Editor’s note: I recorded this as a podcast for Productive Flourishing long after I originally published this post. I hope you enjoy it, and if you’d like to hear more episodes of the podcast, you’ll find them in the archives.
Do you know how to assess the value of potential business activities?
Let’s say you’re thinking about going to a conference. There are a lot of reasons why you might want to go, but how can you tell if it makes business sense to do so?
Or maybe you’re thinking about where you’re going to put your operational resources for the next quarter. Is it better to create a new product or enhance your current service offer? Is it better to go on an outreach push or to use that time, energy, and attention to work on your internal business processes?
Or perhaps you’re just sitting there wondering what you should do for the rest of the day and are tired of aimlessly hanging out on Facebook or Twitter. You’ve got the capacity to make something happen, but it’s not clear what you should do with an unfinishable ToDo list in front of you.
Assessing these opportunities on the fly can be really challenging without a framework, but it turns out there is a quick framework to help out here. To develop it, though, we’ll need to get out of the trenches of our work and think about the goals of our business activities.
Any given business activity can have at least one of these three goals:
- The activity can generate cashflow
- The activity can generate opportunities
- The activity can generate visibility
As a quick hint, if it’s not clear how an activity in your business leads to one of the goals above, it’s time to determine whether you should continue to do that activity. Doing something that isn’t worth doing comes at the cost of something worth doing.
Let’s consider each goal in turn.
When you’re thinking about cashflow, it’s always important to think about positive cashflow. All too often, people focus on revenue, but revenue isn’t necessarily positive cashflow. I’ve seen people generate thousands of dollars in revenue only to turn around and have nothing to show for it after they pay support, payroll, and logistical costs.
The additional reason I want you to focus on positive cashflow is that it keeps you looking at how to get your working capital, rather than having a bunch of IOUs and potential payments out there. Cashflow is such a powerful word because it combines two tangible facets of your business: the fact that money in the bank is what matters and the fact that it flows. If you’re not proactive about it, money will flow out and not in.
I don’t need to stress the value of cashflow-generating activities because most people in business get it already. What I do need to stress is that cashflow-generating activities aren’t the only thing you should be doing. Many people focus entirely on the activities that will generate short-term cashflow, and while this pays the bills, it sets people up for a fall later.
A growing business needs positive cashflow, but it’s not the only thing it needs. It needs opportunities and visibility, too, so you should focus on getting them at the same time that you’re focused on making short-term money.
An effective entrepreneur or executive is a master at creating opportunities where there seem to be none, rather than always waiting for the opportunity to happen. When you’re assessing an activity, using opportunity as a lens, you should ask yourself what new realities or consequences might result from your doing the activity in question.
Rather than thinking in terms of point-to-point opportunities, think in terms of opportunity chains. Remember, an opportunity chain is a set of cascading opportunities that are synergistic. For instance, I’m in the process of writing a book on entrepreneurial strategy, leadership, and success. Finishing the book will set up future speaking and service opportunities. Compare writing a book with just focusing on service opportunities; the latter has some immediate and important benefits — cashflow, primarily — but unless it’s coaxed, it doesn’t have nearly the opportunity value of writing a book.
Also keep in mind that you need to generate opportunity chains that are in alignment with your vision, values, and mission. It does you little good to generate opportunities that tilt your business in a direction that’s out of alignment with what it’s about. Pursuing those opportunities will both cost more of your resources and keep you from building on what you’ve already done — the likely result is that any success you have there will be much more terminal rather than cumulative. Your momentum depends on cumulative growth and opportunities.
It’s better to have an opportunity and not need it than not have one and need it. The more right opportunity chains you set up, the faster and more smoothly your business will grow.
Whether we like it or not, to grow our business, we have to get what we’re doing in front of people. If we’re not in front of them, we don’t exist to them unless we’ve become a character in their stories.
As visibility and momentum increase, though, you’ll need to be more selective about the venues in which you get visibility. Being seen by your ideal customers is much better than being seen by people who aren’t likely to care about what you’re doing. But being seen by somebody is better than nobody seeing you at all.
Where I’ve seen many people fall down — especially in online business — is that they go and get seen but they don’t have their homebase in order. If you don’t have something for people to hang onto once they see you, what good is being seen? There are times to be seen even when you don’t have an offer or shingle, but at a certain point, you’ll need to spend some time figuring out what the point of bringing people back to your business (site) is if it’s not setting up opportunities or cashflow.
While I’m on it, remember that the point of visibility isn’t just to get seen by people who will buy something from you later on. Even more important is being recognized as an authority and leader; you might not make a single sale or get a single person who follows you back to your business, but the fact that you’re in a league of leaders, experts, and authorities increases your business’s value.
Trade-Offs and Sweet Spots
The reality of business is that you’ll often have to trade one goal of business for another. We’re quite familiar with this when it comes to money; “it takes money to make money” is both true and useful. What we don’t often see is that sometimes we need to pull back on cashflow-generating to build opportunities and visibility.
