Want Your Business to Grow? Complete One Material Action Per Day!
When you are running a small business, it is really easy to get distracted. Firstly, your own CEO job most likely has a lot of different tasks, from chief strategist to chief bottle washer. Secondly, your team makes many demands on your time, mostly to help point them in the right direction on their projects. And, thirdly, it’s just too easy to get sucked into the random inbound contacts that come into your email box or through social media.
All I can say to you entrepreneurs who are “floating in the wind” of poor time management is: unless you are doing at least one material thing each day to move your business forward towards new revenue or profit heights, you are never going to grow your business as quickly as you could. Allow me to explain.
What is a material action?
To me, a material action is something that has meaningful revenue or profit implications from its output. On the revenue side, it could be things like launching a new marketing campaign, or making a new sales call, or ideating a new product line, or expanding into a new target-customer or geographic market, or hiring a new salesperson, or negotiating business merger opportunities, etc. Anything that will drive new revenues.
On the profit side, it could be things like cutting your cost structure, or improving your business efficiency. Or, it could be improving your company morale and productivity, or similar tasks. Anything that will drive higher margins for your business.
What is not a material action?
On the flip side, there are a lot of demands on your time that you think may be important, but just are not a material action, as defined above. This could be things like producing your monthly financial statements, or posting to your social media accounts, or writing a new monthly email newsletter. Or, it could be managing your ad agency, or doing one-on-one meetings with your direct reports, or running payroll checks, or upgrading your systems, or relocating your home office, etc. Yes, these are important tasks that need to get done. But, none are going to propel your business to the next level.
Budget more time for more material action.
I bet if you did a critical assessment of how you are spending each of your working hours, most of you are spending the vast majority of your time, if not all of your time, on “less material” action. To me, if you are not spending at least 20 percent of each day on “material actions” you will not have a reasonable chance to grow your revenues and propel your business to the next level.
So, it is important that you actually carve out “material action” time into your daily schedules. For example, maybe you block out 8-to-10 am each day for you to think and act strategically and materially about your business. Note that I intentionally did not suggest 3-to-5 pm each day, when you are most likely tired and not doing your best thinking.
A case study: Part one, the good.
We recently acquired a business in February 2018. At the time, they were doing around $2.5 million in annual revenues. Within four months of acquiring the business, our annualized revenue run rate had doubled to over $5 million. How did we do that? We focused on material actions to drive the business forward. We quadrupled our marketing budget and hired a new ad agency; we launched an SEO effort, opened new sales and marketing channels, expanded our sales team, grew our margins, etc. Our focus was on driving revenues as quickly as we could, and our time was firmly focused on making those material actions happen.
Case study: Part two, the bad.
To continue the story above, with the increase in revenues came an increase in time demanded for “less material” projects in months that followed. We learned our customer relationship management (CRM) platform could not handle the extra volume, and we needed to upgrade to a different CRM, a decision that needed to be researched. We learned our product information on the website was out of date and needed to be updated. Our product offering needed to be fine-tuned, to make the business more scalable.
Moreover, our ad agency suggested we make some technology changes, which resulted in some unexpected hiccups and fixing time required. To double our staff, we reviewed hundreds of resumes and held dozens of interviews. Sometimes those hires worked out, and other times they did not, spinning our wheels right back to where we started. Quickly, the time I had to focus on “material” projects, started to get consumed by “less material” projects. And, guess what happened: sales growth started to slow down!
Hand off less material work to others.
I get it, small businesses are typically undercapitalized and don’t necessarily have the luxury of large teams of staff to help leverage your workload. But, even in small businesses, you need to figure out how to keep yourself moving the business forward with “material” projects.
Where you can, hand off the “less material” work. Let your bookkeeper produce monthly financial statements. Let your head of marketing manage your ad agency. Let your head of technology review various systems needed. Take yourself out of those processed, at least until the busy work is done, and then you can review the final output in each area. Don’t let the “less material” work get in the way of you having the time required to drive the business forward by completing material work.
Executives in small businesses are typically very busy people, wearing many different hats at the same time. The real challenge you will have is making sure that 100 percent of your time is not consumed by “less material” projects. You need the discipline of: (i) knowing what projects have the highest odds of moving your revenue or profit growth to the next level (which is an art of its own); and (ii) making sure that time slotted to work on “material” projects is actually getting used to get it done. Remember the scene in the Pixar movie “Up”, where the dog kept getting distracted by squirrels running by? The “less material” work that you find yourself doing are your “squirrels," distracting you from where your focus needs to be.