? Everyone hates busywork.  Don’t let your day or your employees’ day get filled with it.  You need to make a task list each day and put those things on it that make you the most money. 

Rule #3: How can I never do this again? This is when business development comes into play.  Find something that makes your business money, delegate or outsource it, then move on.

Ironically, rule #2 and rule #3 have the same result.  They take tasks off your plate.  Either you train others to do it or you make sure nobody does it again.  It doesn’t matter how large or small your business is.

To be great at this you need to have a thorough understanding of your strategy and what adds value to your business.  Your strategy needs to be crystal clear to you and your team.  You need to know how your business adds value to your customers and suppliers.  You need to know how new entrants and substitutes impact you and your competition.

When your business plan helps you evaluate all those things, you know that your business will make tons of money.

Tags: Business Development, Improvement, Strategy

This entry was posted on March 10, 2010 at 5:22 pm and is filed under Strategy, Three Rules. You can follow any responses to this entry through the RSS 2.0 feed.