“Every child is an artist. The problem is how to remain an artist once he grows up.” – Pablo Picasso
I am VERY childishly excitable and I SHOW IT. Not all my clients understand IT, but most like IT, because (IF I take on their project) IT makes me DELIVER what I promise them.
Unlike Most “Mature & Enlightened” Adults (Whatever That Means), I Don’t Act “Cool, Calm and Collected” When I’m EXCITED!
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I often groan when I hear a celebrity answer the question about the secret of his/her success by saying something like “Na God O!” (i.e. “It’s God’s handiwork!”). You see, I also succeed with God’s help. BUT, I KNOW there’s more to success achievement than saying “Na God O!” suggests!
And this is where successful people in developed societies often differ from us.
Read an interview with them, and you’ll come away with practical ideas – sometimes step by step instructions – of how to proceed in trying to replicate the success they are celebrated for.
That is why they are able to write books that offer actionable advice on how to succeed the way they have. It is why they are able to demystify their own success achievement for those following them to learn from, and improve upon.
In our societies across Africa too many successful people rarely offer tangible insights into what made them succeed. But to be fair, sometimes they actually do not know – or have not given it enough thought to articulate it into any useful form.
The truth is NOT all those who say they worship God are able to produce performances that will make them become successful/celebrated personalities!
And that is because there are so many specific actions/steps that successful persons take that those NOT as successful do not take as frequently and/or as diligently.
I believe that many of the interviewed authentic celebrities I refer to would have loved to give more insight into HOW and WHAT made them succeed, if the right kinds of “probing” questions had been asked of them.
Unfortunately, often times their interviewers are not alert to the need to do this for the enhanced benefit of their viewing/listening audiences.
Anyone who has read transcripts of the popular “Conversations With Millionaires” series will understand what I mean.
I refer to the ability of certain interviewers to ask “probing” questions that get answers OUT OF successful persons, IN A WAY that gives listeners more accurate insight into HOW and WHY the celebrities succeeded.
As they say, “Success leaves a trail…”
Our celebrities need to be “helped” to “remember” what they did (& how), in the manner I propose above.
This is because many of them never really sat down (after having succeeded) to THINK about what they actually did to get the results they wanted – and for which they subsequently became celebrated.
This is a fact.
In our society, if we want success to happen for MORE people, MORE frequently, we need to establish and rigorously maintain systems to INVESTIGATE and DOCUMENT what makes celebrated members of society succeed.
This is so that others who aspire can use the information recorded to achieve similar or greater successes – FASTER and with LESS EFFORT.
One over riding benefit is that society will as a result develop faster, contributing to a better world.
Each person is so self focused that s/he hardly ever gives a thought to how s/he can make the journey shorter, and less difficult for those who follow.
Tell him/her to GO for a particular goal, and s/he will.
But most often it will be done in a haphazard manner, and with little or no effort to ANALYSE experiences and document lessons learned for future reference/guidance.
Following from the above, when things fall in place, s/he takes it in his/her stride without sparing a thought for HOW to make those same things fall in place like THAT again in future – repeatedly.
A direct consequence of that inadvertent oversight, is that when things eventually go WRONG, s/he once again has to adopt the trial and error approach used in the past, until, if s/he is lucky, ANOTHER break through occurs.
For many who use this haphazard approach, it possibly works often. However, compared to the alternative proposed in this article, it can be quite costly in terms of time, effort, and even money.
1. The stress/strain that will arise from recovering from the problems occasioned by the use of a trial and error approach will wear you down – making the “journey to success” more PAINFUL than it should be.
2. You will be inefficient – because it takes you LONGER and costs you MORE time, effort, resources etc, to get the same results.
3. You won’t improve significantly – meaning you may never become good enough to beat your own “Personal Best”. Look at it this way: Only a sprinter who measures and knows her best 100 metres time is 9.99 seconds can AIM to run faster and therefore cross the line at LESS than that time. To achieve that goal, she will then have to CHECK what she can do better or differently to INCREASE her running speed, then TRY it out, UNTIL she succeeds.
The above potentially negative outcome of failing to investigate and understand why you succeed, is that you will LACK the means to EXPAND or GROW.
This could end up giving critics and/or cynics an opportunity to “question” your success.
