8 Business Variables That Can Change Your Bottom Line
You have the power to change the profits of your business today by taking a good look at these 8 variables and key business metrics.
As an entrepreneur or business person, it is your job to stay focused and always continue to improve your strategic business plan.
Are you not sure where to start?
Keep reading because I’ve outlined all of it for you . . .
The basic strategic variables for consideration as you make a plan for the future are products, services, customers, markets, finances, people, technology, and production capability.
These are areas of your business that you may continue as before or change, depending on your strategic goals.
Here are the 8 variables to keep an eye on in your strategic planning process.
1) Products and Services
What exactly are the products and services that you are planning to offer? What do they do to change or improve the lives or work of your customers? What is it about them that makes them clearly superior and the best choice for the customers that you are going after?
How much money do you have, and how much money will you need to achieve and sustain financial profitability?
Over 30% of new businesses fail because they do not watch their finances and their key business metrics.
Business success is the result of changing one of these metrics.
Do you want to learn how to change them for yourself?
Fortunately, I have outlined the 7 most important business metrics for you and you can learn to use them to improve your business: Click here to learn what they are.
Who is your ideal customer, your perfect customer? What are the demographics of your ideal customer? What is this customer’s age, education, income, occupation, and level of family formation? What are your customers’ psychographics? What are their goals, ambitions, desires, and aspirations? What are their fears, misgivings, or suspicions that might cause them to hesitate from buying your product or service?
What do they use your product or service for? How do they use it? How does it change or improve their lives in some way?
Here are 8 steps to identifying your ideal customer:
Reverse Engineer Your Product
In the past you chose your product, then sought out customers. In many cases today however, companies are identifying the customer and the customer’s exact needs and then retrofitting or reverse engineering product and service development based on what the customer says he or she wants. Companies are moving from “product development” and not even creating the product until the customer has agreed to buy it at a particular price.
Your customers who buy your products will affect everything about your business, including your product sales. This is the most important metric to keep in mind.
What markets are you going to enter? How are you going to penetrate these markets? Are you going after geographic markets, horizontal markets, or vertical markets? Who are your competitors in these markets? How do you need to advertise, promote, sell and otherwise penetrate these markets?
Who are the key people you will need in terms of skills, abilities, and proven competence? Where and how will you get and keep these people?
Here’s a video on motivating and inspiring your employees.
What sort of technology will you require to build and operate your business? Is your current technology sufficient and satisfactory in light of the rapid changes in technology that you competitors are adapting?
7) Production Capability
Finally, what is your production capability? How much can you produce, deliver, sell, and service in a competent fashion? What do your products or services costs to produce, sell, deliver, install, and service? Keep an eye on your cost of goods sold.
Are you unsure about what cost of goods sold is?
8) Set Clear Goals
A few years ago Fortune magazine reported on a study that was done to determine why so many CEOs were being let go from Fortune 500 companies. The most important reason cited was “failure to execute.” The CEOs had been placed in their positions with clear, specific performance expectations for their companies.
Successfully leading your company’s strategy depends on your having laser-like focus on your goals and key business metrics.
What is your main objective for your business or for your position? What are you trying to do? How are you trying to do it? Could there be a better way? Are your goals and objectives realistic based on the current situation? What are your assumptions? What if your assumptions are wrong? What would you do then?
If you want to improve your business immediately the first thing you should look at are your key business metrics. After you analyze them you can find out exactly how to proceed next