MBA2124 Your Business Strategy: How Much Time Should You Dedicate?

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As business owners, you're gonna make hundreds upon hundreds of decisions every single year, if not thousands. Some of these decisions, I would say most of these decisions will not make or break your business, but a handful will. And what I found is that a lot of business owners, they're kind of binary. They're like either or. They either spend seconds on every single decision or they spend hours on every single decision, if not days. And to be productive and to do this right, you just can't do that. You have to recognize that some decisions, some strategies for your business have more of an impact. You need some time to form a proper strategy so that you can implement. And some of them, the strategy really doesn't matter. You just get it done. I'm going to give you sort of a rule of thumb so that you can be able to know how much time to spend on strategy, whether it's your marketing strategy or pricing or your business model or higher qualifying customers, all that kind of stuff. But first, let me talk about the different stages in business. I'm a big believer that strategy matters in all of the stages, even when you're just getting started. But it doesn't matter as much in the beginning as it does a few years in or decades in or millions upon millions of dollars or customers in. Let me explain. Your business strategy really doesn't matter if you have zero customers. If you have nobody buying what you have, you don't really have a business yet. You might have expenses, but if you don't have customers, you really haven't exchanged your product or your services for money. Right? You're not dealing in commerce here. So really your strategy here of how to acquire customers and your strategy of your pricing and your strategy of scale, it really doesn't matter much because you haven't actually proven that what you have is something what people want. So your strategy for pricing or how to scale or your marketing strategy, it's really irrelevant because you haven't yet proven the product you have to offer is actually something people want. And a lot of people don't get to that point. They don't actually sell a product or service because they bog themselves down in strategy. They're like, I need to have the perfect pricing strategy and the go to market strategy and the perfect strategy to be able to acquire customer. And what about retention and thinking of all these things, but don't have any customers yet. This is like planning out how to invest your money and you have no money. So whatever strategy you have right now really isn't going to impact the business because you are not deploying it to anybody or to an actual business. So your goal in the beginning is to get some traction, is to just get some customers, is to get some wins. Once you have a business with some customers and some sales. Now your strategy matters a little bit more because one, you don't want to lose these customers. Two, you want to be able to get more customers so that you can validate your business further. You also want to make some money so you can reinvest in your business. So as you start growing, your decisions and your business strategies will matter more and more. In fact, as you go to the other end, where you're a billionaire, let's say, for example, your decisions and your strategies are critical. In fact, Warren Buffett actually admits he only makes about two or three big decisions in a year because those decisions have an incredible impact because of the risk of loss, right? He's got so much wealth that these decisions can affect his businesses, can affect his wealth, can affect his ability to reinvest in the future. So he takes his time because every move counts. But in the beginning, when you have nothing and no customers, every move really isn't that critical. You'll actually learn faster and make more progress by just making more moves and figuring what not to do and then finding out through trial and error, okay, this is what customers want. This is what works, this is what sells. So say, for example, you have a sustainable business, meaning that you have customers and you have revenue and you actually have a business that's sustaining your life. And now you have something to lose. Okay? So at this point, I actually do think strategy is important. You need to spend time on a strategy before you implement. Now I like to time box myself so that I don't go on forever. And it forces me to dedicate myself to finding a strategy that works, researching it, planning it out, and then planning my execution. So I have a formula that I personally made up and I find it works for me, and I'll pass it on to you for you to try it out. And it's a dollar versus minutes for how many Minutes I'm going to dedicate to strategy. And it basically correlates the impact that this strategy or this decision is going to make on my bottom line. And it's dollars per month. So say, for example, I'm making a decision that's going to increase my customer spend or ARPU average revenue per customer each month by a dollar. Then I spend 10x that amount in time. So I'm talking about minutes here. So $1 extra in ARPU, I spend about 10 minutes on strategy. I just sit down, I think about making a choice. What are the decisions I have to make? What are the options I have to implementing xyz, whatever that is marketing or sales or retention. Okay, but let's say now that that's going to increase customers average revenue per month to $10. Well, now I'm going to spend 100 minutes. This is a little over an hour. Okay? And then my maximum really is. Because then at that point the impact is quite big, is what if it increases $100 per customer? Well, now I'm talking about a thousand minutes. That's 16 hours. Okay? So that's about maybe two or three full days of strategy work. Why? And that's kind of where I stop. Because beyond that, then it's kind of exponential. But it's worth my time to sit with my founder or sit with my decision makers, to sit for 16 hours, two or three days together to strategize and come up with the best strategy possible. Because the impact of the strategy is going to increase our monthly recurring revenue by $100 per customer. That's a huge impact. It's worth my time to put it in. But if I can't prove that this has that potential with real data, then I don't spend that time, okay? I make sure I kick it back and give it a fair evaluation in terms of price, in terms of increase in revenue, I should say. And this is kind of a rough guide for me, so I know that I'm spending enough time, but not too much time on something based on its impact on the bottom line. Why? Because my time is valuable, okay? And I want to spend my time wisely so that if I'm going to spend three days, I know it's well worth it. I don't feel bad about it. I don't feel bad that my calendar is being cleared and I had to cancel some appointments or whatever. I'm not doing something else because I know the impact is going to really help our business. And it really got to nail this strategy to make sure, it works. A good example of this is revamping your pricing or packaging or maybe changing your sales acquisition or maybe changing your webinar that acquires customers or converts them and changing the offer. And what's your strategy there? Maybe you need to read a few books or take a course or, you know, reformat your webinar slides. Me taking away three days of my week to do that, and really just going full on, it's well worth it if I'm going to make that kind of revenue. Now, a few more tips. When it comes to time dedicated to strategy, I like to have a strategy for any major impactful actions, meaning it's going to affect most of my customers. Right. If I'm going to say, for example, launch a new feature for webinar Ninja and really it's only going to impact 10% of my customers, my top customers, or maybe my bottom customers, the customers are spending the least. The point here is that it's not going to impact the majority of my customers, actually only a small fraction. I'm not going to spend too much time on strategy. Why? Because it'll be faster for me to just implement, get feedback and iterate. Why? Because it's not such a big impact. It's only 10% of my customers. Yes, as long as they, you know, don't have a disastrous experience, which is never the case. But I'm just testing out a new feature and I want to get feedback. I don't really need to put too much strategy in there. But if this thing is going to affect, you know, 90% of my customers, I want to tread carefully because the vast majority of my customers are going to communicate with me, are going to affect my customer service cues are going to maybe be, you know, a little bit ruffled by this change. I'm going to spend much more time on the strategy of implementing and communicating this change to my customers. This is why a lot of big companies and apps like Facebook and Instagram, when they roll out features, they don't roll out to everybody. They roll out to a subsection of their users. Because it's just easier than trying to figure out what's right or wrong through just spending hours in a boardroom to just find out what users actually do. My next piece of advice has to do with revisiting your strategies, whatever that is, marketing or sales or your customer acquisition, or even just your business model in general. What was good for your business at one point may not be good for you now or in the future. You evolve, you change, you change your priorities, your customers change, your needs and the needs of the business might change. So I highly recommend you revisit your business and your strategies at least once a year. This could be a simple, you know, one hour meeting to just kind of go through these things with the stakeholders or the, you know, founding group or the management in your business, even if it's just you and a business partner. So that you can just go through these things and say, is this still applicable? Is this still working for us or has this gone stale? Or maybe we need to revamp this strategy. Maybe the strategy is just not working anymore. Maybe the way we used to acquire customers have dried out and we need to find a new acquisition channel and a different strategy for that. Sometimes we just put things in autopilot and we just never revisit them. That's really a silent death. You want to make sure that you're revisiting your strategies on a regular basis.

