We’re halfway through the year! Welcome to Q3. How did Q2 treat you? Did you hit your targets? Reflecting and strategizing is crucial as we enter the second half of 2024. I’ve prompted every executive I coach to ponder a set of questions to sharpen their focus for the upcoming months:
- What are the top 5 most important things you must accomplish by year-end? Is your team aligned with these goals?
- Do you have the right people in the right seats to drive your business forward over the next 12-18 months? What personnel adjustments are necessary?
- As a CEO/Founder, what activities pull you away from growth-driving efforts? Who can you delegate these tasks to?
- What aspects of your business are overly complicated, and how can you simplify them?
- In what areas is your business significantly outperforming others? What activities are diverting your focus from these strengths?
For many leaders I work with, growth tops their priority list. But let’s clarify what that means. Driving top-line revenue is great, but if your expenses outpace your revenue, you’re growing broke. Focusing on your margins is critical—they should be as much a priority, if not more, than your top line.
The Power of Margins
Beyond helping cope with inflation or rising expenses, a healthy margin allows us to turn away problematic clients. It enables us to pivot from less fulfilling parts of our business to more profitable and satisfying ones. More importantly, it gives us the flexibility to prioritize personal and family time.
Early on, my brother, Greg, taught me that securing the margin we need as entrepreneurs comes from improving the “margins” in our business. This lesson was a game-changer for me. Being profitable is one thing; improving margins enhances profitability and is a critical focus.
I remember feeling hopeful for the first time in a long while when Greg guided me to focus on margins. That was a turning point I’ll never forget. Given Greg's expertise in turning around companies and his knack for improving gross margins, I couldn’t think of anyone better to join me in discussing this vital topic. Greg, whom many refer to as a magician in this area, shared some of his “Margin Magic” insights in my book, From Suck to Success, to help you too.
As we think about growth and setting our priorities for the remainder of 2024, here are some straightforward strategies to enhance your margins:
- Increase pricing by a small percentage
- Shift focus from large, lower-margin accounts to smaller, high-margin ones
- Switch suppliers to reduce costs on raw materials
- Find substitutes for costly raw materials, often discovering better and cheaper solutions
- Adjust staffing to cut labor costs
- Automate processes with systems and artificial intelligence to reduce dependency on labor
These strategies deserve a deep dive, and perhaps I’ll explore them in the future. For now, as you consider your priorities for the rest of 2024, ask yourself: how can you implement these micro-adjustments to boost your margins? How will you discipline yourself to track these adjustments and see the results of your efforts?
Keep focusing on what truly drives your business forward.
