Trizle

How to Determine What to Sell

2009-06-04T10:00:05Z

You've been selling Products A, B, C, D, E for 8 quarters.

You calculate your profit margins for each product for those 8 quarters:

Product A: 32%
Product B: 5%
Product C: 38%
Product D: -12%
Product E: 24%

What do you continue selling?

Quickly, your bad-self realizes:

"Hey! We're losing money selling Product D!"

So, you quickly and correctly eliminate Product D from your list of offerings.

What about those other 4 products that are profitable?

First, understand the meaning behind profit margins -- something seemingly easy to understand but seldom used as a strategic tool.

It's a reason why when you walk into the typical small business store, you're confronted with 99868075699569965 product/service/menu options.

What do profit margins tell you?

Profit margins tell you this:

For every $1 I spend, I make X.

For instance, in the above example, you make 32 cents for every $1 you invest into Product A.

Now, unless you're Master of Disaster, you want to invest into products that give you the highest return on your investment.

If you pour $1 into Product B, you make only $0.05.

Peep that comparison on a grander scale with a $2MM investment into each product:

Product A will net you: $640,000
Product B: $100,000

The simple moral? Invest more into those that give you the highest returns -- and more importantly, eliminate the dead weights so you can invest more into the biggest profit earners.

But wait! There's more!

You might go off and tempt yourself:

"Hey! Product C gives us the highest returns! Let's invest everything into Product C!"

While small businesses that focus on selling anything and everything make chump change, and those that focus solely on one single high-earning product make good dough, the latter business type sets itself on a much riskier path.

Why?

Lehman Brothers, Bear Sterns, Washington Mutual.

Credit crisis.

What happened? Those banks hedged their bets on what they saw as their single biggest earner: mortgage-backed securities.

When the motherfreak hit the fan as borrower-after-borrower defaulted on their loans, KABAMBAZOOKA: those banks died.

The key? Yes, invest heavily into your highest earner; but realize that market conditions can change rapidly, rendering your cash cow a coked-up ostrich that hawks Tupperware parties thinking HETHEMAN - but-he-ain't-no-man, he-a-coked-up-ostrich-selling-Tupperware.

So, you need a product line filled with strong backups -- such that if market conditions hit your top-selling offering hard, your business will still soar without a hitch.

(For instance, in the above scenario, you'd keep Products A, C, and E. If you're feeling a little riskier, you might go with A and C.)

The ToDo

Rank your products by their profit margins.
Hedge your bets on the premise that if your top-earnering product fails next month, your company will be a-ok with the other top earners.
Eliminate the low earners (or sell the product biz division) and the sucky-suck $ drainers.
Continually experiment with other new offerings to see if you can displace your top-earning products.

WIN

Pitch The Company's Dream Team

How to Fight Your Optimism Bias

2009-06-02T12:38:37Z

"I will complete these tasks by 5pm."
"I will grow this company into $10MM in three years."
"I will complete 5 projects entirely by this Friday."
"I will be more productive today than I was yesterday."

When deadlines arrive, you're barely 10% into accomplishing your original goals.

You do this often.

You set goals.
You fail to meet them.
Repeat vicious cycle.

"I suck," you tell yourself.

But you don't suck; you're human.

HOORAY! HIGH FIVE!

Why do you often fail at your goals?

Humans have a tendency to be overly optimistic about their abilities and their futures.

Take Bob.

"I will use credit cards to buy X!"
"I will make so much more money to pay these off!"
"YAY!"

Bob soon drowns in debt.

Bob's not the only overly-confident person.

80% of drivers believe they're above-average drivers
94% of professors believe they do above-average work
99% of students believe they're above-average in getting along well with others
The majority of Americans believe they'll be above-average income earners in the future
The majority of corporate CEOs believe their companies will thrive more than their average industry-counterpart.

We human peeps believe in ridiculous fantasies -- a sense that everything will go according to our idealistic plans; when we come short of our expectations, we cry.

How do you do you combat optimism bias?

This cheese:

Shoot for the moon; even if you miss, you'll land among the stars.

That is:

Choose a desirable goal - something you would like to accomplish.
Choose a goal that's much more crazy-ridiculous.
Aim for the crazy-ridculous one.

Even if you miss, you'll have a much higher chance of accomplishing your original goal.

For instance, say you're shooting to build a solid $5MM business in 5 years.