Let’s say you’re a coach with a healthy client roster. When presented with the opportunity to be a part of someone else’s teleseminar, you might have to schedule the afternoon to do it at the cost of client sessions you could do instead. In this case, you’re exchanging cashflow (rather than cash) for opportunity and visibility. Whether it’s worth it to you depends on a lot of other factors, but it’s at least helpful to assess the true cost of these opportunities in terms of cashflow, opportunity, and visibility.
For instance, you could determine that it’s a no-brainer because the event will likely pull in more clients that would quickly offset the immediate cashflow loss. Or maybe you decide not to do the event because you need that immediate cashflow to fund some other opportunity. The point is that you have ways to work through these types of assessments.
Or perhaps you decide to do some outreach work in an audience that isn’t familiar with you. In this case, you’d be trading short-term opportunities and cashflow for visibility, banking on the fact that you’ll be able to serve the new audience once they warm up to you.
On the other hand, it’s often possible to do activities that achieve two or more of these goals at the same time. The example of writing a book that I used above is an example of this; it brings in cashflow, generates opportunities, and increases visibility. Of course, this is assuming you write a book on something that’s relevant to your values, vision, and mission.
The more of these sweet-spot activities you do, the faster your business will grow. It’s one thing to plan strategically and quite another to operate strategically. When you align both, you can get some powerful results. Thinking in terms of cashflow, opportunity, and visibility helps achieve these results precisely because it helps you do this alignment faster and more frequently.
That said, sometimes one of Cashflow, Opportunity, and Visibility is the business imperative and it displaces the others; it’s typically Cashflow that’s King of the urgent. While displacement (doing one thing excludes doing a host of other things ) generally frustrates us, the upside of displacement is that it can help guide our decision-making. The best decisions often come when there are useful constraints, for otherwise we run into either the paradox of choice or analysis paralysis.
Take stock of your current state of business. Which of Cashflow, Opportunity, and Visibility are most important for your business health right now? Which of the others might you be able to weave into the mix so that you can get further, faster by achieving multiple goals with one activity? (Tweet this.)
Thanks for this post Charlie. I really like the clarity you present. I think the hardest thing to do in implementing these various business activities is to strike an effective balance.
Because these activities affect each other in different ways, I’ve found that too much focus on any one can negatively affect the others.
I suppose your point about assessing why doing the activity would probably help ensure that the right balance is reached.
That’s the hope, Marlee. The framework gives you some perspective, but there comes a point when we have to know when enough is enough, too. When we recognize that we have enough of one for now, we can focus on getting some of the other that we’d like more of.
Megan Elizabeth Morris says
This is brilliantly clear — excellent concept, excellent post!
loved this post. especially the piece on visibility. i thought of my web clients who do the same thing… they are worried about search engine ranking (visibility) instead of focusing on homebase (what do you want people to do when they find you?)
thank you, as always, for your clarifying posts. i like recognizing my sweet spots and the three filters you’ve shared here will definitely help!
Andrea Feinberg says
Very nicely defined; thanks so much for this. One area where I feel the business owner may need additional help is in clearly understanding what opportunity is and why it should be her/him that pursues it now. Some choices – better packaging, improving procedures, documenting processes – represent opportunities that may be best performed by a well trained and empowered staff and not the owner her/himself. Therefore, it’s important that the c-level exec. understand opportunity as it pertains to her/his role in the organization.
Rob Laughter says
Dude, this is exactly what I’m trying to accomplish with my own business. We’re all taught that marketing is separate from delivering your service, which is separate from making new connections, etc.
But that’s TOTALLY inefficient. In REALITY, it’s all one and the same. If you try marketing a crappy product, it comes back to you. If you have a great product, but you don’t give your customers a way to connect with you, you miss out. If you don’t connect with your customers, it’s crazy hard to market your stuff.
So I’m on a mission to roll it all together, and I believe that every business person should, too. It just makes life easier for everybody, no?
You get it, Rob. It’s simple to understand and hard to practice – but it’s so worth it.
John Biesnecker says
Everyone is taught that those roles are different because that’s the only way highly compartmentalized, bureaucratic large corporations can handle it — the sort of interoperability a small company (or a company of one) is capable of simply isn’t doable when you scale past a certain size.
Thankfully, I’m a small fish and can combine all those roles, too, just like Rob.
Thanks for the post, Charlie, I really enjoyed it.
Great point, John. There’s also the fact that a well-made team can really have some synergistic action going on. Have you ever experienced a talented CEO get paired up with a strong COO? It’s a beautiful site to behold.
Unfortunately, most businesses and executives think they’re better than they are because they don’t know how to assess what’s working and what’s not.
Willie Hewes says
This is very clear and very helpful, thanks Charlie.
I’ve had a feeling for a while that I’m not focussing on the right things. I’ll have a look at my activities with this as a model and see what I get.
