SBM #53 – Focus
Many entrepreneurs’ struggles can be traced to their inability to bring focus to their business. It is said that if you try to be great at everything, you'll end up being good at nothing. I like to use the example of sunlight to explain the power of focus.
The Power of Focus
Most day our world is full of sunlight and even on the hottest of days there's little risk of it setting anything on fire. But take that same sunlight and let it pass through a magnifying glass held at just the right angle and within seconds you can create a flame. Then, if properly stoked, it can become a raging inferno. That's the power of focus and by applying the principles of focus to your business can take a mediocre enterprise and turn it into one that is highly profitable and sustainable.
Not That Popular
Bringing focus is easier than most realize and can applied to many areas of your business but none are more important than sales and marketing. The first step is to identify your most profitable products and services and then rank them. You'll most likely discover that upwards of 80% of your revenue is coming from approximately 20% of your services or products. This is key. Far too often we waste time and energy on our slow moving products. One of the reasons we do this is that they offer higher margins but also because we hate admitting we made a mistake. However, in many instances these more profitable products are just not that popular.
Now, do the same with your customers. You need to determine, their purchase frequency and order size. Chances are that you’ll find an interesting overlap of your most profitable products and type of customers.
Now here comes the hard part. Ideally you should look to lose or reduce your activity opposite these low volume or unprofitable products. Next, stop chasing those non-profitable customers and focus all your attention on those products, services and customers that are making you money.
For example,