We’ve talked about this before but I’m bringing it back up, because the uptake on this concept is low. So I’m just laying it out and eliminating the usual banter. Business is simple. It’s money in minus money out. Don’t get confused by the fit and finish of the business. If it cash flows in God mode then it’s good. Often we get enamored with winning logos or other distractions that make us feel important or successful. If that new logo cash flows and produces earnings its good. Otherwise it’s not.

I can hear you saying something like “All my customers are good. They all pay.” But let me tell you the truth which Coopers and Kaplan unearthed and docuemented in an article WAY back in 1991. 20% of your customers are producing 225% of your profit. “How can this be?”, you ask. “I know at the end of the year I only have 100% of my profit. Cuz… math.” But I am telling you that some of your customers are very profitable and some eat the profit of the others bringing you back down to 100%.

If you can’t tell me how you fixed this, this principle is operating in your business. Call me now and we’ll have it fixed before year-end. …provided your contracts give you the freedom to do this.

Case in point: a small client, $15M in revenue going into the great recession, reduced their revenue by 50%. Some involuntarily, some deliberately fired. As a result, the company made MORE profit, about 2X, on $7.5M in revenue. I’m not kidding. These are actual numbers.

‘nuff said.

Call To Action

Look at your business’ earnings by categories:

Where are you in the New Business Development Process?

1. If you don’t know call us. We’ll determine it.

2. If you do know, ask yourself what’s next. (We can help here too).

I hope you found something to apply to your business in this MBR. Let me know either way.

See us here on LinkedIn.