Almost yearly, that country produces World Class athletes who gain quick prominence in international circles.
This happens because Kenya has a SYSTEM in place that enables it to REPEAT and REPRODUCE its athletic successes. I have listened to interviews conducted with athletes from that country, and the answers they gave to questions asked confirm this.
If you were to look at yourself, your organisation, your society or your country from a similar perspective, is it possible that there are areas where the success(es) achieved in the past now appear to have been just a “flash(es) in the pan”?
IF YES, maybe it’s time you (and/or others concerned), sat down to INVESTIGATE and DOCUMENT why you succeeded back then, so that you can REPRODUCE it NOW and into the future.
NB: This article was first published Online via spontaneousdevelopment.com on16th June 2008.
2 days ago I got a pleasant surprise when a “Production Metallurgist” with a Namibian firm sent me this message via TayoSolagbade.com:
“My boss gave me your ebook on the 25 articles on self-development as a present. However, I am struggling to contact you in order to get the links in the book to become functional. Can you possibly e-mail me the contact form so that I can send you a copy of the invoice. As it stands, I do not have access to all the articles in the ebook.”
Before now, I only got the payment alerts sent by Lulu.com. Not once have I ever been able to identify those who purchased my books.
The Lulu.com system – for obvious security reasons – does not permit that. However, it does allow us sellers to setup auto response messages in our online stores, to be delivered to buyers.
In mine, I invite the buyer to contact me if s/he needs help making use of the book etc.
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Next, I sent him the first of a planned 2 part response as follows:
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Since I lost my 9 year old domain – spontaneousdevelopment.com on 4th May 2014, I have been unable to find extra time to do the needed cleaning up in my other information products.
Ironically, one reason for this is the fact that since I adopted my tayosolagbade.com domain name, and began re purposing my website content on it, the leads generation I’ve been getting has really shot up.
I’ve said that much in subsequent articles – like THIS one (click).
Add to that the demand for my web marketing services by 2 new clients here in Cotonou, and you may understand why I’ve NOT been able to clean up my bylines in my Ezinearticles.com articles, talk less of updating the same in my e-books.
Thankfully, this buyer reaching out to me with my ebook made me dig in and do an much needed update. Now, I just have to make out time to upload it to replace the old one in my online store.
For now, I’ve sent the updated ebook to the above mentioned lady, as an email attachment.
And I also addressed the 2 requests he made…
Excerpts from the response I sent to him, which I believe other farm business enthusiasts will find useful – hence my decision to share it here.
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In yesterday’s article, I announced that I was preparing a special business plan preparation service bundle – and that it was based on the recent elaborate business plan preparation project I recently completed for a new client in Nigeria.
Now, like I said in the email above, this new service will soon be formally launched here on www.tayosolagbade.com
When the sales page goes up, I will announce it on this blog, and also via a newsletter broadcast to my email subscribers.
UPDATE: The service is LIVE. Click here to visit the sale page.
[Update: Uploaded CORRECTED PDF which now has pics – and NO missing text at 3.50p.m] Today, 1st October 2014, is Independence Day in my country – Nigeria. In this special issue No. 9, of “My Ideas for Making Nigeria Better” series (downloadable below as a PDF), I explain why I believe Nigeria’s ability to reap FULL benefits from her Independence from colonialists, will depend MAINLY on INDIVIDUAL Nigerians learning to THINK and ACT INDEPENDENTLY at ALL times.
I spontaneously help others I identify to need it, without waiting to be asked. And I never expect to get thanked for it. I do not need it.
The only way anyone can thank me is by helping others in the same way!
You see, I fear no one, and am never intimidated by anyone’s success, influence or wealth.
That’s why those who know me accept that I will always speak my mind on ANY issue regardless of whose Ox is gored – even if it’s someone who just did me a favour.
I say this especially with reference to instances I’ve seen unfair treatment being meted out to another person by someone I knew.
You see, I believe every living being deserves to be treated with respect and consideration.
But what I have found out about this strange world we’re in is that too many people pay lip service to preserving values like those mentioned above.
I choose to relate with – and acknowledge – people based on who they are, and not some notion of their status.
For instance, back when I still lived in Nigeria, I often went out of my way – sometimes till well after 12 midnight – to help total strangers.