Now, set a ridiculous goal (e.g., $25MM in 5 years).
Shoot for that ridiculous goal.Result: You set yourself with much higher chances to achieve the goal you originally set.

Setting a more ridiculous goal than what's desirable helps you fight against the common human tendency to be overly optimistic about your abilities/future.

WIN.

Shoot for the moon's mother.

Why Reset Your Goals When You Suck

2009-06-01T08:45:19Z

You're shooting to accomplish Goal X in two days.
Two days come, and you haven't accomplished Goal X. FAIL.

What happens?

Subconsciously, without any concrete goal set, you start working slower trying to accomplish Goal X.
A week passes you by.
Two weeks.

You finally finish.

What you had hoped to accomplish in two days turns into two weeks.

Freakish time wasted.

Massive opportunities to accomplish more things = down the tubes.

Why Humans Suck With Goals

Billy Bob Krishnaramanan sets a goal.
He fails at his goal.
He keeps working on his old goal.
MOTHERFREAKISH TIME WASTED.
He finishes his goal.

Peep:

When you set concrete goals, you subconsciously drive yourself to complete Goal X by Date Y with maximum effort.
When you have no due date for a goal, you aimlessly plow through your days hoping to accomplish something-anything-I'll-complete-it-sometime.

Setting no concrete due date to accomplish that old goal makes you expend freakishly more time on the %#@%#@ than necessary (e.g., a goal that should've taken two days turns into weeks because you've set no new target date).

Try this:

Set a goal. ("I will accomplish X by Y date.")
When the date comes, set a new goal with a new due date (with the original goal included if you haven't finished it).
Repeat.

You'll see yourself accomplishing things quicker, as you become more efficient with your time.

E-zay.

Renewdemgoals.

Why Ask for Business Directions

2009-05-26T09:09:28Z

You need Unfamiliar Item XYZ.
You go to a store.

You have two options:

Walk around and look for the unfamiliar item.
Ask a store worker for the item's location.

What do you do?

Macho Manchild thinks he's The Macheezmo.

"I'll find the $#@$ item," he says.
"I don't need help thank you very much!" he screams.
"I will find the mother $@#!$ with EASE!"

He walks around:

familiarizing himself with the store's layout
testing and experimenting different aisles
frustratingly goes back and forth until he slowly pins down the item

He finds Unfamiliar Item XYZ 20 minutes later.

Take Sally Susie

Contrast Macho Manchild Macheezmo with Sally Susie.

Sally Susie walks into the store.
"Excuse me," she asks Store Clerk Chloe. "Where can I find XYZ?"
Clerk Chloe leads Sally Susie to the item.

Sally Susie finds the item in 2 minutes.

Done.

WIN.

Ask In Business

You'll venture into 978590487549980634 unfamiliar territories with your business/company/position/etc.

Trying to do everything yourself amplifies the amount of time it takes to do unaccustomed business stuff.
Asking somebody who's familiar with where you're trying to go? You ridiculously shorten the time to XYZ.

Macho Manchild Macheezmo took 18 more minutes than Sally Susie on one simple task.

You multiply that by 978590487549980634 number of tasks that you'll tackle = DANG SON.

Attempting to:

Hire your first employee?
Grow a million-dollar business?
Build an enterprise system for your company?
Rebrand your corporation?
Increase quarterly net profits 10 straight times?
Drastically turn around your debt-to-equity ratio?

Ask somebody who's been there.

They'll be able to steer you toward the right direction, while keeping you away from cliffs and edges that could annihilate you.

Result: faster and safer.

Ask who?

Get referrals.
Seek consultants.
Search message boards.
Attend networking events.
SCORE.org.
Cold contacts.
The Yaddas.

Shorten the amount of time to get to XYZ like a mother !@$!@#@!.

WIN.

Ask.

How to Develop Good Employees

2009-05-21T09:45:33Z

King Kong CEO:

rips his employees for mistakes
confines them to roles within strict boundaries
treats them like cost items on a balance sheet

What results?

scared employees
uncreative employees
unproductive employees

King Kong CEO creates a political culture where employees hate the environment, the work, and the CEO.

It's the typical horribly-$#@-managed company.

Business Management = Not Hard

Managing a business is like being a good parent.

That's it.

A kid grows up in an environment where:

wins are cherished
challenges are big but beatable
and mistakes are quickly forgotten

That kid becomes more self-assertive and becomes more confident in his/her abilities.

