Entrepreneurs typically progress through stages: first working “in” their business, then shifting to work “on” it by building systems and structures. But for Small and Medium-Sized Businesses (SMBs) aiming for peak performance and lasting value, there’s a crucial next evolution: working to maximize the business. This requires a new set of skills, a relentless focus on productivity, and often, a strategic approach to leveraging technology.

It’s a fascinating reward for success: the very skills that got you here often become less critical as you prepare for the next stage. Being an excellent craftsman is different from leading a crew, which is different from building the contracting business, which in turn differs from maximizing its overall productivity and market impact.

Productivity: The Key Metric for Maximization

Productivity offers a simple yet powerful lens for maximizing your business. The formula is straightforward:

Productivity = Total Output / Total Input

You can measure this in terms of investment (dollars out per dollar in), or by ratios more specific to your business (e.g., revenue per billable hour, units produced per machine hour). The key is to pick the right input and output metrics that truly reflect what matters for your SMB’s success. This productivity ratio then becomes a central focus for your leadership efforts.

Many hear “productivity” and think “cutting”, jobs, investments, etc., due to its common corporate usage. While reducing inputs is one path, it’s only half the equation. To truly maximize, you can:

1. Decrease INPUT (Optimize, Don’t Just Cut)
2. Increase OUTPUT (Strategically Grow Value)

Let’s explore these, considering how technology, guided by a fractional CIO, can be a powerful enabler.

1. Decrease INPUT (Through Smart Optimization, Not Just Cuts):

Instead of defaulting to cuts, think about optimizing work, processes, and inputs:

• Distribution: Analyze logistics. Can routes be optimized? Packaging be lightened? Shipments consolidated? Technology like route optimization software or inventory management systems can drive huge input efficiencies.
• Software Development: Can you buy, license, or leverage open-source components instead of building everything from scratch? Can agile or test-driven development reduce cycles? Are DevOps practices and environment management minimizing downtime and deployment friction? A fractional CIO can guide these build-vs-buy decisions and modern development practices.
• Manufacturing: Optimize raw material sourcing. Implement LEAN concepts. Measure and address process bottlenecks. Enterprise Resource Planning (ERP) systems and IoT-enabled shop floor analytics can provide crucial data for these optimizations.

Often, small changes in process, structure, or technological approach yield significant input savings, creating the capacity to scale as you focus on increasing outputs.

2. Increase OUTPUT (Focus on High-Value Markets, Customers, and Pricing):

Efficiencies gained on the input side are best leveraged when coupled with a strategic increase in valuable outputs. Focus on:

• Market: Analyze your current and adjacent markets (tools like Porter’s Five Forces or the Business Model Canvas can help). Are there underserved niches where your offerings, perhaps slightly adapted, could meet pent-up demand? Market intelligence platforms and data analytics can help identify these opportunities.
• Customers: Vigilantly understand and seek more of your most profitable customers. What makes them profitable? What do they value in your offering? Where can you find more like them? Conversely, consider “firing” consistently unprofitable customers. CRM systems and customer analytics are essential for this level of insight and targeted engagement.
• Pricing: Are you pricing based on the value you deliver, or just a cost-plus formula? Unique offerings that deliver significant client value can often command premium pricing. Don’t apologize for strong margins if your value justifies them. Understanding your differentiation, often enabled by unique technology or processes, supports value-based pricing.

Maximizing Your Business: A 3-Step Continuous Loop

To shift into “maximization” mode, adopt this iterative approach:

1. Decide on Your Key Productivity Ratio: Define the specific input and output measures that are most critical for your SMB’s success. Measure what truly matters so you can relentlessly pursue it.
2. Deeply Understand Your Inputs and Outputs: Go beyond just defining the metrics. Map the drivers, indirect sources, and interdependencies of your chosen inputs and outputs. Your IT systems should provide the data transparency needed for this deep understanding.
3. Execute, Measure, Learn, and Adapt (The Continuous Improvement Cycle): Drive changes to your inputs and outputs. Measure progress against your productivity ratio. Learn from the results (both successes and failures). Adapt your approach. This is a never-ending process of refining how you work, optimizing processes and structures, and deepening your understanding of customers and markets. Agile methodologies and a flexible IT architecture, guided by your fractional CIO, are key to making this loop effective.

What’s Next

The journey from starting a business to truly maximizing its potential requires evolving your focus and skills. It’s about moving from entrepreneurial hustle to strategic CEO leadership. Take the time to focus on what will really move the needle on your business’s productivity. Congratulations on your success so far… now, are you ready to maximize it and truly “Succeed Sooner”?

Is your SMB ready to shift its focus from just growth to maximizing its productivity and overall business value? Are you looking for a strategic partner to help you leverage technology and process optimization to achieve this next level of performance? Let’s connect with Succeed Sooner Consulting.