Monday, November 10, 2008
Good, Now Understand That Your Business is More Perishable than a Glass of Milk.
For Business Owners, this is a must to understand if they are going to generate the maximum revenue potential on a daily basis. Every night that one single widget in a particular business goes unsold, that widget has lost that day’s revenue, forever. It can never regenerate revenue for that given day again, so it becomes non-recoverable potential (left on the table) revenue.
A glass of milk has a longer shelf life than an unsold widget. If you do not drink all of the milk that you purchased today, you can at least put that milk back in the refrigerator and have some of it for tomorrow. You can repeat those above steps for at least a couple of weeks, so that you have the opportunity to receive the greatest consumption relationship to the money spent, for the value of that product. Not so for an unsold widget or for whatever product or industry that you work in. Once that day is gone, you can never sell or use that moment again for revenue generation or operational efficiency gain. With that being said, it means that every business is more perishable than a glass of milk. The business unit that you are involved in must make sure that it has a greater sense of urgency regarding this principle and acknowledge its perishable nature.
Let's say that you have eight hours to make the most money on any given day. After just one hour of that day, you have lost the opportunity of making the maximum revenue generation by 12.5%. Start thinking about how perishable your product really is, even if it has a shelf life of one hundred years. Every day that you do not maximize your revenue potential or gain greater operational efficiency; is a day that is lost forever.
Is your business running? You better go catch it and make the most money with it; it is not a glass of milk!