Likewise, employees who grow in a nurturing environment:

take more initiative
take more risks
produce more output

The nurturing environment:

values every contribution
understands precisely their members' goals and weaknesses
knows what motivates each team member to excel
makes every one of their employees self-sufficient to do what's necessary

Employee Eddie starts getting into the productively-good habits -- as his company builds a nurturing environment where he and his fellow team members can succeed and thrive.

Innovative companies involve every single one of their team members continuously innovating every aspect of the company -- from hiring new team members to acting on customer feedback to building new products.

Cultivate a ridiculously nurturing environment to help your company's team members take initiative, innovate, and improve your company by X multiple.

Parenting skillz.

Nurture.

What Counts

2009-05-18T09:14:39Z

A reporter once asked Mohammed Ali how many sit-ups could he do. His reply?

"I don’t count my sit-ups. I only start counting when it starts hurting. When I feel pain, that’s when I start counting, because that’s when it really counts."

Pain drives you to get better at X.

Kobe Bryant didn't spend his childhood playing against other 12-year-olds; he forced himself to play against his father's professional teammates.

Gaining proficiency at something is like building freakish muscles:

The more you stress yourself, the stronger you become at it.

Likewise, the less you stress yourself, the weaker you become at it.

Seek pain.

Where to Place Your Most Profitable Products

2009-05-05T18:16:33Z

Store A puts their freakishly profitable products in little boxes that they show only to select customers.
Store B throws a big-frickin sign that showcases their most profitable products that captures everyone's attention when they enter.

Who wins?

Think about this:

No matter what little pseudo-expert tells you, marketing is a numbers game.
The more exposure you give Product X, the likelier you'll sell Product X.
Even if a product averages a conversion rate of 0.01%, that product will double its sales if it reaches twice as many prospects.

That means this mofosokofroko:

The more you people you show your most profitable products, the more profits your company will generate.

KABAM.

It's a reason why you see bookstores displaying its bestsellers right in front of you when you walk into them.
It's a reason why Google places its best converted ads on top for more exposure.
It's a reason why you see one very &%$# specific vendor when you walk into a stadium.

The more exposure you give a product, the more that product will sell.

The more exposure you give your most profitable products, the fatter you'll grow your company's bottom line.

If you run a store, place humongous signs/displays/yaddas that showcases your most profitable products.
If you run a service business, let the prospect know about your most profitable offerings upfront.
If you run an ecommerce website, place humongous signages on the top-fold of your homepage that showcases your best-performing items.
Yadda.

How do you know your most profitable offerings?

One item can generate a $50 profit, but converts only 1% (i.e., $50 profit for every 100 customers).
Another item can generate only a $10 profit, but converts 10% of your prospects (i.e., $100 profit for every 100 customers).

How do you find out those figures?

Test, test, test, test, test.

Experiment with a sample size.
Determine winner.
Show off winner.

Sample sizes can be as small as 30 to as high as 1000 -- depending on your allowable room for error (and also your business type).

When in doubt, consult a statistical expert/consultant/professor about what sample size you should target with your particular operation.

You'll discover the products with the highest probability to generate the most profits for your company.

And then the crazyridiculouscabbagepatchausageeggmcfuffintothemofo easy part:

Expose them to as many people as %$#@%#@ possible.

WIN.

Front.

Why Athletes Get Into The Zone and Why You Suck

2009-05-04T10:01:58Z

Lebron, Nadal, Crosby:

To win the game.
...in 4-quarters/3-sets/3-periods.
...against X opponent.

One clear goal -- with a time limit.

Chances are:

You have tons of goals.
You're trying to tackle 5/10/20/30 goals at this minute.
You never know if you performed well (i.e., you won or loss).
You have goals you want to "accomplish today, but if I can't accomplish them today, I can accomplish them tomorrow. YAY! HUG ME!"

Performing at your peak takes getting into the zone -- with one distinct, clear, freak-tastic goal that lets you know:

"If I don't acomplish X in Y minutes/hours/periods, I lose."
"If I accomplish X in Y minutes/hours/periods, I win."

Psychologically giving yourself a win/lose scenario gets you performing.

The losses also give you feedback on what you can do to win in subsequent scenarios.

How to Get Into a Zone

Here's what you can do:

Choose something you want to beat the mother %#$% down in the next 5 minutes.
Set a timer.
Go.

