The Power of Focus at Your Service Business
This article originally appeared in the March-April 2013 issue of Snow Business.
Most contractors are involved in too many things. Their businesses are going in too many directions. Many feel overwhelmed and out of control. Their problem is simple—they lack focus.
Lack of Focus Leads to Chaos
There’s an old adage that says, “Person who chases two rabbits catches none.” It illustrates the price you pay for having excess complexity and distraction in your business. Complexity makes everything more expensive. It makes employee learning curves higher. And when problems occur they take much longer to fix.
Complexity is the enemy of your business, and if you lack focus, it can creep up on you. Everything gets more complicated when you don’t have a goal, a plan and a decision maker who can say: “This isn’t something we should be doing.”
Crush Complexity with Focus
Successful businesses have identified a clear marketplace and customer base to focus on. They decided what they want their brand to be known for, and they focus on attracting people who value what their brand provides.
You must decide what your brand focus is going to be. Until this is clear, the market and your team won’t know, which will deter growth.
Choose the Right Market
Look at the services your company offers year-round. If you are trying to be all things to all customers, it is easy to dilute your ability to focus on those exceptional services you offer. Look at who you are servicing and what it takes to service them.
Until you decide what the main market segment of revenue is going to be for your business, you will continue to divide your attention and resources, which will hinder your success. Once you decide on your service offerings and your market, you can focus your resources to dominate. You’ll also be in a stronger position to compete against other companies that lack focus and are overextended.
Put Your Focus to Work
Once you have a focus, use it to streamline the performance of the key areas in your business. Here are four items to get in place this spring:
- Organizational structure. Knowing whom you are serving makes it easier to staff appropriately. Hiring people with the right skills and providing the right training is paramount to success. It’s tough to be an expert in one field, much less several. Competition is in every segment. How many competitors do you want to intimately get to know and bang heads with? Companies that win know their market, put the right team in place to compete, and do so without having a bloated overhead structure.
- Budget. It surprises me how many companies do not use a budget. I don’t think people appreciate the focus benefits a budget provides. More than anything else, it provides predictability. If you’ve taken the time to build a thorough, thought out budget, then you likely have a focused plan. Meeting or exceeding your budgets year-over-year is another good sign that your company is correctly focused. Effective budgeting means you understand your costs and revenue pipeline.
- Sales pipeline. More companies miss their budget figures not because they can’t predict their costs accurately, but because they don’t understand and focus on their sales pipeline. Owners and managers get fixated on operations. This is easy to do, but the revenue needed to operate, grow and make a profit is equally or more important than the operations. The need to understand your sales pipeline and closing ratios is the key to focusing on the right marketing and sales process. It’s very mathematical once you’re tracking it and dissecting the data. I can’t think of anything more valuable to focus on as a business owner or manager. Knowing your sales ratios for all profit centers is a critical area of focus. Hitting your numbers allows you to be confident in making the moves you need to proactively make decisions in a more strategic and timely fashion. It all comes back to understanding what your focus is and putting the correct people, resources and plans in place to achieve this focus.
- Do a “focus audit.” Look for areas of complexity in your business, like serving too many customer segments. Make a choice and a plan to focus on growing your most valuable customer segment, while reducing the work for anything outside it. Focus your branding, organizational structure, budgeting and sales pipeline to grow and serve that primary customer segment.
What is your focus for the 2015 season? Share it with us in the comments section of this post.
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