Small Business Training 101: Where Does Revenue Come From?
You have your own small business. I want to see you succeed. Let me start with the most fundamental question of all: What are your sources of revenue?
I help entrepreneurs. Many have great ideas. Many spend a lot of time networking. But at the end of the day, whether they succeed or fail depends on revenue generation.
Here are three things that every entrepreneur needs to address with respect to revenue: (1) Define specifically what you sell and the price; (2) Determine specifically the time you will spend in revenue generation; and (3) Determine specifically anything else required to support revenue generation. Let me explain.
Defining What You Sell: Focus and Communication.
There are two parts to defining what you sell: defining it for yourself and communicating it to customers.
You must make sales. If you are a consultant, and you charge $100 per hour for your services, then you must spend as many hours as possible providing services. In contrast, if you sell a product (like websites for $2,000 each), then everything you do needs to focus on selling your product. Put your focus on what you sell, and you will make more sales.
Your prospective customers need to know what you sell and how to get it. How can anyone buy from you if they don’t know what you sell or the price? Create a price sheet. List your products and services on your website. Create a channel that allows people to purchase from you.
Clearly defining what you sell, both for yourself and for others, is the most important first step toward actually making a sale.
Time Commitments: Making Sales Happen.
Many business owners spend a lot of time supporting their business. They pay the rent. They keep up with social media. They make plans. They set goals. They meet people and network. They do a lot of things that are not specifically generating revenue.
It is so easy to go to work, get busy, get a lot of things done, but fail to generate any revenue. That same thing can happen hour after hour and day after day. It might be caused by procrastination. It might be the result of fear.
But if you have defined what you sell, then you should know what specific steps you must take to make a sale. You must have a prospect. You must contact that prospect. You must complete the process of converting that prospect to a customer. That is the activity of selling.
Any small business owner that wants to be successful need to make a commitment to spend a certain amount of time each day doing only the activity of selling. If you spend a certain amount of time every day doing only the activity of selling, you will have sales.
Over time, you will be able to track your conversion rates. You will be able to use your records to refine your sales activity and improve your conversion rates. You can grow and leverage your business and become very successful.
Success begins with the commitment to engage in the activity of selling for a defined period of time every day. It is non-negotiable, if you want to sell.
Supporting Sales: Everything Else.
When you own a business, you have a lot of responsibilities. Once you make a sale, someone has to do the job of fulfillment, recording keeping, accounting, human resource management, and anything else required of your company. Non-revenue generating activities are important, but they don’t directly produce revenue.
Can you do a better job? Can you get it done faster? Can you get it done cheaper? Can you hire someone else to do it?
When it comes to non-revenue generating activities, think of them in terms of how they can contribute to sales. How fast you deliver a product can affect customer satisfaction. Better communication can increase customer loyalty. Hiring someone else to do payroll for your company can save time, which you can then spend on increasing sales.
When you fulfill your responsibilities with the next sale in mind, you may find that everything you do indirectly affects your sales.
Small Business Training 101 is about increasing revenue. Start with the simple concepts outlined above. Take the time to focus on revenue generation.
I see no reason for 80% of small businesses to fail. I believe that statistic can be changed for any small business owner willing to learn from my experience. If you need help, let me know.
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