What if your financial goal for your business over the course of the next year was to aim for a five percent profit increase or simply to sustain your present annual financial state? Who is not familiar with the quote that zeros in on learning to crawl before walking and learning to walk before running? Thanks in large part to our current digital age where information from almost every angle is racing across our environment at breakneck speed. Thus, we find ourselves in a condition of falsely believing we can arrive at the pinnacle of success – faster, cheaper, and more efficiently than ever before.
Why, as entrepreneurs, do we shoot for the summit long before taking out first baby-step up the mountainside?
Analyzing the Numbers: What if…
If you compete in an industry that generates over a billion dollars annually, what if you directed your strategy toward attaining a mere one half of one percent of the industry? Think about it this way, one half of one percent of a $1 billion market industry would render an annual gross for your business of $500,000. So, the question for you is: “Would you be disappointed acquiring an annual gross profit of $500,000?” What if the industry to which you compete generates $100 million annually? Applying the same one half of one percent mathematics, your share would be $50,000 . Would you be disappointed acquiring an annual gross profit of $50,000?
Reality Check: What if…
Let’s take a high-level look at the literary industry. This is the industry to which authors and publishers compete. According to Milliot (2014) at Publisher’s Weekly, total book sales rose to $15.05 billion in 2013 in conjunction with the report results filed by Association of American Publishers’ StatShot program (AAP). Now, let’s apply the “one half of one percent rule” as illustrated above. One half of one percent of $15 billion would equate to $7.5 million. If we analyze the book sales numbers of paperback titles for the religious book industry segment for 2013, according to Statista (2014), annual sales for this book genre were $119 million. Again, when we apply the “one half of one percent rule” as illustrated above, we arrive at an annual revenue potential of $59,500.
Why must we pressure ourselves to fly before learning how to flap our wings? Why not alleviate the pressure and risk by directing your sights and energies upon the development, implementation, management, and measurement of a more realistic strategic approach?
Why pressure yourself to shoot for the moon when the top of a hill will do?
Be smart and be encouraged,
Milliot, J. (2012, July 12). Book sales fell 2.5% in 2011. Retrieved from http://www.publishersweekly.com/pw/by-topic/industry-news/financial-reporting/article/61667-book-sales-rose-1-in-2013.html
Statisa. (2014). Religious books sales revenues in the United States from 2011 to 2013, by format (in million U.S. dollars). Retrieved from http://www.statista.com/statistics/251467/religious-books-sales-revenue-in-the-us/