What Are You Focused On?

What Are You Focused On?

Thursday, April 23, 2015

A number of years ago, a fellow trainer and close friend asked me a thought-provoking question. He asked me how one of our many products was selling. My immediate reaction was to say sales were pretty good, but before the words came out of my mouth, I spent a few seconds in thought. When I finally did answer, my response was "Actually, sales aren't very good on that product." 

Then he made a comment that threw me. He said, "Tom, you're not focusing on selling that product, are you?" I was a bit taken back with his comment until I realized he was right. I wasn't focusing on selling that product. His next comment was the eye-opener. He said "Tom, you sell what you focus on!"

That comment, "You sell what you focus on," has rung in my ears ever since. The first 25 years I was in business I "focused" on presenting one-day seminars and our three-day Basic Business Boot Camps (now called Planning for Profit). The results? I was presenting several times a month, which was necessary to cover overhead and generate a reasonable profit. 

As most of you know, two years ago Bill Kinnard purchased the business and the offices were moved to Green Bay, WI. When that happened, a huge percentage of my monthly fixed overhead disappeared. Now I am still working within the business, and plan to as long as I am able. However, with my overhead greatly reduced, the question I then found myself asking: "Ok Tom, your overhead is greatly reduced so what do you want to do for your remaining years in the business?" 

I love teaching, and will continue to present seminars and the two-day Planning for Profit programs, but my true passion has been working with contractors one-on-one through our two-day, on-site Company Overview program. With the business sold, and my fixed overhead greatly reduced, my mindset changed and I began to focus on doing two-day Company Overviews. I started thinking of new ways to market the service. Ideas began to literally pop into my mind. When I wrote articles, the new twist was Company Overviews. As I presented at national conferences, I found myself thinking, "What needs to change about my presentation, and feedback sheets, to incorporate the overviews?” I started talking to distributors about companies that might need a bit of one-on-one help, and I am now regularly presenting free webinars for a number of national manufacturers and trade associations with the focus of creating some one-on-one work . 

Bottom line, my focus changed and, as a result, 70-75% of my time is now spent doing one-on-one Company Overviews!

The question I want to pose to you is the same one that was asked of me. "What are you focused on?" That focus can take several forms. You might want to focus on one or two specific offerings like service and/or selling maintenance agreements. The focus might be internal. "How can we improved efficiency, reduce non-billable time, or do a better job of marketing?”

One of the things I have learned over the past 27 years is that there is a limit in terms of how many areas you can focus on. Trying to focus on too many areas has predictable results – you end up not doing a really great job on any area! The most profitable companies I have worked with over the years nearly always had one thing in common. They focused on doing one thing, and doing it better than anyone else. Some companies were totally service-oriented while others were nearly 100% commercial. I even worked with one company that was 100% new construction and, as many of you know, there is typically very little money to be made in the area of residential new construction. But, guess what? That company focused all their efforts on becoming very efficient at what they did from crew training to their bulk purchasing of materials. The end result was again predictable – they generated a substantial profit.

Our Labor Pricing software has a "what if" section. Take a look at the below report. Notice the results of the "what if" if the company focused on increasing their sales by 3% while decreasing fixed overhead costs by 2%. Those are NOT huge changes but notice the difference in bottom line profitability if those two goals were met. Wow......bottom line profit went from $69,260 (15%) to $84,482 (17.8%).

Samplecompanyreport

One last example of what changing your focus can do for your company. A little over a year ago I performed a two-day Company Overview for Assured Energy. The results of the computer modeling of the company, department-by-department, clearly showed that if they would shift their focus from doing several things to focusing on a couple really profitable opportunities, their profitability would substantially increase. I received the following email last week.

Tom,
I just wanted to drop a quick email and give you an update on our progress since you were out with us in the fall of 2013. When you came out and helped us filter through the information we saw where our highest profit margins really were. I decided to pursue those programs full force and examine all programs and opportunities with the same metrics.

2013- We grossed about $650,000 and lost about $70,000 when it was all done.
2014 - We grossed $1,350,000, expanded to a second location, expanded from 2 trucks to 6 trucks, and they are all paid for, and we made $235,000 at year's end. Still don't have buckets of money but I am not drowning in debt either!

Thanks again for the services you provide; it certainly helped us out in a big way.
Cal Pickup
Assured Energy Solutions

Notice his comment, they "decided to pursue...” which is another way of saying they began to focus on a couple of potentially really profitable areas. Wow, you can see the net result.

I want to challenge you to spend a bit of quality time alone, or with your management team, and evaluate what's making money and what is not. Once you and/or your team fully understand which areas are the most profitable then "focus" on those areas. If you need some help evaluating your company, give us a call at 800-432-7963.

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