I followed them into the station, and insisted he be released, because I witnessed what happened and he was not at fault.
For over 3 hours, close to 11.30p.m, I left my car parked outside the police station, and engaged the officers in a debate, over the matter, until they agreed to let him go.
They would later seek me out, and do things for me that others had to pay for.
Even when I tried to decline, they would insist.
This is what I teach to my kids to do as well…to stand up and speak truth on behalf of those they identify to need it!
Some people dislike me for it, but that’s the way life is.
Everyone cannot like you. But that does not mean we should fail to treat people right – or stand up for them, when we see them being treated wrongly.
My question to you is this…
I mean in bad times, when associating with you may be perceived as unwise by others, will they STILL stand by you?
What I have learnt is that many people can be amazingly good at hiding their true feelings.
Especially if they feel there is a useful benefit to be had by being on your good side.
So, even when they see you have qualities or faults they detest, they will stick around, and keep telling you they like you.
But that does not mean they will not stab you in the back if they find someone they feel they will benefit more from. Or that they will not look the other way, if they see you getting treated badly.
I certainly hope you do. Like I tell anyone who cares to listen. Every time you do so for someone, you effectively make it possible for someone, at some time in the future, to also do the same thing for you – or for someone you care about!
Know what they about Karma? Well, it’s true. I know, because I have experienced it countless times.
I’m hopeful that you’ll adopt a positive view of all that I’ve said here, and see if there is any truth in it, that you can act on for the future.
My purpose was simply to challenge the reader to RESOLVE to be more REAL in his/her interpersonal interactions.
Too many phonies seem to be around in society these days. As a result too few people are speaking and acting truthfully. The result is that we have a lot of dishonesty, deception, happening across society – and especially even within families.
Only those who take the conscious decision to be different, and to remain that way, will emerge unscathed in the end.
This is because whether they like it or not, there are rules, set by the creator, to govern our conduct here on earth. And every person who flouts those rules will attract what could be considered “hidden penalties”.
That will happen because when they begin to manifest, time may have passed so much that we forget the wrong we did, that triggered it.
You don’t want that to happen to you, because it rarely ends well for those who do things that attract such penalties from the creator!
“You may be on the right track – but you will get run over if you remain there” – Anon
1. How come NOT every Harvard graduate becomes “successful” in life?
2. Why do we all have the same MS Excel software on our laptops, yet some of us (like me) can do stuff with it that most others – initially – argue are impossible?
3. Why do people attend the same learning event, get the same handouts and yet perform differently from each other afterwards?
4. Why do some people complain they achieve less than a colleague (who does the same job) because they don’t have “time” (makes no sense does it)?
5. Why do people want to learn to speak French like you, until they learn how much time and effort needs to be devoted to achieving it like you did?
That is what ultimately makes the difference between the performer and non-performer.
Or the achiever and non-achiever.
Nine times out of ten, it is what EACH individual goes out of his/her way to learn, and which s/he puts to diligent use, in addition to what s/he has been taught along with others, that gives him/her a competitive edge or comparative advantage.
Look around you at those who out-do others based on merit, in an environment devoid of deliberate manipulation by any persons with vested interests, and you will see it’s true!
Following from the above explanation, I believe the answer is already obvious. To succeed, on a continuous basis, you MUST practice DELIBERATE, RESULTS-FOCUSED Self-Development.
NB: I said “deliberate, results-focused” because too many people claim to do Self-Development, when in actuality what they do is mostly wishful thinking, with little or NO ACTION TAKING. And that of course does NOT equate to real Self-Development!
a. To ensure you always have an edge – a little extra where/when it matters most – to out-perform your rivals or competitors.
b. To ensure you always deliver desired results, or to be able to under-promise, so as to over-deliver, no matter the odds (well almost always).
c. To keep yourself from getting run over (or overtaken by your competitors) as this quote implies:
“You may be on the right track – but you will get run over if you remain there” – Anon
d. So you can recover quickly (“bounce back”) when things go wrong.
Note that word – COMMITMENT!
It is the key to success in life. When you say you want something, quite often it may mean nothing, until you demonstrate that you are prepared to go out and do whatever it takes, for a long as it is necessary, to get it.
Question: Why did I wait till this late?
