I returned from DC last night, having spent the day with a solution provider in the software space. One thing that stands out and is worth repeating here is the discovery of a profit multiplier. According to Jim Collins, every company should have an economic engine, and most resellers can put more on the bottom line if they figure out what the multiplier are and where profits are leaking out. The comment that triggered our direction should be understood by all resellers, “Thinking your sales team will double sales this year simply by working harder is tempting by unrealistic.” I would add, that setting strong financial goals and then hoping to acheive them without a significant change to the way you do business is foolish thinking.
Once identified, we were able to come up with twenty ways to stop the leak. Not all 20 will prove to be do-able or realistic short term fixes, but 4 or 5 of them stood out clearly as ways to multiply bottom line profits over the next several months.
Isn’t it worth taking some time out of the field to study the business model, identify the levers that multiply the business, and formulate a strategy to get them in motion? This is what it means to work on the business rather than always working in the business.
© 2011, David Stelzl