CDISSIA

Small Business Secrets: The Great Success Of All

by Brian Li, head of the UK's Business Growth Centre

If you are involved in any small or home-based business,
the secrets of success discovered over a century ago by
an Italian economist, Vilfredo Pareto, will skyrocket
your sales and profits.

It's the one true principle of highly effective small businesses
throughout the world today. Hardly any of them use it -
and guess what? - over 96% of them go bankrupt
within their first 120 months of operation.

This pattern of predictable imbalance occurs throughout
the business world - 80% of results flow from just
20% of the causes. However, up until now, hardly any
small or home-based businesses have applied this
dynamic principle.

It will transform your business in such an incredible way,
you'll marvel at it's effectiveness and simplicity.

Winners and losers

Identify which of your products or services are winners
and which are losers.

Start by looking at your profit figures for each of your
products. Do not forget to build in all overhead costs.

When you have a full list of products and their profitability,
you can then begin to compile a list in order of
highest returns.

You can immediately identify which of your products are
providing your greatest profits - normally, 20-30% of them
are giving you 70-80% of your profits. It's essential to
concentrate most of your efforts on your winning products.

Spend the least time on those products that give you the
least return on sales or, better still, cut them out altogether.

By adopting this strategy, all of your efforts will be
concentrated on your best performing products and you
will start to produce superior results.

Customers and their Purchases

Take a long look at all of your customers and their
purchases. You'll identify which ones are making the
largest purchases and which ones are the least
price sensitive.

Don't forget that many larger customers may squeeze
your profit margins and may not be as valuable as you
think. Also remember, that smaller customers may
cost you more to service.

When you have compiled a list of your most important
customers - i.e. those that provide you with the greatest
long-term profits - concentrate most of your resources
on them and serve their every need. Build them into
life-long clients and provide them with exceptional service.

If you establish close relationships with your best clients,
and spend more time with them than your other lower profit
customers, you will be adopting a winning strategy that will
bring you wonderful success.

Distribution problems

The areas where you trade may also be producing good or
bad results. If so, concentrate on those distribution areas
that provide you with the greatest profits and again, serve their
every need and build long-term close relationships with them.

What about your marketing strategy? Identify the areas that
gives you the best response rates.

Research also indicates that simplifying your products
will improve your results considerably. The reasoning behind
this strategy is that complicated production processes
increase your overheads. Simple products reduce complexity
and therefore require less management.

Sit down and really think about the most important parts
of your business and how they can be improved using
the 80/20 Principle. You'll save yourself lots of effort
on promoting those areas of your business returning
small profits.

Welcome to a rosy future.

About the Author
Brian Li is head of the UK's Business Growth Centre Discover how to get virtually every job you apply for and
a host of incredible secrets to skyrocket your sales:www.businessgrowthcentre.com
Also learn how to start a business that's self-funding!You won't find anything like this anywhere else:
Email brian.li@businessgrowthcentre.com for details.
Copyright (c) 2002 Brian Li