PayFast has launched its annual Black Friday and Cyber Monday live spending tracker, with the dashboard showing that someone has already spent over R100…
Starting a business will pull you in dozens of directions at once. Exterior forces will demand your attention’ from the employees you have working under you to the partners, investors, and mentors who pressure you to make certain decisions. To make matters worse, most entrepreneurs have “shiny object syndrome,” jumping from new idea to new idea while occasionally neglecting work on some of the most important fundamentals.
There’s a serious chance you’re jeopardising the future of your company if you’re neglecting revenue as your bottom line. Fortunately, this is your chance to correct your habits.
Why revenue is so important
It should be obvious why revenue is important: it’s what brings money into your business, and no matter how noble your goals are or what personal reasons you have for being an entrepreneur, you’ll still need to make money if you want to survive. All the other visions you have for your business can’t exist unless you have the income to fund them.
Now, let’s look at how an unfortunate majority of startup entrepreneurs end up losing sight of their bottom-line revenue:
1. Failing to make revenue a top priority
As an entrepreneur, you only have so much time in the day. You can work on menial tasks, long-term idea generation, client interactions, process optimisation, or any number of other potential applications. But if you’re going to help your business succeed, you need to spend as much of your time as possible on activities that actively bring more revenue into your business. According to Infer, if you aren’t making revenue your top priority, you’re doing something wrong.
2. Relying too much on cash cushions
Most startups have an influx of capital to keep them running, whether that’s an angel investment or simply a line of credit with the bank. New entrepreneurs often see this as liquid spending money, and organise their budgets accordingly, not thinking about what work that spent money is actually doing for the business. Every dollar you spend should be geared toward getting more business and more revenue.
3. Spending too much on unfamiliar strategies
There are many different potential revenue models for your business, but you need to pick at least one and stick with it. You can’t constantly change how you’re going to generate revenue, nor can you chase after gimmicky marketing strategies without doing your due diligence. Invest only in the strategies you know have a high likelihood of offering a return.
4. Trusting your instincts instead of objective data
As an entrepreneur, you probably like the idea that your instincts are valuable, but you can’t trust your instincts when they conflict with objective data. Revenue is a bottom-line dollar amount, and you need a certain amount of it to keep your business running. The more logical and mathematical you can be in your decision-making, the better.
5. Neglecting to use an adequate analytics platform
There are hundreds of business analytics platforms available, but you need something to help you track how much money you’re spending and what kind of return you’re seeing. Only when the data is in front of you will you be able to see how your money is working for you.
6. Thinking too far in the long-term
It’s a good idea to think ahead, but focusing too far in the future can leave you with a cash shortage. For example, if your business is investing in products, equipment, and infrastructure that’s only going to start being effective in 2020, none of it is going to matter if your company goes bankrupt by 2018. Instead of investing completely in those long-term plans’ reserve part of your investment for more short-term solutions that can keep you afloat.
Now that you’ve gotten some insight into dangerous means of neglecting your revenue, you can shift your priorities to put revenue at the top. Of course, this doesn’t mean you can only focus on profitability (doing so may compromise your brand reputation), but every decision you make should at least peripherally consider the effects this will have on your income stream.
Flickr: Ken Teegardin via Flickr.