'Three P's' that May be Holding Back Your Business
Business can be tough, so it's important that we limit the number of mistakes that we make as business owners and executives.
Here are three common mistakes that we make, and they all begin with the letter, 'P.'
And relating to Pricing is Profit (or lack of). But profit starts with accurate pricing.
Many business owners are not on top of their Cost of Goods Sold or Overhead costs and therefore do not have a firm grasp of what it actually costs their business to produce an item or offer a service. And if we don't know what our costs are, it's difficult to determine what profit we will earn if we sell an item for $10.00. So we are left to guess. We hope we will make a dollar if we sell an item for ten dollars but really we are hoping or guessing at best.
We need to know exactly what our costs are before we can determine pricing and profit levels. Spend some time working through your financials and job costing reports so you can understand your costs, so you can accurately determine your pricing.
This is a tough one for business owners because we wear so many different hats that its easy to spend our time on low priority items, rather than tasks that truly impact the success of our business.
If you're strengths is in operations, it makes sense to apply yourself to the operations of your business rather than doing something you may not be great at like social media. Sure, you can do basic social media, but you find it time consuming. Whereas operations comes naturally to you and you can immediately see the benefit to your business when you are fully engaged in the operations side of your business, rather than spending time trying to create a sales funnel or marketing content. Likely you would be better off utilizing the strengths of an employee who may be social media savvy, or hire it out to a sub-contractor, rather than spend your valuable time and mental energy on something that isn't one of your top three talents.
Next to cash, people is the greatest resource that a business has. Yet many of us do not give the people that staff our businesses enough of our attention and time. This includes taking short cuts on our hiring processes, providing limited training opportunities or failing to take the time to be a mentor.
We often get complacent with the staff that we have and rather than trying to better our teams by always trying to recruit the best talent. We need to surround ourselves with the highest quality of people that we can find and afford. It's tough to reach your business goals if your staff, or some of your staff is simply not up to the challenge.
Make an honest evaluation of your staff today and identify positions that need to be improved and set out with a hiring plan to upgrade your team.
This month, spend some time looking at your Pricing, your Priorities and your People and work to improve these three key areas.