You = in the zone.

Use the above model to tackle other stuff/goals/tasks/projects.

Keep track of your win/loss records; make it a game.

See yourself performing ridiculously much more, as your more productive boot-ay gets stuff %$#@%$#@ DONE.

Win.

Freaktastically clear goals.

Why You Suck at Business Success

2009-04-27T22:03:19Z

You're somewhat succeeding at X.
But the "somewhat" makes you unhappy.
So, you switch to Y.

Then when you're slightly finding some success with Y, you switch over to Z -- thinking:

"That's where I'll find SUPER success!"

But you don't, because you suck.

You go through the continuous cycle of succeeding-being-disappointed-start-over-yadda-yadda.

You = cow.

Tiger Woods?

Tiger Woods started out sucking.

So, did Michael Jordan.

So, did the most successful business/CEO/entrepreneur/sales-star/competitor you secretly envy.

When you start out doing X, you will suck at X.
The longer you stick with X, the freakishly better you'll be at X because you find new and better ways to be successful.

Take Bob.

Bob sucks at his graphic design business.

His clients are 1-employee shops who pay him a whopping $6.50 per hour.
"It's okay," Bob tells himself. "Someday, I will build a million-dollar business."

So Bob, continues helping his clients -- doing whatever he can to stay afloat.

Good news comes one day when he gets a call from Senorita Amiga Ti Tatta.
Senorita Amiga Ti Tatta runs a 5-employee a bakery in Chinatown because she is French.
She needs designs for her shop and menus.

Bob does ridiculously impressive work for her.

His business gradually grows.

As he's running his business, he reads a case study about Dan The Design Man.

He learns that Dan The Design Man grew his freakish business by knocking on doors of mid-sized candy factories.
"Eureka!" Bob says. "I too will knock on similar doors in my area!"

He starts growing his business even more.

THEN BAMBOOOMBASHOOKA.

A large company -- referred by one of his happ-eriffic clients -- invites him to bid on its $50K project.

BOOSHKA.

BOOSHKA.

BOOSHKA.

He wins.

...then wins more contracts.

...then wins even more.

AND THEN FLASHMESOMEKITTENS:

He builds a multi-million dollar graphic design business.

...because he stuck with it.

Stick with it.

How to Fight Fatigue

2009-04-24T09:59:58Z

You're tired.
You were tired yesterday.
You were tired last week.
You were tired last month.
You were tired last year.

It seems like yo-bad-self has been tired throughout your ridiculous life.

"HOW DO I STOP BEING TIRED %$#@^$?!"

Fatigue normally signals:

You = dehydrated.

Your heart has to fight harder to supply your body with sufficient oxygen and nutrients.

That is, you're needlessly destroying your energy reserves because you're not drinking (water).
Your heart expends freakish energy trying to make up for your laziness in cleansing your body.

BOO.

Take Bob.

Bob is tired.
Bob drinks more water.
Bob saves his energy reserves to spend in more meaningful ways -- like rocking his biz-niz.
At the first sign of fatigue, he knows he's sucking at his water-living-ways.
So, he drinks more water.

And, gets more energized. His productivity exponentially goes up.

Stop being tired.

Pump yourself up to be more productive.

Trizle

How to Determine What to Sell

What do profit margins tell you?

But wait! There's more!

Why?

Pitch The Company's Dream Team

How to Fight Your Optimism Bias

Why do you often fail at your goals?

How do you do you combat optimism bias?

Shoot for the moon's mother.

Why Reset Your Goals When You Suck

Why Humans Suck With Goals

Renewdemgoals.

Why Ask for Business Directions

What do you do?

Take Sally Susie

Ask In Business

Ask who?

Ask.

How to Develop Good Employees

Business Management = Not Hard

Nurture.

What Counts

Seek pain.

Where to Place Your Most Profitable Products

How do you know your most profitable offerings?

How do you find out those figures?

Front.

Why Athletes Get Into The Zone and Why You Suck

How to Get Into a Zone

Freaktastically clear goals.

Why You Suck at Business Success

Tiger Woods?

Take Bob.

AND THEN FLASHMESOMEKITTENS:

Stick with it.

How to Fight Fatigue

"HOW DO I STOP BEING TIRED %$#@^$?!"

Take Bob.

Hydrate Yo Bad Self.