Entrepreneurs, by nature, instinct, conditioning, competitive spirit are very into “more”. So are sales professionals. More gross revenues. More sales. More customers or clients. More web site traffic. More leads. Even more square footage, more employees.
But more is not necessarily better, not necessarily more profitable.
The unbridled lust for growth of any kind at any cost gets a lot of business owners into a lot of trouble. For salespeople, it can lead to burn-out. For both, their best clientele being poorly served and neglected as quality thins to accommodate quantity.
Few business owners take the time and trouble to carefully and analytically study their present customers or clients, account by account, for contribution to net profit. Few entrepreneurs analyse their own activities and time useage the same way, in terms of contribution to net profit.
When they do, they discover the classic 80/20, 20/80 Rule is alive and well, and further, that there’s a 95/5, 5/95 Rule too. In brief, 80% of profits tend to come from 20% of clients and time. Usually about 5% of clients and 5% of time use prove infinitely more valuable than the other 95%. The results of this rarely done analysis are often: getting rid of the least profitable clients, stopping or delegating or otherwise altering the least profitable time use.
In many instances where I’ve come in as consultant to a business, coach to an entrepreneur, I’ve made less into more, by pruning away the clientele consuming 80% of the resources but contributing only 20% of the profits, creating fewer customers rather than more, and enhancing the relationships with the 20% who contribute 80% of the profits.
Most business owners are being supported by a relatively small, often
shockingly small number of “best” customers; all the rest,
the bigger number are illusion, or worse – timewasters.
Most entrepreneurs are also producing 95% of their income and wealth from only 5% of their time. Even a slight re-adjustment in time investment can multiply income, hence LESS is MORE!