The difference between first and second place in a yacht race is often less than 2 percent of the total elapsed time. The difference between winning an account or not is often that same slim margin. Experienced yacht racers are always looking for ways to get incrementally better; how to move from second place to first. You should be, too.
Let me give you an example: On December 26, 1982, 118 boats left Sydney, Australia’s harbor for the start of the 628-nautical mile Sydney-Hobart race. The fleet of ocean racers faced grueling conditions as they made their way down the coast of Australia and across the Bass Straits; battling for position the whole way. By the time Condor of Bermuda, the lead boat, crossed the finish line more than three days later, only 7 seconds separated her from Apollo, the second place finisher.
What could Apollo’s crew have done to make up for those 7 seconds and take the lead?
Sailing, like business, is a game of inches or seconds gained or lost over the course of a long race. You win by minimizing errors and capitalizing on opportunities better than your competitors.
It is important to keep your eyes open for opportunities to make big gains. The blockbuster idea that will instantly improve your business by 100 percent. It is also as important to look for many small gains— those inches and seconds that add up to make a big difference. Those 50 small or incremental gains that can each improve your business by two percent over time.
Even after more than 30 years of business experience, I’m still on the lookout for those little nuggets that offer the opportunity for big gains. It is not unusual for me to sit through an entire seminar or read an entire book and only pick-up one small idea. But that small idea, applied in just the right area, can generate a disproportionately large return.
How can you make this work for you?
While you try to find a way to double the number of leads you generate, also look for ways to make small increases in your lead conversion rate, average sales amount or sale frequency. Then watch how these incremental gains vastly improve your profit.
After modeling your product and customer profitability, you’ll find that raising your prices or lowering your overhead by as little as 2% will have a huge, positive impact on your bottom line. Improving your gross profit through product mix modifications can yield the same positive effects. Reducing your cost of goods sold by better purchasing or by increasing inventory turnover also yields improved profitability, as does increasing productivity or reducing waste.
A mere 2% improvement in certain key variables will have a huge impact on profitability in a very short time.
To continue with more sports metaphors, swinging for the fence offers both a potentially large reward and a potentially large risk. Why not make a series of base hits—take some smaller, safer steps—while you’re waiting for that perfect pitch to come along. You’ll have a better chance of winning the game.
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