Allow me to begin today by saving you $100,000. Ready?
You don’t need a graduate level MBA to run your small business.
There, I did it. I took one for the team, because I got my MBA about 10 years ago now and I can tell you for certain most of the skills I learned there don’t translate to what I’m doing now.
Of course, I did meet my husband in my MBA program, so it worked out for me! But I certainly can’t recommend investing in a 6-figure academic program to meet your special someone!
But one thing I definitely learned; it was drilled into me.
In fact I think it’s the entire point of the MBA…
Is that the job of a CEO is to measure, track, analyze and strategize.
Again and again, in class after class, what we learned was how to gather and analyze data in service of the profit margins of the company.
After having coached literally hundreds of business owners who all desperately want more profits in their lives and bank accounts, I can easily say this is the one skill set that is most glaringly missing for business owners who don’t achieve their goals.
It’s definitely the great differentiator, too. Without fail, when I meet business owners who DO this, they’ve got a reliable, growing and profitable business. When I meet business owners who DON’T do this, they’re inevitably overworked, overwhelmed, and underpaid.
The “this” that I’m talking about is tracking and making decisions by a certain set of indicators.
Everyone’s heard of KPIs, or Key Performance Indicators. But the fact that everyone has heard of them and most small business owners still aren’t making use of them means their significance has faded.
So, what I’m talking with you about today, is what I’ve affectionately named “Profit Generating Activities”, or PGAs.
These PGAs have nothing to do with Tiger Woods, though.
What are PGAs?
PGAs are the actions you or your team take that eventually lead to profits. They evolve as your business grows, so they’ll change over time.
And of course everything follows the 80/20 rule, so if you isolate your most profitable PGAs, you could soon find yourself working a few months out of the year and enjoying 7-figure compensation.
Why are PGAs important?
Because clarity about how to use your time and resources is what leads to a lucrative business!
To become an effective strategist and earn the profit you want, you need to focus on a more data-centered approach.
This is universal, whether you were born with a calculator or a paint brush in your hand.
But don’t worry, it isn’t hard. However, it may require changing a strongly held mindset such as “Hilary, my brain just doesn’t work that way.”
Yes, it can. I promise.
Finding elegant and meaningful ways for your business to measure success (and shortfalls) is not only critical, it’s your most important job.
Tracking PGAs drives you toward growth and optimization. Without knowing and tracking your PGAs, it’s almost impossible to build a thriving business.
The more you understand your numbers, the more effective you will be at making the right decisions about how to allocate your time, which is scarce, and your team’s time and focus.
What are examples of PGAs?
Examples of the common essential PGAs used in businesses include:
Number of times you’ve “touched” a prospective customer
Number of times you’ve asked people to “refer a friend”
Number of offers you’ve made in your weekly newsletter
Number of meetings with qualified clients
Number of clients you received from that book you self-published
Number of people you’ve asked to come work in your network marketing team
Number of phone calls to qualified accounts
Number of speaking gigs booked (this is a big one for me)
Of course, you can also track vanity metrics such as podcast subscribers, social media followers, and newsletter opt-ins. And those are great numbers to know.
But ultimately your challenge is to figure out what actions you took to acquire those followers. And then keep doing those things!
And then of course you would need to track your effectiveness on all of these measures. For example:
A real estate agent visits 50 past clients and receives 1 referral. That’s a 1/50 effectiveness ratio and now she knows if she needs another deal she needs to go see 50 more past clients.
You sold 500 self-published books and got 2 clients. That’s a 2/50 (or 1/25) effectiveness ratio and now you know if you need 4 clients to close out the year profitably you need to sell 1,000 books.
You are the keynote speaker at a local business owner event with 50 participants. At this event, you sell 50 books. If you are the same person in the example above, now you know you need 20 more events with 50 participants to close out the year profitably.
See how this works?
It can make things so simple!
And I love clarity.
PGAs are the key to your success!
As a business owner, knowing and keeping track of your PGAs is how you strategize everything in your business.
So my homework for you today, is to go determine what your PGAs are! Once you’ve done that, hit REPLY and tell me what you’ve discovered. I really do love hearing from you.
Of course, knowing your PGAs is really only a portion of the battle. Now you’ve got to have a system that integrates them as the backbone of your view as CEO, but that is for a future Profit Boss® Weekly.
Need more help with your PGAs? Join our free four-day Masterclass on February 22nd-25th, 2022. Through live training and coaching, we will show you easy-to-implement and repeatable systems to finally take charge of your business and personal finances.
To your prosperity,
Hilary
