“And herein lies the secret of true power. Learn, by constant practice, how to husband your resources, and concentrate them, at any given moment, upon a given point.” (James Allen)
Almost every business begins with a single idea, for a single product or service, in the minds of one or two people. Over time, with experience, this core product changes and crystallizes. If the product and the market are right, the company turns the corner and begins to grow in sales and profitability. It does more and more of what it does well and eventually pulls ahead of its competition.
This is your core business. This is what you do best. This is what your customers like the most, and what is most profitable for you. This product or service is the foundation of your enterprise. It is what you are known for, and what you are the most capable of delivering in an excellent fashion.
Define Your Core Business
What is your core business? If everything else was stripped away, what would be left at your core? What is the last product or service you would stop producing or offering?
Whatever it is, the natural tendency of most people is to take their core business, their critical products or services, for granted. Because you are good in that area, because it is a cash cow for you, you begin to assume it will always be there. You then turn your attention to other products or services where you may have limited experience, where you may not be very good at all. This happens to almost every company, and more often during periods of growth and profitability in your core business. It can be a real danger.
Watch Your Core Business
The more you get away from your core business, the more time and energy you will invest in things that are “non-core.” You will use your core business to generate the funds that you then invest in areas that turn out to be less and less profitable. If you are not careful, someone can come along and steal your core business away from you. Then you will be in serious trouble.
Never let your core business out of your site. In Robert Zook’s excellent book Profit From the Core, he explains the nature and importance of the core business, in detail. After working with hundreds of corporations, Zook concluded that the best and smartest strategy for a company in the face of competitive pressures or shrinking markets is to get back to your core and stay there.
Concentrate Your Attention
Continually apply the 80/20 Rule to every part of your business, in every area. Discipline yourself to identify and focus on the 20% of your products or services that account for 80% of your sales and profits.
Determine the 20% of your products and services that account for 80% of your sales volume. Determine the 20% of your customers that purchase 80% of your products and services. Determine the 20% of people in your business who generate 80% of your results.
Identify the 20% of opportunities available to you today that can be responsible for 80% of your sales and revenues in the years ahead. These will almost always be extensions of your current business, your core competencies, and your areas of excellence. Your choice of the opportunities available to you largely determines the future of your business. What are they?
Focus On Value
What are the 20% of your work activities that account for 80% of your personal value and your contribution to your company? If you just doubled the amount of time you spend on the 20% of your high value tasks, and discontinued the 80% of low value/no value tasks that you do, you could become most of the most productive people in your company. These are your core tasks.
What are the 20% of problems, aggravations, and irritations that account for 80% of your headaches in your work? Who are the most difficult people, customers or situations that you have to deal with each day? What can you do today to minimize or eliminate them?
Based on this 80/20 analysis, what steps can you take immediately to improve, increase, and strengthen your core products, services, customers and activities? What should you do first?
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