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Is the economy getting you down? What about your business? If you are feeling the pinch with your company revenues, you may not be following the 20% rules.
Richelle Shaw, the only female African American public utility owner in the nation, gives her advice for bolstering your business against the ups and downs of the economy. She says she found herself giving the following advice to clients and colleagues in recent days.
Richelle owns FreshStart Telephone. She is a multi-millionaire mompreneur who also wrote the book, How To Build A Million Dollar Business in Las Vegas – Without the Casinos. She is now a business coach. You can read more about her work at www.richelleshaw.com.
Richelle says…
Often, business owners forget that diversity leads to stability. Having one of anything is dangerous. Check out this list to uncover where your problems may lie:
Review your business to see if you have more than 20% of any one thing.
1. 20% of revenue from one customer: Do you have a large customer that represents more than 20% of your revenue. Debbi Somers of Somers Furniture used to provide services to (her local) convention authority and the majority of her business came from that contract. The contract was not renewed, and she was left with 35 employees without work. She had to scramble to replace the revenue. Six years later, she vows never to let that happen again.
2. 20% from one sector: Cindy Throm from Employers Benefit Design owns a multi-million dollar insurance practice primarily focused on the construction industry. (Today) the industry is down and revenue is off for the first time in 18 years. She has now branched out to maximize other industries but it was a shock originally. Review your customers for trends. It is good to have a target market, however once it reaches 20% look for ways to diversify.
3. 20% from one product or service: Kelly Welter from KKW LLC is a CPA and only provides tax preparation services. She used to live in a feast or famine environment. She added a new service with monthly payments to change her business and manage (during) the other months of the year.
4. 20% from one marketing medium: For years, I only advertised on the radio for customers of my telephone company, FreshStart Telephone. The conversion was fantastic, and I understood the medium. My largest competitor who had more money than I did, placed ads on the same stations, selling an irresistible offer to block any prospects from choosing my service. It worked. My new customers went from 400 per month to 40. Now, I use more than 6 different media to bring in new customers to my business.
Are you following the 20% rules? What makes up the greatest percentage of YOUR business?
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