BUSINESS KILLING MISTAKES #1: YOUR COMPANY IS NOT DESIGNED TO MAXIMIZE SALES, GROWTH, AND PROFITS

 

One of the biggest mistakes leaders make is they simply believe the current design strategy of their business will produce the greatest number of new clients, greater revenues, or the biggest profits. 

Too bad they are so wrong. 

OVERVIEW OF MISTAKE AND WHAT THE READER WILL GET

Quick, what is the design philosophy and objective of your business? 

If your business is like every business in the world the design started with answering this question, “How do we become the best at delivering or supporting a product or service – our offering?  An offering is how every business starts. But our clients, who are making millions to tens of millions, more with their products and services prove that is not how to make the most sales, revenue, and profits possible once your firm is up and running. 

In this article, I will share with you the “core design strategy” for 99.9% of all businesses, and why that design strategy is what’s keeping a business from making all the money it could and should. Make sure to read until the end to learn exactly what steps you and your team must do differently if you want embarrassingly profitable growth without working any harder or spending more money doing it.  

DEFINE MISTAKE – What is the “business design objective” mistake? 

Business design is simply how you put the working parts together for your business. As I explain in Chapter 3 – Business Modeling in the book, Entrepreneur To Millionaire, it is building, implementing, and integrating the right pieces for both client and non-client facing functions. The classic four-part design which works directly with the prospect or customer is marketing, sales, delivery, and support.  Today you can “outsource” any of those functions, but that strategy can limit your profitability. 

Okay, what is the design objective flaw you ask?  Basic business design starts with delivery or operations. The focus is making sure the customer gets the product or experiences the service quickly, effectively and for a reasonable price.  Then the vendor expects the client to pay for that offering.  The objective is to achieve a “fair exchange”.  

Next, leaders add some marketing and sales to bring in more customers to generate more “exchanges” with the firm to make more money.  Doesn’t sound too bad so far, right? 

Although there is flawed thinking in that strategy as you learned in my book about “more from more” when you should be following “more from less”, there is a bigger mistake.  Leaders, owners, and entrepreneurs continue to spend fortunes of time and resources making their delivery, their operations, their service and support better and better.  They measure, report, and live in the world of the “pursuit of excellence”.  

I was in a meeting yesterday hearing about a business that after numerous hurdles and swat team meetings they were able to reduce one of the parts in their product by 40 cents.  Leadership and the teams celebrated like they had cured COVID. 

Reducing the price of a part or service is something to be excited about. But wasting that new profit gain on flawed marketing or misused sales costs is where most organizations don’t even notice.  Burning money in marketing and sales is just “the cost of doing business”, right? Wrong. 

And that is the great “business design objective mistake”.  Instead of following an amateurish design of exchanging products and services for dollars, you must implement a more sophisticated design.  You must put in place a design strategy that transforms from “exchange to leverage.”

Leverage means you are using a “holistic approach” – every part of your company – to make money without spending money. Your objective must be to attract better clients and convert those clients faster or without spending sales dollars.

If you lower your prices, cut your costs, or use “lean approaches” to optimize operations that can only take you so far.  There are ceilings to efficiency. Oppositely there are no ceilings to no-cost sales and profitable growth.  However, you must design your company for the latter. 

WHY DO LEADERS MAKE THIS MAJOR DESIGN MISTAKE? 

Why do leaders make the mistake of over-focusing on what the company does or what they offer? 

Because they are following the now-classic mistake of the Field of Dreams cliché: “If we offer this, they will come.” In other words, following the belief that if we can provide to the marketplace the best products, services, or wow customer experience, we will dominate and own the market. Ha! 

We have many, many clients who don’t offer the greatest products, superior services, or even ‘wow!’ customer experiences and they are killing it (in a good way). What’s their secret? They make sure that ALL parts of their business follow a design to convert their offerings into the most money (sales, revenue, and profits) possible. Their model design objective is client attraction, conversion, and retention not offering exchange. 

The second reason that leaders and entrepreneurs never design their business to maximize growth while minimizing marketing and sales costs is due to experience.  Less than one per cent of CEOs, leaders and entrepreneurs have extensive, current, and broad experience in designing complex marketing and sales organizations.  Being in marketing or having spent time in sales does not mean you have any advanced expertise or any experience in complex organizational design. 

WHAT IS THE IMPACT OF “FLAWED BUSINESS DESIGN”?

You will…

• Miss out on millions in sales and revenues;
• Burn profits trying to achieve growth;
• Grind through people – especially salespeople. 
• Growth only comes from burning resources to bring in more clients

HOW HAVE MANY LEADERS TRIED TO FIX INFERIOR DESIGN PROBLEMS? 

They don’t. They either settle for low profits or the slow growth they get. Or in other cases, they simply write bigger checks for marketing efforts or hire more salespeople.  The absolute opposite of designing a business to optimize profitable growth. 

DESIGN CHANGE

First of all, there is nothing wrong with focusing effort and energy on having great products and services. However, 99% of all companies, and probably yours, have products and services that are good enough. What they don’t have, is a superior design that attracts high-quality clients and quickly converts those prospects into new contracts and cash. 

The biggest benefit of “superior design” focused on creating wealth – not only on delivering and supporting the offerings – is this: The ease of achieving faster growth and greater profitability. 

KEY LEARNING POINT

Is your business like most others that the focus of their design is on delivering, implementing, or supporting products and services? Exchanging offerings for money? Or, is your business designed to make the most money possible and spend the least doing it? 

ACTIONS AND URGENCY

With you or your leadership team, discuss the principles of designing your business to make all the money (sales, revenue, and profits) possible (read the Phase I – Revenue Ready) to make sure everyone on the team understands the principles. 

Here are some areas to quickly transform from “exchanging” to “maximizing profitable growth”: 

1) What is your company’s core competency?  Is it making the most money possible or delivering a product and service?

2) What is your company’s win strategy? What are you counting on to win every time, your products and services or your business design? 

3) What can be changed about your business, marketing, or sales models, to expedite contact to contract conversions?

4) What parts of your marketing or sales organizations can be modified to optimize growth? 

Stop hoping for success.  Contact us, and we can have a short, no-obligation discussion about “superior design” and what you can do right now to transform your company’s success and business wealth creation. 

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AUTHOR BACKGROUND

Kent Billingsley is the founder and president of the Revenue Growth® Company, LLC (TRGC). He is a published author, international keynote speaker, and business transformation expert. He has become America’s Revenue Growth® Architect by helping thousands of entrepreneurs and CEOs (representing over a million employees) generate several billion in new sales, as well as tens of billions in new revenue and profits for large corporations. He has personally designed, built, transformed, and turbocharged several thousand organizations in 36 countries. Over the last 20 years, his proprietary content and trademarked programs have helped thousands of entrepreneurs and employees become millionaires and multimillionaires by “creating wealth” inside their companies. He can be reached at [email protected].