Day 58: Focus On Your REVENUE!
Tom Suddes | March 16, 2010
B2A FOR IMPACT TRAINING
I saw this chart in Chronicle of Philanthropy (USA).
Responding to the Recession:
Actions Charities TookReduced Spending: 87%
Examined programs for consolidation or elimination: 58%
Reduced personnel: 54%
Delayed capital projects: 49%
Postponed IT expenditures: 35%
Implemented other benefit reductions/increase in co-pays: 7%
Reduced salaries: 24%
Increased liquidity: 23%
Secured/drew down on lines of credit: 19%
Reduced or eliminated contributions to 403(b) and 401(k) plans: 15%
Outsourced to reduce costs: 12%
Reduced level of alternative investments: 11%
Eliminated spending of underwater endowments: 10%
Established furloughs: 10%*Note: Nonprofit leaders were able to select more than one answer.
Source: Grant Thornton
Reduce spending. Consolidate or eliminate. Reduce personnel. Reduce salaries. Reduce this. Reduce that.
There was ‘ONE ACTION’ that these “CHARITIES” did not take:
INCREASE REVENUE!!!
‘RE-DUCE’… OR RE-THINK, RE-DESIGN, RE-ALLOCATE, RE-IMAGINE, RE-ANY OTHER WORD… how to INCREASE your RE-VENUE.
This metaphor might be helpful:
| NUMERATOR DENOMINATOR |
= A ‘NUMBER’ |
In order to make your ‘NUMBER’ BIGGER… you can either:
- INCREASE THE NUMERATOR, or
- DECREASE THE DENOMINATOR
The obvious, preferred response of most ‘charities’ is REDUCE, REDUCE, REDUCE… DECREASE THE DENOMINATOR.
The again obvious problem with this thinking is that you end up significantly REDUCING your IMPACT!!!
*This reminds me of the story about John DeLorean when he was working with General Motors, an automobile company in the U.S.
All the ‘bean counters’ talked about how much money they’d save if they closed certain factories/plants.
DeLorean purportedly screamed, “LET’S JUST CLOSE ALL THE BLANKING PLANTS. THEN WE’D SAVE A TON OF MONEY.” (Of course, you wouldn’t produce any cars!)
Instead of closing stuff, canceling performances, reducing the scope of your impact…think like an entrepreneur!!!
If you are an ENTREPRENEUR or think like an ENTREPRENEUR … you know the real ANSWER is to:
- INCREASE THE NUMERATOR
- INCREASE YOUR REVENUE
- INCREASE ‘SALES’
Special Note: I’m actually okay with eliminating redundant positions, reducing ‘middle management’, re-thinking why, how and where you spend your money…
As long as you INCREASE your SALES TEAM, your SALES PERFORMANCE and your SALES RESULTS.
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