Answer: Because I had to work over 18 hours, to put finishing touches to, and dispatch an urgent Poultry Farm Business Plan, to a Nigerian client, who has a meeting with a prospective investor less than 16 hours from now. And I made it.
In my case, recently having to meet multiple client needs, due to a rapidly growing demand for my services, and products is proving to be a new learning experience for me.
But I trained myself to be a fast learner years ago. So, it’s unlikely to be long before I develop a strategy to permanently address this new need.
Indeed, I’ve already settled on a solution I anticipate will succeed.
And it has to do with building what I call a “publish-ahead” buffer of new write-ups.
If truth be told, I always knew this time would come.
That turned to be a very useful proactive step. I simply used my blog “automated scheduling” feature, to set most of the articles to publish at dates I chose in the future.
During that period, I sometimes stayed 3 or more days at a stretch, without coming online, and yet my articles kept popping up as and when due, on the blog.
Plus the RSS syndication I’d set up as part of my Web Marketing system automatically republished them to my Facebook and Twitter feeds.
Most of my friends probably did not notice I was away all that time – because my wall always had new posts popping up!
Like now.
Thankfully, I already possess the self-development discipline to drive myself to step up my game in the face of such challenges.
So, in a few weeks, I should have sorted this all out, and freed myself to be more and do more.
The message to you is that you also may need to critically examine yourself, to identify what is holding you back from getting more done than you currently do.
“Patience is a virtue that carries a lot of WAIT” – Unknown
Not everyone in paid employment gets to that point when they feel they need to jump ship and go solo (i.e. resign to start a business of their own). But some do. And when the bug bites, it can leave you feeling impatient, and hungry to get started like yesterday.
We are not all equally gifted with (or able to acquire) the same amount or mix of skills and abilities needed to succeed in the world of business.
While some are quick learners, others tend to take a while to get to grips with the requirements for running a business well enough to earn a living by it.
In other words, they WILL struggle to succeed at it, if not well prepared.
I discuss 2 reasons this happens…which is why I recommend careful planning, and bucket loads of PATIENCE – no matter how eager, excited or driven you feel!
Most conventional schools teach learners to become employees, and consumers. A person who wants to go into business must change any of that programming to succeed.
In other words, you want to think like YOU are the boss, and believe that you CAN be successful at being BOSS.
You will also need to become focused on creating for others (buyers) to consume.
But making those needed mindset changes will not be easy for everyone.
By implication, quitting a job to start a business before you learn how to deal with the controlling effects of “school programming” can lead to problems.
This is why I encourage anyone I notice is experiencing such eager-to-start-but-being-held-back frustrations, to WAIT and do it gradually.
For instance, the assurance of a future inflow of money in form of salaried income makes many people unwilling to control their spending.
As a result, they excessively indulge themselves in spending that adds little tangible value to them.
Most times they spend impulsively; to acquire things they can do without.
The desire to own things, and show them off to admiring others. The need to keep up with Mr. X and his wife drives many salary earners to make often unintelligent spending decisions.
Such habits are the greatest enemies of a business owner who seeks success. Especially when you’re just starting out and not yet a billionaire, like Richard Branson.
Unless you misbehave badly at work, it is unlikely that an employer you serve responsibly will lay you off. The only exception being of course if there are bad times.
Other than that, it’s best you quietly – and unhurriedly – make your plans to leave.
And in order to boost your chances of success, you will be wise to begin TRAINING yourself to DROP the habit of making unplanned expenses.
James R. Cook was right, when he wrote in his “Start-up Entrepreneur” New York Times best selling book, that you can get by on far less than you think.
My experiences actually convince me that cutting down spending by 80% can be good for you, in starting up after being in paid employment.
So before you actually find yourself without salaried income, I urge you start cutting down your spending.
You only lose indulging yourself in some excesses. Otherwise, this would only mean that you’d end up with a LOT more funds in your account by the time you actually quit your job.
And that’s what you really need, to make a success of going into business for yourself. Aim to use that job you hold as a fund raising source.
Otherwise, you will find it useful to start something close to what you plan to do, on the side – as a part time venture.
While still earning a salary, you would easily raise the funds needed to launch that part time business, and even easily take care of cash flow challenges that may arise.
