Every entrepreneur and business owner I run into has a yearning to do something deep with their business. Whether it’s forming strategic partnerships, creating new divisions of their business, or rolling something new out, the desire is there to do more.
But the thing that holds them back is the immediate needs of their business. In other words, that stuff that they think deserves priority within the coming 24 to 48 hours. Those immediate things get in the way— new customers, sales, business development, putting out fires.
There are consequences to prioritizing those immediate needs though, and it comes as a slow fade as we continue to give our energy to the things that aren’t in alignment with our business’s core vision.
Your mind simply cannot live in the now for the sake of survival. You have to think beyond the immediate or you may not have a business in a year.
Your business cannot be sustained on product or service deliverables alone
Many business owners strategize their growth around immediate profit centers. And on the surface level, that makes some sense. You want to make more money by capitalizing on what is already working in your business.
That is, namely, your products or services.
“But look— if you focus solely on getting more customers or clients, making more sales, that’s all you’re ever going to be doing. It’s going to you constantly trying to sustain your business on what you have now.”
Customers and clients will come and go, they cannot be relied upon as means to scale your business. The return on your investment in deliverables is not sustainable in the long term. They are not the singular foundation for growth in your business.
You cannot deviate from your vision and the plan you have for your business just because you hit a tight spot or else you won’t have a sustainable ROI. Constantly set yourself up where you’re working on things that are going to grow your business.
That’s why you have to look beyond your deliverables and think long term. How can you create sustainable profit beyond the products or services you offer?
Creating multiple silos of profit
The key to overcoming this endless cycle of solely profiting from the immediate deliverables is to create other sources of profit. This means loosening your grip on hyper-focused optimization of sales and looking far ahead.
Yes, this consideration of the long term means putting your time and energy into profit that is not certain.
But unless you open your business up to profit opportunities that can only be attained by investing in the long term, the future of your business is not good.
Think of your business as a pie. Your product and service delivery is only a slice of the pie. That may come as difficult news if you are currently pouring all your time and energy into that one slice and the rest of the pie is going untouched.
The first step in overcoming that narrow focus on the one slice of pie is to identify other silos or profit centers in your business.
Not sure where to start? Here’s a breakdown of the other slices in your profit pie:
- Strategic partnerships
- B2B commerce if you’re a B2C business, and B2C commerce if you’re a B2B business
- People and things that can sell for you: brand advocates, your content, networks, etc.
Identifying each of these silos, or slices, and what they would look like in your business is key in beginning to dispel some of that uncertainty about the future of business.
Map out the process within each silo
After you’ve identified these silos as they apply to your business, it’s time to take a deeper look into each of these silos.
Keep in mind that the sales process for each of these silos will not be like the sales process for your products or services. Why? Because the ROI in these silos is achieved over a longer period of time. It’s a long term investment.
This takes patience, diligent planning, and an acceptance that the profit will not come immediately.
Take Gary Vaynerchuk for example. He didn’t just wake up and create Vayner Sports one day. He looked at the class of upcoming athletes in schools and made a conscious effort to develop relationships with them so that when they graduated he had a base to launch Vayner Sports. That took time and patience.
What makes companies huge are the things they do outside of their immediate delivery of their product or service. It’s that longevity, thinking years ahead, that makes them huge.
So mapping out the objectives of each of these silos and understanding how many touch points it will take to accomplish those objectives is what it’s going to take to tactically approach those longer term investments.
Consider that it may take a lot longer to land a strategic partnership than a new customer, but that partnership could yield 10 to 50 times the ROI than that new customer.
Once you’ve mapped out the process, you have to prioritize accordingly. You only have so much energy and time to give.
So if you’re going to exert a lot of energy, wouldn’t you prefer to do it over a longer period of time for a greater ROI?
So stop spending 80 to 90% of your time in the silo of product and service delivery. The energy you’re putting into that short term silo is yielding far less ROI in the long term.
On top of your silos, create value-based investments
After you’ve identified your other silos and mapped out the processes for each, it’s time to add the next layer: value-based investments.
What are value-based investments? This is stuff you can’t see as ROI, but it could be the biggest move you ever make as a business, such as investing above and beyond in a relationship or education in your own skills.
Value-based investments may not have ROI today, but they could in the future.
It’s the same concept as going into higher education. If people are willing to go $100k into debt to get higher education all for the sake of getting an unguaranteed higher quality job, why should we think any different as business owners?
A great example of a value-based investment I made is in The Modern Marketer itself. I didn’t know that this publication would be as big as it is now, but I decided to invest my energy into it anyway. If you added up all the money and every hour I put into it, it would be at least $50k.
Now The Modern Marketer is everything for us. It’s the only thing that separates us as an agency from anyone else in our industry.
So on top of creating those silos, always have three to five things that you’re putting time and energy into as a value-based investment. Keep that higher perspective in mind, or else you’ll always be relying on income from cash flow.
Have some uncertainty? Think about the “Best Case Scenario”
Every company that’s had a massive payout has made value-based investments. For these greater things to work out, you have to plan for them to work. You have to slowly chisel away at value-based investments.
The way we measure the ROI of value-based investments is a benchmark technique called best case scenario.
For example, if you were going to not listen to anything I’m saying here (which is fine), what’s the best thing that could happen? You get 10 more clients? You make 30 more sales? That’s your benchmark.
But if you take a day to plan ahead and consider the best case scenarios for the payoff of your value-based investments, you’ll realize you need that and the other silos. You can’t rely on product or service delivery and expect growth over the next 12 to 24 months.
If I told you that you wouldn’t make money for the next year and a half, but on December 15, 2018 you would make $1 million, wouldn’t you drop everything to make the investments necessary for that to happen?
You would certainly re-prioritize.
Of course, you’ll never actually reach that best case scenario. You’ll never have the best of everything. But if you take the time to carefully consider these scenarios, you realize that longer term investments have a far better ROI than the short term ones.
I went through this process of realizing three to six months of my energy had been dedicated to things that were not for the sake of bigger growth for the company. ROI is not about volume of product or service sales, it’s about silos and value-based investments.
We have to be more practical with the prioritization of our energy.
Longevity of your business must always come before immediate needs
You have to prioritize longevity over your immediate needs. It’s not a recommendation, it’s a requirement.
Statistically, a year from now, more than half of you will not have your business.
Think about that.
The only way we can prevent ourselves from becoming that statistic is by strategically planning into the future.
True ROI in business comes from those other silos, by seeing the whole pie and not just the product and service delivery piece. That and your value-based investments are the keys to not only sustaining your business over time, but growing your business.
Identify those silos, map out their processes, and create some value-based investments. If you prioritize your business in the long term, the immediate needs will be taken care of as a result.
Don’t let your business fade away because you were too focused on the short term. Prioritize longevity.