As a young entrepreneur currently running two businesses as well as several blogs, I often find myself wrapped up in and involved with tasks that may or may not directly contribute to my companies’ bottom lines; checking whether payroll is running on time, ensuring that my staff is properly trained and up to date on current laws and regulations, recruiting new employees to help my companies grow, marketing, etc (you know the routine). What I started noticing about my daily activities were that while a few of these activities may contribute to my organizations’ overall growth and bottom lines, NONE of these activities contributed to my companies’ top lines, i.e. sales and revenues! How can I, the future owner of the Los Angeles Clippers, possibly allow this to happen, if even for a moment? While it may seem obvious, it is very easy for an entrepreneur to temporarily lose track of his or her top line (sales) growth and become distracted with daily activities of the business, some of which are reasonable activities that may even contribute to your organization’s growth. In fact, what makes this entrepreneur’s dilemma even more confusing is that many of these activities which do not contribute to your top line are still activities that may benefit your business; they just don’t benefit your immediate revenues and therefore, may hamper your growth.
The solution to this dilemma is for you, the leader of your organization, the head of your company, the CEO and entrepreneur visionary, to forget about everything else and start focusing strictly on activities that will boost sales. Of course the other activities are critical and should not be ignored, but you need your staff trained on how to handle those functions and follow the systems that you have implemented for those functions. If you don’t know how to build systems for your business I suggest you learn from McDonald’s, or read one of my all time favorite books “The E-Myth”. It is not only irresponsible for the leader of an organization to ignore sales, it is also extremely costly.
Let’s take a look at this issue by examining an innovative product or service that your company has been working on. If too much money is being spent on perfecting the product or service and working out every last detail before a single sale is ever made, then you truly have no concrete proof that a market exists for your product or service. You can save so much time, effort and cash by making a decent product or service and then selling it immediately, while using any feedback the marketplace gives you to either: continue selling the product/service, improving the product/service, or killing the product/service. Once the market gives you an answer, you need to act on it. As you start earning revenues from this product, improve upon it, start marketing like hell, and then build a system around the product. This is the point where you will begin to delegate these responsibilities to other people in your organization, and you will move on to building your next product while still maintaining a focus on sales. Once you’ve reached this point, you can double down on marketing costs since you already know tht the product/service will sell, and now you can sell more of it. Use the revenues from this product to fuel future innovations, and stop wasting your time and money on activities that do not contribute to further sales.
This may all seem obvious at first, but it is very easy to get distracted with perfecting the product or training your employees on things they shouldn’t be trained on before you know for a fact that your product will sell in the marketplace. As the leader of your organization it is critical that you only spend money when you have good reason to believe that your product will succeed. Everything else is a distraction and should be ignored (at least by you).
I would encourage you to connect with me on my business and entrepreneurship blog (http://www.DanSfera.com) at some point; I interview interesting entrepreneurs from around the world and would love to interview you as well as I work on buying the L.A. Clippers!