ElevateYourSmallBusiness.com

When things are not running as smooth as you'd like and profits are not growing as much or as fast as you'd want them to, it may be time for a time-out, regroup and go back to basics.

With more and more competition coming from all the four winds, with more technology being available today than ever before, with boat-loads of information being bombarded at us enough to make the most sane person crazy, it's easy to get lost and get confused about what really matters in your business and it's easy to loose profitability, balance and effectiveness.

We've all heard about The Pareto Principle, a.k.a. the 80/20 Principle. As you know, the principle can be applied to many situations, but in our context, we'll focus on the idea that 80% percent of the positive results in your business are driven by 20% of your activities. In other words, approximately 80% of your profits are attracted by approximately 20% of your daily business activities.

If that is true, then the best things to focus on are those in the 20% category. So, the first thing to do is to thoroughly analyze your business systems to determine exactly what is bringing you the most profits.

One way to carry out such analysis is to measure everything. If it can't be measured it can't be managed. That's where the concept of "metrics" comes in.

Here's just a sample list of what you must measure in your business in order to discover what is working and what is not:

Amount of money and effort invested in each of your marketing campaigns
Number of leads coming in from each of your campaigns
Your conversion rates - How many of your leads are actually becoming paying customers, clients or members
Your follow up programs
The LTV or "Life Time Value" of each of your customers - How much money each of your customers invest in your products or services in a 5 or 10 year period or longer
Your operation expenses - including your business building mortgage, lease or rent; your employees; your office equipment and supplies, etc

Of course, there's more. Most of us know this already, but it does take some focused time and effort in setting up the systems to track all those numbers, so... sometimes we just don't. But that can set you up for very unpleasant surprises.

The time and effort it takes to create such tracking systems are worth the investment 1,000 times over! If you've gotten that taken care of, good for you. If not, it's not too late. Start simple and move swiftly through each component.

Once you know for sure what is bringing in the profits and what is actually making you loose profits, it's time to get rid of all the waste and focus on the productive activities and programs.

Every sport, every program, every profession, and every business has its fundamentals. Find 5 to 12 crucial activities that bring in that 80% of the results.

Let's take basketball, for example. The fundamentals there are passing, blocking, shooting and rebounding. That's where the focus should be both in practice and in an actual game. It's easy to get side-tracked and get into activities that don't produce a high return on investment.

In business, the fundamentals are:

a) Lead generation/attraction

b) Lead conversion

c) Product/service fulfillment

d) Customer service

e) Management

f) Operations

That's it! So you define the fundamentals of each of those. Create your system manuals and training program and enforce them. After that you evaluate your results through the metrics systems you set in place and you're there!

Two great books that we recommend that will help you create a well-oiled, money-making machine are: Michael Gerber's "The E-Myth Revisited" and Chet Holmes' "The Ultimate Sales Machine." If you've read them, I'm sure you agree with us that they're two of the best books written on the subject. If you haven't read them, we highly recommend that you invest less than $30 dollars (for both... including shipping and handling) and read them as soon as you can. Both resources are listed on page 64 of our eBook, "15 Proven Principles for Success in Business" if you want to learn more about them.

Click here to sign up and download your free copy, if you haven't already.

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