6 Business Mistakes That Undermine Your Revenue Strategy
Building a revenue strategy is crucial to increasing your company’s income, both in the short term and in the long term. In all likelihood, you’ve already gone through several periods of revenue planning and laid out a roadmap for your company’s future. But there are plenty of ways your revenue strategy can go awry if you aren’t careful.
Here are six of the most common business mistakes that can throw a wrench in your revenue plans.
1. Not Increasing Fees Over Time
Companies hate to do it, but eventually, increasing fees is a necessary evil.
As your company matures and your staff gains more experience, you’ll realize that your current fees don’t align with the value you provide your clients and customers. This is good news. It means your company is growing and you’ve become more capable than you once were.
Telling your clients and customers won’t be easy, but it’s a necessary step to maintaining your growth and sticking to your revenue strategy. Try to frame it in a way that helps them understand your value. Because your company is growing, you’ll be able to offer new, or better, products or services in the future.
2. Allocating Too Much Engineering To One Particular Product
The Big Mac. The iPhone. Every company has their “flagship” product. And while some products tend to produce more revenue than others, allocating too many resources to one particular product often means neglecting your other offerings.
Product management is complex, but there’s no need to gamble. Instead, focus on a diverse array of products and services to build a steady path to revenue growth. Instead of being a one-trick pony, expand your engineering cycles to other complimentary products.
3. Failing To Invest In IT, Engineering, and Enterprise Architecture
In a survey by CIO magazine, half of the IT leaders surveyed said their departments were seen primarily as “cost centers.” The reality is that IT can be one of the strongest drivers of revenue (and profit) at your company, but only if you incorporate technology and the IT department into your strategic planning.
Without strategic technical business planning, you’ll accumulate tech debt, excess technology, and underutilized tools that will be a huge blocker for growth.
4. Building Traditional Silos
You can’t expect to structure your business the old-fashioned way and wait for happy little accidents to grow your revenue. Instead of building traditional functional silos like sales, marketing, finance, and engineering, align your company into horizontal workstreams that enable rapid product and feature experimentation.
If you’ve been in business for a while, this is easier said than done. A good first step is to take an objective look at your enterprise architecture (or lack thereof) and build a plan to realign your company.
5. Moving Too Slow
Today, being competitive means being fast. If you're slow, you'll miss opportunities. You must be nimble with your business and supporting technology infrastructure.
If your projects are moving at a snail's pace while other companies are flying by you, it’s usually an indication of a failure in your internal processes. It could be organizational silos, problematic bottlenecks, or a lack of technology utilization.
Whatever the case, you’ll need to do an audit of your current infrastructure.
6. Misalignment of Leaders and Departments
Simply put, if the heads of your departments are moving in completely different directions, it will impact your revenue. All of your leaders need to be strategically aligned and working towards the same objectives.
This isn’t an easy task if your leaders have gotten used to business as usual. An important step is to encourage collaboration by breaking down silos and letting each department head get involved in the others’ processes. Once your leaders are aligned in their mission, they can lead by example and work to get your departments working together.
Simple steps like facilitating communication between departments, holding group strategy meetings, and celebrating wins together can go a long way to aligning your departments. You should also have a documented strategy that every department and leader can refer to so they remember what everyone is working toward.
Develop a Strategic Revenue Roadmap
Keeping your revenue plans on task isn’t just about avoiding common business mistakes. If you need a second opinion on your revenue strategy, look for a results-driven consulting firm to help.
Center Mast brings a combination of strategic and technical expertise to the table to serve companies in the San Francisco Bay area. If you’re ready to talk about your company’s revenue, contact us today to start a conversation.