Ok To Be Rich Using Quickbooks - Volume 8 3 Tactical Errors
Tactical Error No. 2
Hi! This is KC Truby, Lonesome Cowboy! Now, I'm going to tell you tactical error number two that we make in business-we sell too much. I know that's hard to believe. Let me give you an example. I look at an accountancy website. The list of its services includes arbitration, arbitrage, evaluations, divorce reconciliation, income taxes, tax planning and pension plans. It goes on and on. That's sixty-five to seventy different specialties. Now, how can you specialize in seventy different things? You might think that's funny, but I tell you, I see it happens over and over in retailers everywhere else.
We get into business and we have one product plan. Then it becomes a kind of an add-on product. It seems to be a good idea when we slap it all in there. For instance, we go to a Mexican food market, and all of a sudden, you are selling piÃÂ±atas. You are selling Mexican decorations or some sort of Mexican music. The reason we know these is because we live in San Diego in all of these years and we see a lot of that down here. And what happens is the business owner gets too strung out on too many business ideas or projects. We don't focus on getting known into one particular item for one particular market.
Here's what I tell my accountants. Work in just five or six zip codes, instead of the whole United States. Only work for companies doing five to a hundred employees, and this is when they are selling outsourcing. And only be known for doing outsource bookkeeping. When we do these, here's what happens. We'll get known for that one solution. At any given time, three percent of people in the market have that one problem. When they hit that one problem, guess who they think about-Mr. Specialty.
I see this over and over in business. We make a tactical error of selling too many items, services, products and locations. We get ourselves strung out instead of just focusing on one or two things. We need to get out of this. Here's the answer and now we are going to do it. We are going to look at our QuickBooks. We are going to look at our accounting.
You remember when I told you about mistake number one, we make assumptions about our cash flow. We are optimistic about our cash flow, but these assumptions are incorrect. And I promised you that I'm going to give you some results on how to get out of these problems and here they are. Start paying attention to your accounting data. Every one of our inaccurate assumptions could have been figured out if we watched what's going on in accounting. We wouldn't have run out of cash if we were doing cash projections and watching how much money is coming in next week. It pays to be a little thoughtful about the money coming in.
Now, here is how we are going to get out of selling too much. We are going to look at our financial statement. We are going to look at it by profit and by product. And when we see our product and we are not making this money, we seriously better start asking, "how come I got that?" Then, we get employees to support the product and salesmen to make a call about the product. We pay insurance to cover the product and buy floor spaces, buildings and advertising. Yet, the product is not making money. We can get out of these problems if we were looking at our financial statements and figuring out what we do that is not making sense.
Isn't it funny that we are right back to mistake number one-assumptions that are in error? It all comes back to that.