In business, your operations need to be as efficient as possible. But I've seen too many companies carry too much "overload," which hinders their ability to advance. Some of this overload is small things, like hiring more employees than necessary or paying huge sums for services. Or invest poorly in their sales and marketing. Some of this overload is very obvious, such as running too many departments or focusing on channels that don't generate revenue. This post will help you learn how to recognize the different types of overhangs, so you can evaluate your work and see if there is any pruning that needs to be done.

Strategic burdens

The strategic burden is to build a strategic plan that focuses on areas where there should not already be a business focus, or to invest resources in a way that does not achieve return on investment or becomes dispersed to the most profitable areas of the business. This can include things like supporting too many brands or divisions, too many products, or too many sales channels, which collectively pull focus away from the true core competency or most profitable product line of the business.

Operational burdens

Operational burdens relate to the business operating inefficiently. This can include having a staff that is too large for the real business needs, renting a larger office than you really need, paying more than the true market rate for services, or worse, paying for services that you don't use at all.

Sales and marketing burdens

Sales and marketing burden, which is investing your dollars in employees who don't generate enough sales to meet (or at least cover) their goals or investing advertising dollars in campaigns that don't generate a profitable return on ad spend. You must carefully study the performance of the sales team and the performance of the advertising team/agency to ensure they are achieving their goals. And not only in total, but particularly for each specific campaign, to optimize and trim optimally. For sales performance, promotion and advertising, you should always be cutting the “losers” and reinvesting those dollars to ramp up your efforts in the “winners.”

As a strategic example, when we acquired the existing company, it operated two brands, targeting B2B and Shop Your Own Bar, targeting local consumers. When you turn on two things, it means double the effort. We needed to create and maintain two different websites and marketing campaigns, for example. When we looked at financial transactions by brand, we discovered that your bar store was generating about $20% in revenue, but only $5% in gross profits, as the average order amount was only $2,000 compared to $6,000 at the restaurant furniture store. There are material differences in operating efficiency with serving the consumer market, which often results in a lot of phone calls and a lot of claims and returns, creating a lot of extra work. At the end of the day your bar shop had a correlation rate at best.

We have decided to close Shop Your Bar, the company's original brand, to help us cut the “excess burden.” The physics of strategic focus has helped us on the most profitable business buyers, has contributed materially to improved operating efficiency, and most importantly, has helped us reinvest those marketing dollars into the highest performing business businesses to materially accelerate our revenues and profits. “Sacred cows” were sacrificed to the founders of the company, to help the best businesses reach their highest levels.

Concluding thoughts

Small businesses cannot afford any excess burdens. You need to be active to get maximum speed, and sharply focused on what will bring the most profits. Any matters that get in the way of that goal must be sacrificed for the greater good, no matter how much you value those “sacred cows.” This may result in some short-term pain, but I guarantee that the long-term gains in focus, operating efficiency, and profits will quickly heal those wounds. So what are you waiting for? It's time to grab your magnifiers and start looking for any overloads in your work. Then, grab your ax for the big ones, or your scalpel for the small ones, and start cutting. Your bottom line will thank you!