“If a task…does not, in some way, increase my revenues or lower my costs, I don’t deal with it.”
I had dinner last night with a friend who is the director of marketing and development at a hot new startup in the hospitality/retail area. I’d tell you what it’s called but I don’t have permission just yet–the convo wasn’t official.
But it suffices to say that the company aspires to be “the next Starbucks,” serving trendy, profit-rich beverages with often-difficult-to-pronounce names, only theirs have a bit more “kick.”
The company is onto something. They’re growing fast, from just one outlet a year ago to five, in major cities like Seattle, NYC, and DC — which isn’t bad for a new retail storefront concept, under any circumstances, and especially good for one with only angel investors. And their about to double the roll-out pace.
Which is why I don’t see my friend too often anymore, she’s usually off scouting sites in new cities. So last night, while I had her attention, I asked her about an issue that I know plagues a lot of founders in a growth-mode, including me: Time management.
I wondered how she, as a one-person department, manages such diverse tasks as:
* scouting for new storefronts (lots of travel!)
* managing construction sites (contractors! need we say more?)
* vetting retail candidates for the stores (lots of screening)
* PR for the company (annoying dinners with reporters)
* nurture vendor relationships to ensure her products are scintilating to her still-new customer-base (even Gap,Inc. struggles to keep it’s offerings interesting, and they have thousands of people to do only this.)
Her response was instructive:
“It’s really simple. I look at my inbox of tasks and if addressing a request that is there does not, in some way, increase my revenues or lower my costs, I don’t deal with it.”
Sounds simple. But this Revs/Costs Vetting Test actually takes some tough discipline.
1) Press, for one, is out. Media is nice, but “I can’t handle the distraction right now,” she says. The nice stories that are already out there about her company still bring new customers into the stores–even months later. Right now, with time in short supply, it doesn’t make sense to invest more of it on media. She has calculated that the additional revenue growth she’d gets out of it, wouldn’t offset the cost to the company in diverting time away from other, more mission-critical tasks.
2) Responding to new vendor inquiries is out. She hasn’t the time to cultivate entirely new (risky) product-lines, or producers, right now. So she spends her time nurturing the suppliers she already knows, and knows how to deal with, to accomplish things like re-negotiating contracts to aid her margins wherever she can.
3) Investor-relationship development is out. We all feel pressure to tend to the overtures from would-be investors — you never know when you’re going to need money. But my friend says that because her company doesn’t need money now, this can’t take a spot on her priority list of tasks. The best thing she can do for her company’s future funding needs is grow revenues and cut costs to make any future investment as attractive as possible. Investors have thick–ROI-centric–skin anyway.
One task you might think would not pass the test is a customer service request. You’d be wrong.
My friend prioritizes customer service tasks, because she knows that customers who email her because they aren’t happy with a prodcut or because they’re trying to retrieve a personal belonging left in one of her stores matter a lot to her revenue growth: they are one of her only benchmarks for customer retention.
If she solves their problem, they will come back and tell people about how helpful her company was. If she does not, they probably won’t return — any churn like that juices her cost of customer acquisition, so it lowers her revenues and amps her costs. This is why customer service calls ger prioritized even though she’s the only one on staff right now to vet them (in between new site location scouting!)
Here’s how I really know my friend’s tactics are working well: Her board of directors just gave her the budget to expand her marketing and biz dev department from one person to five. When is the last time any founder on this site felt bullish enough to allow his/her marketing or biz dev person to hire 4 people all at once?
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