Small Business Digital CoachGROW REVENUES BY 25 TO 100% OR MORE IN 90 DAYS OR LESS while reducing advertising cost and effort

Yesterday, I was a panelist at a forum meeting that explored the spiritual and emotional needs and hurts of the women present. It was a women-only group, and I was one of only 2 men present. We (the guys) had been specifically invited to answer some questions from a man’s perspective (How would you like to try answering for over 3 billion people?).

It was a tremendously thought-provoking experience and one that I’d gladly take part in If I’m ever asked to do so again. One of the things that struck me during that talk show-style forum was the fact that wise counsel is almost always within a short phone call away, and yet, most of the time, we hesitate to ask for help from those we know are in the best position to provide it.

For me, I have formed a habit of cultivating a network of “gray haired” friends around me. These are seasoned and experienced people I can count on when I’m facing a quandary. People who by reason of age and experience, aren’t afraid to ask the tough questions or tell you when you’ve been an idiot.

One of the most persistent challenges faced by small business owners who struggle is a lack of trusted and qualified mentors. And it’s a problem that easily solved once you make a decision to seek these people out and act quickly on the advice you get.

One of the most important resources for business success that is available in virtually every market is SCORE – Service Core of Retired Executives.

SCORE is an organization made up of mostly retired or semi-retired executives who volunteer their time and expertise to help business owners grow their business. If you haven’t tapped into a SCORE office near you, I advice you to do so.

It is effectively a principle of productivity, of prioritization, and business success.

So what’s the “Precious Pearl Principle”?

In Matthew 13:45-46 of the Christian Bible, Jesus tells a parable about a “pearl of great price” for which a merchant sold all that he had.

It was a parable meant to teach “priority management” in a spiritual context. The precious pearl principle is a productivity framework based on the metaphor of the “pearl of great price”.

In modern life and business, I often find that the greatest strategic challenge faced by entrepreneurs and CEOs is priority management. Priority management, in my definition, refers to that component of planning that determines the single most important element of a complex system, or the single most important destination for the investment and allocation of resources.

Such resources include but are not limited to:

1. Your Time
2. Your Financial resources (personal or business)
3. Your Attention (business or personal)
4. Your Effort (corporate or personal strategic priorities)
5. Your Staff (Using staff for highest leverage activities)

A billion dollar cottage industry has developed around time management and planning that would probably be more effective for people if they understood that the actual issue is “decision priority management”.

Asking these 3 questions can help you become a better, more systematic, priority-focused manager:

1. What’s the most important decision you need to make today?
2. What’s the most important action you need to take today?
3. What’s the highest yield, highest leverage function you have as an entrepreneur, manager, or CEO?

It is this underlying “priority logic” that makes goal-setting so important to the success of individuals and companies. To paraphrase Dr. Eli Goldratt, goals give a business a “decision procedure”. A way to decide whether to worry less about X than about Y.

For instance, as a business growth consultant, I emphasize marketing mastery as the highest return growth lever for any businesses I work with. I find that many small businesses delegate away far too many marketing decisions and skill sets. Creating a marketing system that you can optimize with each passing day is absolutely necessary to building true asset wealth in your small business.

The most common aptitude possessed by successful entrepreneurs and CEOs is consistently knowing how to set the right priorities and make the right resource allocation decisions. This simple skill is why the CEO gets paid the big bucks while a hard-working but misguided front line worker gets to sit and gripe about how much the CEO gets paid.

If you’re a fan of the movie “The Lord of The Rings”, you can identify the movie’s parable of the “One ring” as an updating of the precious pearl parable (not surprising since author J.R.R. Tolkien was a Christian interested in ancient narratives and metaphor). In “The Lord Of The Rings”, the One Ring was the goal worth tossing everything else aside for, because it was the “one ring to rule them all”. It was the one thing that if you could get it, you could get all the other things you needed and wanted.

By itself, the “One Ring” provided a decision procedure for daily action for all parties associated with it. If you’ve never watched “The Lord Of The Rings”, here’s a short scene that really explains the idea.

This Precious Pearl (Or “One Ring”) Principle is the most important idea in business, and finds expression in:

• Goal-setting
• Market Research
• Target Marketing and Selection
• Business Planning
• Business and Sales Forecasting
• Project Management
• Budgeting
• Exit and Succession Planning
• Work-life balance
• And much, much, more

Take goal-setting for example. If you’ve struggled with a “goal-setting” resolution you made after attending a weekend business seminar, it’s because you’ve never seen the connection between “goal-setting” and this principle.

Goal-setting setting is about choosing a precious pearl in the midst of a bewildering array of current and future choices. Going through the goal-setting process gives you the “faith” to stick with the destination decision you’ve made, and allows you to avoid wasting time, effort and resources on options that do not contribute significantly toward the goal.

If you examine current trends, you’ll discover that the years to come will only provide more bewildering options, not less; more choices, not less. While “more choice” is almost always taken to be synonymous with “better” in the western world, authors like Barry Schwartz (in “The Paradox of Choice”) and Jack Trout (in “Differentiate or Die”) have identified some of the pains associated with too much choice and not enough constraint in business and personal decision-making.

