Increasing profitability is usually the top priority for a small business. When identifying revenue barriers, a good place to start is measuring the strength of your talent pool. This area is often ignored especially by business owners who employ family and friends. Corporate companies track revenue per employee and use industry benchmarks to build healthy organizations. Small businesses do not. This simple ratio (gross revenue divided by number of employees) can quickly identify a revenue opportunity.
The term “Getting Ahead” seems to have become synonymous with the term “WINNING-AT-ALL-COSTS”. This attitude leaves Leadership in the dust. How many true leaders are leading countries, Fortune 100 companies, non-profits, entertainment media, sports organizations and government entities?
Small business owners be vigilant in your pursuit of a scalable organization. Ted Wright, CEO at Fizz, @fizz_womm, discussed the idea of scalability in his recent presentation in Colorado Springs. Scalability is the organizational capacity to take on more work while maintaining or improving the profit margin. There are two common ways to improve scalability; increased employee productivity and increased business from current customers. Interestingly, small businesses EXPECT continuous improvement in these areas yet don’t really do much to ensure they get results (assuming revenue per employee and revenue per customer are key performance indicators on the management dashboard).