How Fine Tuning Your Focus Can Grow Your Business

“My success, part of it certainly, is that I have focused in on a few things.”—Bill Gates

Many business owners don’t realize that their success is driven by a small subset of their products, services, and customers.

Actual profit drivers may be hidden in a mass of data and unknown opportunity. For most people there just isnt enough time, and the cost to bring in additional employees is not available, making it difficult for owners to act strategically when planning future product and service mixes.

Many business owners get by on their instincts, making the right decisions more often than not. But why rely on instinct when the information needed to make informed decisions is available?

Here are three ways to evaluate your products, services and customers that will help you remove the shackles from your business: Refine Product Offerings to Increase Profitability

Whether you manufacture, distribute, or sell products, your profitability and growth potential relies heavily on managing your product mix. Invest in the wrong products, and you will tie up valuable resources in the form of sales expenses, manufacturing capacity, or inventory or retail space.

Most organizations have profitability targets for all products. But is a traditional profitability analysis enough? Companies can stagnate when they stick with a product well beyond its usefulness to the organization. Looking strictly at the marginal profitability of a specific product can miss something more important—the opportunity cost paid by continuing to produce it. Under-performing or declining products can stifle innovation and keep you from capitalizing on better opportunities.

Remember Kodak? Kodak was one of the world’s great companies.

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