Creating a personal revenue strategy

The Board Member called Ambition

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In my past life, I was the sales operations manager at a towerco. The job was both tasking and rewarding, and I gained insights into how a company operated. Before taking this role, when strategies, targets, or business objectives were announced, I never quite understood the thought behind them. It was always just because management said so, it used to be so annoying when I felt management did not understand what was happening on the front lines, and they just sat down on their high horses and decided what was best without inputs from the people that got the job done.

In this role, I gained entry into conversations that became strategies, strategies that became business objectives, and business objectives that became outcomes. Having these insights changed my outlook on life as it challenged everything that I had known heretofore. Business leaders were not just considering the information coming from the frontline, they were considering economic impacts, Bloomberg oil prices, technology, pressures from investors, compete information, business plans, customer insight, supply chain, cost of doing business, and a mirage of other factors to determine business outlooks.

The most challenging part of my job was budget season when I forecast revenue for the next fiscal year. When you are asked to look forward and project, the most intelligent thing to do is to first look back, consider past trends, evaluate carryover business deliverables, and then project new business opportunities. Analyzing trends was tedious, but forecasting new opportunities was hard. After multiple brainstorming sessions, we arrive at a sales strategy and the projected revenue. The projected revenue will become a noose around the sales team’s neck in the coming year.

The projected revenue is the first item on any company’s financial forecast, and everything else trickles from it. Once a preliminary projected revenue is set, the technical, supply chain, HR, and operations teams must go and figure out how to make that number happen. The question then becomes: if we are going to meet this revenue, what will it cost in terms of raw materials, labor, and overhead? Every department funnels in their strategies, and the annual budget is presented to the board. Waiting for board approval was always nerve-racking because I never know what the outcome will be or do I.  Out of all the forecasts that I have seen go for approval, at least 80% of the time, the board will revert with something like the following statement;

This forecasts a single-digit year-on-year growth, adjust strategy to meet a double-digit growth.  

I will be enraged and ask questions like, do they know how much work was put into forecasting realistically? Are we expected to make up numbers? Because this was already a stretch target. Blah blah blah, the complaint goes on for a while, and then we settle down and try to figure out how to meet this big hairy audacious goal (BHAG). Once we begin to strategize, the departments itemize needs required to accomplish the BHAG, you will hear things like, well if I am expected to meet this number, I am going to need… The board knew we may not have all we needed to meet the requested target, and they mostly were willing to give support. So they would approve extra headcount, increase departmental budgets and training etc.

You see, the board was being ambitious, and they knew what our capacity was NOW, but they pushed and asked how we can do more? So how can I do more, how can YOU do more?

When I think about ambition, I think about it this way; here is where I am today, and following my current trajectory, I should reach my goal in 5 – 10 years. But what if I change course, what if I require more of myself, what if I went back to school, or learnt a new skill, what if I spend less and invest more or start that side hustle, what if I changed jobs or geographical locations, will that accelerate my progress to my goal, or redefine my goal altogether. If I decide to do any of these things, what would it require of me? and am I willing to pay the price

As we think about increasing net income, which increases equity and asset, we must drill down on the factors that affect NI, one of which is revenue. How can you increase revenue, and what will it cost? Whatever strategy you devise, I can tell you with all certainty that it will be uncomfortable. Growth requires that you leave your place of comfort. If it were easy, everyone will be rich and accomplished, but it is not easy. All I ask is that you ask yourself what if, permit yourself to dream and then take Nike’s advice and JUST DO IT!

To summarize,

Ambition is the cornerstone of any revenue strategy, and the same is true for personal revenue. Increasing net income means increasing revenue or decreasing expenses. While I will discuss expense reduction in a subsequent post, financial minds have insinuated cost-cutting to be a short-term profit optimization strategy. For long-term growth, you will have to hone your revenue strategy and be willing to pay the price to actualize your BHAG.

Don’t miss my next post on expense optimization. Hit the follow button down below.

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