Last week I talked in a general way about where business leaders focus their attention – top line v.s. bottom line. Since the business focus follows the focus of the leader, there are specific areas that leaders should understand well. If these metrics are off, you need to be paying close attention and know how to address them.
If your revenues are not what you budgeted, how do you fix that? (For those who don’t have a budget think…predicted, dreamed of, wrote on the back of an envelope.)
There are only two options:
Raise prices
In this inflationary environment, it is really hard to raise prices. However, can you selectively raise prices on certain products or services? Or examine whether certain customers could pay more because of the channel they are in, geography, or some other differentiator.
Sell more
There are billions of business books that help you create strategies and analysis on how to sell more, so let me just say-go back to basics.
What do you offer?
To whom?
And, why should they buy from you?
Then, go through it again. Have your whole team go through it and listen for what you don’t already know. Ask your customers and vendors. Ask what you are missing, what assumptions you are making that need to be challenged. My personal favorite: “that’s the way it has always been done.”
Gross margin is next!