Get your spouse or a relative to help, so you don’t have to spend much on personnel. This will depend on the kind of business you choose to start though.
They are still employed full time in mostly high paying jobs (banks, oil companies etc). But they have launched poultry and/or fish farming businesses of various sizes, which they run (often profitably) with their spouses.
Many come to me when they need to expand, and want my Ration Formulator software to begin compounding their own feed.
Sometimes they want my Poultry Farm Manager software.
And at times it’s a business plan they want me to help them prepare.
And sometimes one or two share with me the conflicts they are going through.
Recently, one such individual told me how he was finding it frustrating to keep working for his employer. He said it was preventing him from having enough time to devote to finishing off tasks related to launching a scaled up version of his new venture (a poultry layer farm).
Something about the way he said it howver got me worried that he could end up creating avoidable trouble for himself e.g by getting accused of negligence or divided loyalty.
James Cook called it a “gnawing dissatisfaction”.
But I had to force myself to be patient and do it right. And I managed to leave in a way that earned me exciting accolades and enjoyable send forth parties etc.
Those memories made me decide to offer him some advice – in an email. Later on, I re-read it and decided others in similar situations may find it useful.
The message is don’t burn your bridges with your employer, in a bid to pursue your dream. Even if you don’t need him/her later on, it’s best to leave on good terms.
After all, you would not want YOUR own employee acting selfish and inconsiderate while still taking a salary from you?!
===Starts===
Dear S.
I know what you mean. I felt the same way in my last few years in Guinness.
But here’s my honest opinion.
Like it or not, being in that job is still good for you at this stage of your planning.
It gives you easier access to cash to do most of what you want to do, including the runs to start this new venture.
You must therefore strive to maintain a Positive Mental Attitude about still being there, even when every fibre of your being is screaming to get out.
You know your plans and where they are taking you. Keep them to your chest, then FOCUS on what you are required to do at work, until you have done it to your boss’ satisfaction.
Like Jim Rohn said: Wherever you are, be there.
Make sure you don’t let yourself feel, speak or act resentful about having to work for the company during this transition period.
In fact, I recommend what I did in my final years in Guinness, even after I’d set all my resignation plans. It was then that I even worked hardest and made sure I went the extra mile on every single task I was assigned.
That way no one could accuse me of divided loyalty when they eventually heard I was leaving.
And that enabled me leave with praises showered on me by colleagues and Ogas at 2 levels of send forth ceremonies I was treated to.
You should aim to do something similar or better where you are. Make it a goal to leave with such a positive bang, that even the MD will openly acknowledge you and lament that you’re leaving.
Funny enough, when you leave in that manner, it gives you powerful bragging rights anytime you are asked about your former workplace. You would be able to confidently say that you were in relevant, highly valued and in demand by the company, when you chose to leave.
===Ends===
That happend because the ideas I tried on the side proved to be difficult to develop on a 9 to 5 job.
But I did try for about 2 years – whenever my job freed me.
Lord knows I tried.
Eventually, I had to quit. I was just not making the kind of progress I wanted. It became obvious I had to take the leap of faith.
But one thing I had – and that made me confident – was that I knew I was tough enough to deal with any hardships that my decision would bring my way.
And believe me, they came in droves!
I however doubt that many of those I relate with could endure the kind of unrelenting pain, suffering, humiliation and frustrations that I went through to succeed.
I had a family that experienced major LACK in every sense imaginable during the time I struggled to lift myself.
It was something I never imagined would happen.
That’s why whenever someone say s/he’s impatient to quit work and start a business, I say what I’ve said here…
Take it easy. Take it slow. Start something on the side first, and build it gradually. When it gains enough income generating momentum to cater for your needs, you can take the next step.
The truth is that some of us have to take those risks, and walk those lonely paths to success. And what we learn gives us unique insights to help others who may not be able to handle the same pressure.
Good luck to you!
You can publish a physical book at zero cost, and earn passive income from its sale, for life – IF you know how. I explain how I do it, in this special report.
Below, I show screenshots of how I earn such passive income using publications I write and publish at ZERO COST via Print On Demand publishing.
It could be a book to inspire, inform, educate or all of the foregoing. The stories could be told to show how people hit by storms of life were able to survive and move on – maybe with support from you, or your team/organization.