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To wrap today's lesson, let's talk about when your business starts booming and starts growing. You're making well over a million dollars a year. You have hundreds or thousands of customers and your decisions and your strategies really, really matter. It really impacts the business and the trajectory you're going in. I recommend you spend at least a couple of days every six months and just work on strategy. This is what we do. We spend about two or three days. We go away, we leave our office and we go somewhere else, like a hotel or resort or somewhere out in nature. We're out of our work zone and we're in like a creative space. We basically list the things we feel we can improve on in our business, and we build out new strategies to try to improve them. Right. We may not have the perfect strategy right off the bat, but we're going to have different options so that when we go back to work, we're going to implement and we're going to give each one a try. We do this every six months, and it's well worth it because often the first couple months after that kind of retreat, we see some of the biggest growth in our business. We see some pivotal changes because we made some really good decisions on the trajectory of where we want to go and how we want to improve in different areas. For example, the last time we did this, we said to ourselves, we want to make sure that we improve our retention. We were not really happy with how our customers are sticking with us. So we dedicated all our projects for the next six months to making sure that we retain our customers. And because of that, we've seen our lowest churn rate and our highest retention rates and ever. And it's because we built strategies and plans to have an internal private community to improve retention. We hired a customer success manager that does onboardings and demos. Jenny does a great job. Shout out to Jenny. We started reaching out to experts and creating expert webinars so that we can keep our customers skilled and feeling like they're getting more value. We improved the software and reduced bugs to a minimum. We did a whole lot of things and built strategies that for those things and went back and told the team, hey, this is what we're working on. This is the strategy. This is what we're doing. My advice is that when you're building out strategy, don't worry about implementation. Don't think about the details right now. Let your team, let yourself. Later on when you go back, worry about the implementation and the details. The strategy is something separate. What you want to get done, how you want to get it done, how you want to go about it, what goals you want to accomplish. That's really what's important. Thanks so much for listening to the $100 NBA show. If you love what you hear, hit subscribe. So you don't miss an episode by hitting subscribe or follow on your favorite podcast app. Right now, you get all our episodes automatically and you get access to over 2,000 business lessons in our archive. So go ahead and do that right now. Of course, if you love the show and you want to give it much love the best thing you could do is share the show on social media. Go ahead and share it. Let them know that they can just go to 100- MBA-NET so they can subscribe to the show with our friendly buttons. Before I go, I want to leave you with this. I find that a lot of entrepreneurs are either very much leaning towards being a doer and implementing and they find strategy hard because they just want to go, go, go, or there's people that love strategy and planning and they actually spend a little bit too much time on that without doing any implementation. You know yourself. So make sure you put that into the equation of how much time you put into your strategy, know your tendencies and make sure you balance it out. Thanks so much for listening and I'll check you in tomorrow's episode Q and A Wednesday. I'll see you then. Take care.

Fidelity Active ETFs have the flexibility to shift and transform as markets do the same. So instead of just riding an index, they can seek to outperform it by adapting to market conditions and pursuing new opportunities as they emerge. And while you get the potential outperformance of an actively managed fund, you can still buy and sell it on your terms just like any other etf. Markets can change in real time. Make sure your ETF can too. Learn more@fidelity.com ActiveETFs before investing in any exchange traded fund, you should consider its investment objectives, risk charges and expenses. Contact Fidelity for a prospectus, an offering circular, or if available, a summary prospectus containing this information. Read it carefully. While active ETFs offer the potential to outperform an index, these products may more significantly trail an index as compared with passive ETFs. ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Fidelity Brokerage Services, LLC Member NYSE SIPC.