I often coach my small business ownerclients to visualize their business. There’s a clear advantage in being able to sketch their performance structure. I’m not looking for an artist’s rendering, but it’s helpful to me to understand their idea of how their revenues become profits.

As you consider your own small business structure, be sure to include the following elements:

  • Sales
  • Costs of Production
  • Fixed Cost
  • Taxes
  • Profit

Costs of Production, Fixed Costs, and Taxes are not things you have much control over. This is something you need to know from day 1. However, the Sales Revenue is something you are in charge or – and accountable for. If current and projected 4th quarter margins aren’t what you budgeted or want, focus now on what you have to do through the end of 2012.

Step 1: More Customers bring more revenues to the widest end of your funnel. Narrow your sights to the one end of increasing customer numbers. Customers mean relationships – relationships you can work and rework throughout 2013. Booking them gives you first dollars now and the time to expand your partnership later.

Step 2: Increase Transactions with your current customers. Put some emphasis on getting that one more deal just in time for year-end. Among other things, there may be compelling volume savings to you that you can pass on to the customer.

Step 3: Larger Transactions simply mean more bang for the buck – and your expended energy. A larger transaction, even made at a discounted price, makes your 2012 dollars look better overall – and drives your benchmarks for 2013.

Step 4: Diversifying Transactions is just something additional to consider. It’s good thinking to make your sales transactions more varied. If Customer A regularly buys Items or Services #1 – #3, it is an opportunity to introduce that buyer to #6. You know the customers’ history, so introduce them to something that serves an aligned need.

Again, sometimes ideas drive you, and, at other times, needs drive you. Needs test your agility, responsiveness, and innovation – all the hallmarks of the small business entrepreneur.


By Steven Schlagel