John Reese announced his plan for income.com He openly discussed his life of opposite extremes. On one side he has all or most of the material possessions that have been his life’s dream. On the other side, he clearly struggles to enjoy life and details the stress of determining which projects and opportunities should receive his attention each morning.
Ken McArthur issues an email to his list discussing this month’s project which is thinking. Ken outlines the issue he and nearly every on line guru is thinking about. What is the next step?
I have operated at the executive level of companies with revenues ranging from $3 million to $1.6 billion. One company I purchased with a partner had annual revenues of $50 million. One of my consulting clients started with one store and today has sales exceeding $12 billion dollars. Currently I spend most of my professional time continuing to work with companies of all sizes helping them achieve their businsess performance potential. These experiences lead to a clear understanding of what is required to take any business to a new and better level of performance.
Before that outline I have to warn you that what you are about to read is considered by most to be frightening. It is frightening not because of what is disclosed but what is required. Here it is!
1. Define what business you are in. I have seen examples recently of well known people deciding to change their business focus. There is nothing wrong with that if there is a clear definition of the business model along with a transition plan from the current model to the new one. Part of that plan must include a backup plan of keeping the engine running in the vehicle that funds the business now until the new engine starts. The new plan should start like the old one didn’t which is with a clear definition of revenue and profit goals.
2. Once defined, there are four (4) A Priority Functional Areas that need to be addressed whether you do it yourself, outsource them or hire staff. In order of importance:
A. Closed Loop Management Information System. This is a process of accounting for the actual performance vs. plan of all key components of your business. Notice this is listed first. Also notice in order for this to work, there needs to be a measurable plan in place at the right level of detail.
B. Business Development or The Engine. This starts with a plan that defines what it is you are marketing, to whom and how you are going to reach them. It also defines the resources required to implement that plan and track variances from plan.
C. Infrastructure Leadership and Accountability. At the infrastructure level of every successful business you will find highly skilled and dedicated people who know what they are expected to do and are rewarded consistently for doing it. They are part of the team and are not independent contractors.
D. An Absolute Fixation on Achieving Revenue and Profit Targets and Optimizing Liquidity (cash).
Currently it takes an average of six months working with a well established company several days every week to get them back on track by teaching them how to achieve the above four foundation pillars. Even when a company goes through that process, 80% of them fail to continue what they learned within one year. The remaining 20% go on to achieve results that place them in the top 10% of their industry. Why do 80% fail? Alot of what is involved in operating a world class business involves following a disciplined management process which is not an attribute ingrained in most entrepreneurs.
Can an entrepreneurial based business that has achieved a notable measure of success go to the next level?
It all depends on their willingness and commitment to implementing a disciplined approach to running their business. Look at Yahoo, Ebay, Google and many other successful enterprises. These are companies starting with an idea. At some point behind the curtain you will find an executive and executive team who rationalized the business model and maximized the value of that model.
Of all the on line experts I pay attention to, there is only one other person who consistently demonstrates the skills needed to guide those wanting to go to the next level. I define the next level as a currently successful business with revenues of at least $5 million and net profit before tax of 10%. (If your net before tax is less than 10% then you need another consulting toolbox – the “fix it toolkit”).
Wal-Mart is the largest retailer in the world selling everything that everyone else sells. Wal-Mart, Target, and others make it easy and economical for alot of people to buy what they want. Studying the information products, marketing tools and more that are being offered during the tail end of 2006 you find a lot of similarities. It will be interesting to see in the next couple of years what gurus successfully re-engineer their business model to deliver what the entrepreneurial and small business communities really need to achieve their respective business and personal goals. Ones that do, will be at the next level and will have more fun doing it.
Steve Pohlit has more than 20 years experience running very large and medium sized companies. Steve now consults personally with clients to design and implement processes that will deliver improved business performance for the long term. Most projects are self-funding within 90 days. The client then experiences a very high return on investment. Learn more about the process of Increasing Profits by 30% or More In 90 Days or Less by visiting http://www.stevepohlit.com or you can call 727-587-7871 and speak with Steve directly.