Glad this helped, Willie! It was nice to see you here in the comments.
Trever Clark says
Hey Charlie – Great stuff! This is timely for me. I’ve got a million ideas for projects, and until recently, I had been trying to pursue them all. It was driving me crazy, and the sense of being overwhelmed was leading me to inaction.
I finally decided to pick the two projects to work on that I thought would best balance immediate results with long term goals.
I love your tips here of thinking in terms of Opportunities, Cash Flow, and Visibility. After all, what else really matters in our businesses? Definitely gives me food for thought as I move forward with my two biggest projects.
I’m so glad you trimmed it down to two projects, Trever. You’re not saying NO to all that other stuff – you’re just saying Not Now.
Charlie – this is great. We were just talking the other day about how to think of our various social media tactics and this structure seems to be right – for all things business for that matter. Thanks!
Archan Mehta says
Nice post. Thank you.
I want to focus on visibility.
PR is oftentimes given the step-motherly treatment, but it is hugely important.
Try to contact the editor of your local paper and invite him/her out to lunch.
Can you cajole the editor to do a feature story on your business? How about an interview or writing a profile? Make sure you provide the details.
Another option is to send out a press release to local publications about your products or services. In fact, send out a media kit. Or hire a PR agency if you don’t know how to do it yourself or feel uncomfortable since it is your first time.
Customers tend to trust third-party endorsements rather than direct advertising. That’s the nature of the business and right up PR’s alley.
Therefore, PR can have a huge impact on your business. The bottomline is to make sure customers or clients keep on knocking at your door, asking for more.
PR can also do wonders for your image within the community. With PR, you can differentiate yourself from the rat pack and become an opinion leader.
Sometimes, PR is a better option for you when you know that advertising may not work. Too many people have grown cynical about advertising. Cheers!
Del Hickson says
Thank you for such an insightful post. In my business, I am currently focusing on visibility. I know that in time, this will lead to opportunities and cash flow.
Christina Crowe says
Wow, what great concepts Charlie! Where on earth do you get your ideas? They’re brilliant!
This is an interesting way to look at a business. Too often do I just focus on cashflow. Sometimes, I do focus some of my attentions on visibility, but I mainly do the things that I do because I want to increase cashflow. I didn’t even think about the opportunities that would arise if I did a particular activity.
This post is very inspiring. I’m going to make a similar chart as the one above on Microsoft Word and then print it out, fill it in, and stick it on my wall. This way, every time I’m about to complete a task, I can instead think of whether that task will only increase cashflow, or if it will also increase visibility and the number of opportunities that arise.
Terrific post, Charlie.
Charlie, great post on a logical framework! I recently left a career in consulting and finance to pursue my passion with food. As a new entrepreneur it is easy to fall into the trap of trying to do everything.
Victoria Gibson says
Just came across your excellent site today, after seeing you mentioned frequently. Well, you definitely live up to the buzz! Just picked up the 72hr Sale offer via your value-added link, and got nice insights from this post. Think I was getting daunted that my tasks needed to have all 3 elements – so instead was choosing way less effective tasks that didn’t intimidate me! Thanks again, looking forward to visiting more!
Tito Philips, Jnr. says
I didn’t just enjoy this unusual article, I retweeted and even hyperlinked it immediately on my most recent post on how entrepreneurs can evaluate their personal progress.
Thinking with frameworks like this helps to clarify our focus as entrepreneurs. It is not an easy task sometimes being caught up in so many activities that we end up not knowing the ones that count anymore. Why we think about surviving the moment, we must never forget that the future would soon become another pressing moment that we must address. Hence, it becomes expedient that we never lose sight of the future while focusing on the survival instincts of the present.
Thanks so much for this valuable piece Charlie. I also write on business development and entrepreneurship, and I most glad I have found a site where people like myself gather.
Tanmay Saraykar says
Came across your blog through Twitter. I must say that you make some compelling points. I liked your ideas and I agree with many of them.
One point I would like to make is that besides positive cash flow, opportunity and visibility, any business activity should at least generate, is “referral”. A lot of online businesses prosper because they are worth referring, sharing and talking about. Indeed, “ability to generate positive referrals” is almost always built inside the product, the price or the customer service, but if a business activity doesn’t generate an actual or a potential referral, I think it is not doing justice to the business. What say?
Charlie Gilkey says
I say I agree. It’d fall under opportunity, though. The more we look past the first sale or intake and figure out how to build from there, the more effective our overall operations are.
First off I would like to say terrific blog! I had a
quick question that I’d like to ask if you don’t mind.
I was interested to know how you center yourself and clear your mind
before writing. I have had a tough time clearing my mind in getting my ideas out.
I truly do take pleasure in writing but it just seems
like the first 10 to 15 minutes are generally wasted just trying to figure out how
to begin. Any recommendations or tips? Cheers!