Really Moving the Needle on Profitability

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In my last blog post, I said that in order to really move the needle on profitability, you must focus on two key areas of your business:

  • Products (the items or services you sell)
  • People (the staff you employ and the people you serve)

Today, I want to hone in on People. It’s been said:

It’s not about what you know but who you know.

That old adage rings true in many situations, including your business. The people you employ and the clients you serve can drive your business and its profitability up, up, up or drag it down to bankruptcy.

STAFF

I can’t overstate that who you hire to do each job in your company is critical to its success. So, take your time in the hiring process. Learn all you can about each applicant, test their skills and knowledge. But most importantly, figure out if they will be a great fit with the culture of your business and if they have the character traits that match up with your company’s values.

When it comes to how the work is getting done by your staff, look for inefficiencies and seek to eliminate them. (You don’t want work being done twice, after all!) You should be encouraging your team to challenge how things are done and bring solutions for better efficiency. (You might even consider giving bonuses to staff who find better ways to serve your customers.)

Jim Collins, in Good to Great, said:

“…Leaders of companies that go from good to great start not with “where” but with “who.” They start by getting the right people on the bus, the wrong people off the bus, and the right people in the right seats. And they stick with that discipline—first the people, then the direction—no matter how dire the circumstances.”

CLIENTS

You have clients who aren’t a good fit; you know you do. When it comes to clients, do an analysis of several indicators to determine if they are the right fit for your company. Look at the “cringe factor” of each client. Do you cringe every time you see their name on the caller ID because you know you’re about to hear bad news? Consider value and loyalty, and whether each client finds value in the services you provide and is loyal to you and your company.

It’s important to realize that the time you spend on the clients who are the wrong fit takes you away from serving the right clients. 20% of your clients will yield 80% of your profits, so it’s really important to filter out the 80% in order to identify the 20%.

If you currently have staff or clients in your business that aren’t the right fit, then it may be time to make some changes to get people in the right seats on the bus. I would love to hear from you about what changes you have made in the People of your business.

My Capsule Wardrobe and Capsule Business Focus

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In previous posts, I introduced the Capsule Wardrobe concept and explained how the Capsule Wardrobe is similar to choosing your business niche.

Today I want to discuss focus and how the Capsule Wardrobe’s seasonal focus relates to business focus.

A Capsule Wardrobe requires you to stay focused on wearing only the clothes you selected for three months. Fashion trends can change in the blink of an eye, but a Capsule Wardrobe gives you a focus on set pieces of clothing for three months so that you aren’t tempted to buy every new outfit you see. Embracing a Capsule Wardrobe forces your shopping to become intentional and focused. You now shop with a purpose – to fill specific voids in your Capsule with items that bring you joy – rather than simply shopping to kill time, spend money, or bring a bit of happiness.

It’s important to trust that the pieces I originally picked for my Capsule are the right pieces for this season. I can dive into the selections in my wardrobe and really get creative with putting outfits together. It’s been said that scarcity fosters creativity.

Capsule Wardrobe FocusThat creativity can be found when we stay within our focus area. Similarly, I have found that once a business carefully niches, it then needs to focus on its niche. Just like fashion trends or sale items, business opportunities will come your way. If the opportunity fits within your niche you should jump on it quickly. However, if it is a distraction that will take you away from your chosen niche, you may need to place that opportunity on a shelf while you focus on your business niche for a set time. Focusing on your business niche will ensure you are providing the value your customers need instead of chasing after distractions.

I have a personal tendency to be sidetracked by “Ooooh shiny” distractions and find that it’s critical to quickly identify whether it does or does not fit within my area of focus and whether it’s actually an opportunity or a distraction. Of course, it would be silly to be completely blind to business opportunities, so we have to practice discernment.

My husband and I recently took a weekend getaway trip, and while eating at a restaurant I noticed some cute t-shirts in the gift shop. In the past, I would have snatched up two or three and been on my way with my fun purchase, only to later realize that they weren’t the cut or fabric I prefer to wear. That would result in me wearing each shirt only once or twice and then donating it at Goodwill. This time when presented with these shirts, I knew it wasn’t time to shop for my Capsule, so I was able to pass them by, knowing that they didn’t fit within my Capsule focus for the season.

In a similar sense, various people, businesses, connections and events frequently come my way as a business owner. It’s critical that I focus on what I set out to do in my niche and believe that what I choose when I created my niche is still the right choice. When it is the right time to think about other directions, the right opportunities will come along.

Here’s to staying focused on your business niche and running a successfully focused business!

Creating My Capsule Wardrobe

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First thing’s first- What Is a Capsule Wardrobe:

Planning a Capsule WardrobeThe idea behind a Capsule Wardrobe is to carefully choose a certain number of pieces of clothing (I say 40) that bring you joy and wear them for three months.

Unfancy says this about a capsule wardrobe:

Now I always feel like I have something awesome to throw on, be it Sunday brunch or a client meeting, because every single item hanging in my closet is something I would love to wear right this moment.

Next- How to Work Your Capsule Wardrobe:

Setting Up Your Capsule WardrobeAs you select the pieces for your Capsule Wardrobe, be sure they are pieces you can easily mix and match because you will want to get the most use from those items. You will wear these items for one season (approximately three months).

During the next three months, do not shop for clothes. I repeat, do not shop.  Focus all your clothing “energy” on the 37-40 items in your capsule wardrobe, mixing, matching, and optimizing what you have.  In doing so, you’ll find renewed creativity to invent new outfits so that you don’t tire of your selections. And by limiting your decision making, you will reduce decision fatigue and anxiety.

During the last two weeks of the three-month period, take inventory of the items in your Capsule and decide what you need to move out and replenish with something different for the upcoming season. Perhaps you will need to purchase something new, or you may decide to pull from a seasonal stash for the upcoming season. When the two weeks of planning, shopping and renewing are complete, begin wearing your new capsule for the next three months.

Last- Why the Capsule Wardrobe works for me:

As my journey toward a less cluttered, more focused life has progressed, I have purposefully adopted a Capsule Wardrobe. Implementing a Capsule Wardrobe is certainly not something I just “did” one day. It has been an intentional step in simplifying my life, and it requires careful thought and consideration. But the payoff from a simpler dressing routine, less clutter, and clothes I love is enormous!

Be sure to read next week’s blog post for my big “ah ha moment” when I discovered that the Capsule Wardrobe beautifully parallels simplified business philosophies.