Whew! Whether you are breathing a sigh of relief that you can put a dismal 2016 behind you or breathing a sigh of gratitude for the break the holidays provided from your record-breaking year, the start of the new year is a good time to pause and reflect on the good and the bad of the previous year.
Every year around this time, I look at the lessons we’ve learned either in our firm, or in common themes we’ve helped our clients work through.
Here are Profit Point’s Top 5 Lessons Learned in 2016:
- Mix matters. Looking only at your total sales number can be deceiving. We had a number of clients who hit their revenue number but fell way short of their planned margins. It’s because they were selling more, but of lower margin product lines. That’s why what the mix of products or services matters as much or more than hitting your sales goals. Remember, your margins are the profits that pay for all your overhead expenses. If you miss your mark, you may need to make adjustments to your spending.
- Be brave. Say “No.” This year we turned down almost as many engagements as we accepted. It’s because we decided what industries and platforms we wanted to specialize in and what sized client would benefit from our services. By narrowing our focus and picking a few verticals, we can serve our clients better and develop a deep expertise in those areas. Believe me, it takes courage to say no, especially when you have someone who is eager for your help.
- Know the sugar high. We have a client who had a bump in project work, but instead of being blinded by the “bling” of these new sales, he kept his eye on the real prize: increasing his monthly recurring revenue. Don’t get me wrong, he and his team called out the project work for what it was– in his words, it was “a sugar high.” He also didn’t staff up to accommodate that extra growth, knowing that most of the project work was a one-time hit to his top line. He’s going into 2017, knowing that he’s going to have a tough time matching the revenue performance of 2016, but confident he’s right-sized for the potential year of decreased sales.
- ABS- Always be selling. This one should have its own blog post, and maybe someday I’ll write it, but if there is one thing we have learned this year, it is that we always have to be selling our services. Not in the corny, “hey-you-want-to-buy-some-consulting-services” kind of way, but consistently reiterate and remind our clients how far we have brought them on their journey. This goes for most of our clients as well. They have learned that it’s detrimental not to be communicating the value they bring to their clients; because their customers may take for granted (or forget) the value they are receiving. It’s almost as important to explain to them the “why” of the recommendations, as much as what our clients are doing for their customers.
- Wash, rinse, repeat. Another thing our clients have learned this year is the value of repeatable processes to build a scalable business. While that sounds like a lot of jargon, it is the only way you can build an organization that can 1.) function without you, and 2.) grow. Whether it is tweaking your sales process to shorten the sales cycle, bringing consistency to an estimating and quoting process, or having a documented accounting process in places you can “democratize” the information within your organization, standard operating procedures become the manual and foundation on which you will build a thriving business.
So those are a few of the top lessons learned this year that will help all of us go into 2017 with their eyes wide open—and a little wiser.
What lessons did you learn last year that you’ll be using in 2017?