Why Knowing Your Position Can Increase Your Profits
I bet you have answered this question at least once in the last week if you have done any networking, “What do you do?” Our answers vary depending on what we feel we do. I’ve heard responses like:
- I own a business
- I’m a massage therapist
- I work with speakers and coaches
- I do marketing
- I’m a WordPress expert
And so on… There is a better way to answer this to ensure you get interest from your target client, but that is not what we are talking about today. What I want you to notice is that we often mention what our specialty is. What we do as the ‘technician’ of our business, as Michael E. Gerber would put it. This is our mindset as to our role in our business and it is the reason we can fail to grow our business.
When you want to grow your business there is one question you need to ask yourself to start the process.
Q. What is my role in this bigger business?
To answer this question you have to think big. Think about the business you want to have. How big is it? How many employees? What income and profit does it make? How big is your location? How much inventory do you carry?
Once you have this number (pick one to focus on) multiply it by 10. If you were going to be a $100,000 ($100k) a year life coach, then your new number for this exercise will be $1,000,000 ($1M). Why do I want to you look at this huge number? Because this is where you will find your ultimate role and it will allow you to more easily manage a business of $100k or surpass it if you choose to.
So now ask yourself these questions about your $1M business.
- If I had a $1M business how many clients would I need to have (or how many products would I need to sell)?
- Can I manage all these clients myself?
- If the answer is ‘no’ then how many people would you need to hire to manage that many clients?
- Would I be able to create that much business by myself to get all those clients?
- If the answer is ‘no’ then what marketing or sales strategies would you need to have in place?
- Will I enjoy running the business and never seeing the clients?
- If the answer is ‘no’ then whom will you hire to be your CEO or President to manage the ‘big picture’ of your business?
- Can I continue to oversee the administration, reception, and financials of my business?
- If ‘no’ then identify how many people would be required to manage those functions in your large business.
As you go down these questions (and you may think of many others) you help eliminate those roles that you are currently doing but would not be able to handle when your company is really big. What you are left with is the one or two roles that you really want to do and should be doing in your business.
How does this increase your profits? As you attempt to grow your business the #1 issue people run in to is that they cannot handle all the work. They are overwhelmed. This will stop a business dead in its ‘growth’ tracks. When you know what roles in your company you will need to offload as the business gets bigger you can start by outsourcing small pieces of those responsibilities. Start with offloaded an hour and continue to offload responsibilities that you cannot manage until you can hire someone into your company. No one gets hired until their role is making you money – meaning you save more time to make the money or they actually are bringing in dollars.
You cannot run a business and do all the work in a large company, so don’t expect to grow your business and continue to manage everything. Know your ultimate role and grow your business until you get to play in that role exclusively and others are looking after the rest.
Want more help with this, watch for my next CEO Hat event coming in November.
Leave a Reply