Applying the Precious Pearl Principle in a strategic marketing context for example, will force you to decide on your Golden Customer (your most wanted client), and that decision will cascade positively down and throughout your marketing system. How?

You’ll find it easier to know what they want, the most important message/promise they want to hear from you, and the most important operational shape your business should take to fulfill those promises.

Do you see how answering one question can help you answer one hundred (100) subsequent questions correctly? Do you see how it can help you do this faster and easier?

In 1941, Joseph M. Juran, a management consultant discovered Pareto’s work and expanded it into a framework for use in quality control.

The 80-20 principle (also known as the Pareto Principle, 80-20 rule or the law of the vital few) was further popularized by author Richard Koch with the publication of his 1997 book “The 80/20 Principle”.

Since that time, small business owners have been subjected to various “experts” and “gurus” citing it as some sort of cure all for management headaches.

Many of these gurus have essentially taken what amounts to a useful observation and have made it a holy grail of management thinking.

In reality, there is another principle that I think has far wider application than even the 80-20 principle.

I call this principle The Precious Pearl Principle or The Rule of 1.

Let me illustrate this principle by presenting the following scenario:

Assume you are an emergency room doctor, and you have a gentleman before you who happens to have a cavity in his tooth, nerve damage in his arm, and a massive gash in his femural artery from which his life force is leaking out in a continuous red bleeding stream.

Which problem do you attend to first?

If you have any ounce of medical knowledge (or have ever watched more than 2 episodes of medical TV shows), you probably realize that you’ve got to stop his bleeding first and foremost.

The Precious Pearl Principle is named based on a parable told by Jesus (Matthew 13:45-46) in which a man/merchant went about looking for “Goodly Pearls” and after he’d found “a pearl of great price”, went and sold all that he had to buy the field in which he found the pearl.

The Pearl of Great Price was the highest priority action. In a business, your “precious pearl” is the highest return lever you can act on. In the emergency room example above, the “precious pearl” is closing up that bleeding artery. Everything else becomes subordinated to the priority of that action.

In the Theory of Constraints management philosophy first articulated by Dr. Eliyahu Goldratt, this “precious pearl” is known as the “Core Constraint”.

I plan a detailed treatment of the Theory of constraints later on. For this lesson, the important thing you should take away is that the core constraint finds its definition based upon a goal that you have set.

For instance, in the emergency room example above, your goal as the physician is to keep the man alive and nurse him to complete health. While there are at least 3 obstacles to your patient reaching his goal, the tear in his femural artery is the core constraint that should be dealt with.

What does this have to do with managing your small business?

Well, small business owners often struggle with priority and time management. Many of us spend hours and hours working on the “right things” in our business instead of the “most important thing”. If you find yourself multi-tasking, you’re probably working on the “right things” instead of the “most important” thing.

3 Important Questions You Can Ask Yourself Right Now

These are some of the questions that begin to come up when you focus on the “precious pearl” in your business.

In my marketing consulting practice, I take the approach that the highest return lever in most small businesses continues to be their marketing system. Within that marketing system, the “precious pearl” is to:

Develop, Define and Communicate Your Competitive Advantage; the idea, promise, or offer that differentiates your business from all other competitors (including “doing nothing”). This idea is also called your Unique Selling Proposition or USP.

If you haven’t properly developed an effective unique selling proposition in your business, every subsequent marketing effort and activity may yield sub-par returns. A USP makes every advertisement, every networking conversation, every marketing campaign work 5 to 20 times harder.

My work with my business growth consulting clients always, always, begins with an examination or development of a USP that actually works.

Small Business Success

It was through Rich Schefren that I first heard of Eli Goldratt and his Theory of Constraints management philosophy that has forever changed how I look at business productivity.

In my tribute to Billy Mays King of The Sales Pitch, I mentioned Rich Schefren’s own tribute, which I consider one of the most important marketing case studies I’ve ever read on a blog.

Well, in his continuing tribute to Billy Mays, Rich Schefren has released a Billy Mays-style video that really falls flat (in my opinion) from a likeability standpoint, but contains one of the most powerful lessons for experiencing small business success.

The lesson is not explicitly stated in the video as I’m going to state it here, but watch the video, and you’ll get the combined benefit of this mini-lesson and the wisdom of a marketing maven.

Lesson #1
The single most important marketing question your business must answer from the prospective customer is:
Why should I do business with you?
In my consulting practice I call the answer to this question your “Differentiating Value Proposition” (D.V.P.) or Unique Selling Proposition (U.S.P.)

Lesson #2
The contribution I’m now attributing to Rich Schefren is the need to consciously expand the concept of a USP to apply not just to prospects and customers, but to every other stake holder in your business success.
Stakeholders such as:
Prospects, Clients, Employees, Freelance workers, Affiliates and JV partners.
In other words, these groups are also asking, “Why should I do business with you?”
Your business must define a “Superior Engagement Value Proposition” in answer to their query.

So check out the video, and comment below to let me know your thoughts.