Six Steps to a Profitable and Sustainable Business Part 5
2. Marketing is an Investment
Your accountant will tell you that marketing is an expense. The entrepreneurial mindset views marketing as an investment. The greater the difference between what it costs you to acquire a customer and the lifetime value of the goods or services sold to that customer, the greater your profit potential and return on investment. Later in this article under the title Niche I will introduce the five key marketing leverage points in your business that if managed properly will rapidly improve cash flow, revenue and profits. It is important that you correctly identify the marketing strategies/investments that will keep you ahead of the competition.
3. Test and Measure
The basic difference between successful businesses and poor performers is that they test and measure everything that they do. It is impossible to play a game or manage a business without keeping score. An iatrical part of any business is to test and measure everything of significance in your business. You can then build a set of Key Performance Indicators (KPI's) tailored specifically to be measure. This is the only way you, as the business owner, can continuously monitor all the key factors that determine growth and profitability for your particular business. Your KPI's and your Financial Plan constitute the Management Control Plan for your business. This is like a Control Panel on your desk that enables you to track your progress. It will tell you what is going on in every key area of your business and enable you to respond quickly to changes and new situations.
Your accountant will tell you that marketing is an expense. The entrepreneurial mindset views marketing as an investment. The greater the difference between what it costs you to acquire a customer and the lifetime value of the goods or services sold to that customer, the greater your profit potential and return on investment. Later in this article under the title Niche I will introduce the five key marketing leverage points in your business that if managed properly will rapidly improve cash flow, revenue and profits. It is important that you correctly identify the marketing strategies/investments that will keep you ahead of the competition.
3. Test and Measure
The basic difference between successful businesses and poor performers is that they test and measure everything that they do. It is impossible to play a game or manage a business without keeping score. An iatrical part of any business is to test and measure everything of significance in your business. You can then build a set of Key Performance Indicators (KPI's) tailored specifically to be measure. This is the only way you, as the business owner, can continuously monitor all the key factors that determine growth and profitability for your particular business. Your KPI's and your Financial Plan constitute the Management Control Plan for your business. This is like a Control Panel on your desk that enables you to track your progress. It will tell you what is going on in every key area of your business and enable you to respond quickly to changes and new situations.
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