Persons who need the inspiration, information and education you offer may not be geographically able to benefit from you in person (due to distance).
That’s why writing a book is great.
Those who cannot reach you directly can still buy your book and find it quite helpful. Plus, you can also generate valuable passive income in the process.
Decide If You NEED To Read This Article (Take A Quick Quiz!): This article features my Layman’s Business Variable Costs Control Systems Awareness Quiz™ below. If you answer NO to even ONE of its seventeen (17) questions, there is a good chance the information contained in this article can help you.
The quiz poses simple questions designed to get you thinking about possible areas in which you can look to apply spreadsheet facilitated VC monitoring/control and reduction initiatives in your business.
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The problem in the latter case tends to be that they still have to spend more to get more sales, and often if not well managed, there may not be any significant difference in bottom line margins achieved, especially when competitors launch a counter event.
I describe tested and proven ways by which anyone can intelligently implement Variable Costs (VC) Monitoring/Control and Reduction initiatives – supported by spreadsheet tracking/analyses – to increase chances of routinely recording optimal profit margins even when prices remain fixed and/or competition is fierce.
The ideas, concepts and strategies I advocate for adoption in this article are based on proven practice. In fact, the case study and specific analogies used are based on real-life activities that I personally partook in over a period of six years, as a manager in a large blue-chip multinational brewing company.
Read my article titled “Use Custom Automation Of Your Spreadsheet Reports To Drive Down Costs And Increase Your Profits” for additional details of my experiences in this area, while in paid employment.
What you learn from reading the above mentioned article, will hopefully encourage you to seriously explore ways to put the information provided in this article to good use for your business.
If you need any help with thinking up ways/means of putting them to use, I would be pleased to help out.
Case Study
“Because its purpose is to create a customer, the business enterprise has two – and only these two – basic functions: marketing and innovation. Marketing and Innovation produce results. All the others are costs” – Peter Drucker
What follows is a bit of a simplistic example, but it serves the intended purpose of providing a basis for the following discussion. The logic on which this analogy is based can be applied to any situation.
5 lengths of material A(N2,500.00) + 1 kg of material B(N1,500.00) + 20 pieces of material C(N,2500.00) = 1 unit of Product Z(N6,500.00 Naira or $46.43 US Dollars).
Assume other (say operational and marketing) expenses amount to N500 per unit of Product Z , the Cost Price for one unit would be N7,000.00($50.00) – approximately. That means whenever 1 unit of Product Z is sold, a gross profit of N7,000 (N14,000 – N7,000) or $50.00 USD is made by African Arts Concepts Ltd.
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Now imagine that a staff of African Arts Concepts Limited begins to over use (and this does happen!) material B by say 0.5kg for every unit of Product Z. The usage cost for(i.e. cost of using) Material B per unit of Product Z produced will become N2,250(N1,500.00 plus N750.00).
5 lengths of material A(N2,500.00) + 1 kg of material B(N1,500.00) + 0.5 kg of material B(unrecorded N750.00 usage cost ) + 20 pieces of material C(N2,500.00) = 1 unit of Product Z(N7,250.00 Naira or $51.79 US Dollars).
Adding the other (operational and marketing) expenses of N500 per unit of Product Z, would bring the cost price/unit of Product Z to N7,750($55.4 USD), instead of N7,000($50.00 US Dollars). In otherwords, the company incurs an – unnecessary – N750 or $5.4 US Dollars additional cost to produce EACH unit of Product Z.
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(a). African Arts Concepts Limited may not detect it – except they have monitoring systems(e.g. a custom automated Variable Cost Analysis Spreadsheet) set up to alert them to such occurrences.
That batch of Product Z will therefore still be sold for $100.00 US Dollars per unit(a 20% LOSS!).
(b). Even if it is detected, little can be done to correct it for batches that would already have been produced BEFORE discovery/correction of the problem.
If continued unchecked, this over usage can quickly cause huge losses: Multiply the N750 naira ($5.4 USD) over usage by say 1000 units of Z produced in a month and you get N750,000($5,400 USD) – lost unknowingly.(That $5,400 USD over usage equates to losing 54 market ready units of Product Z!).
What will typically happen is that at the end of the month, the company would find that they have 500kg LESS of material B left than expected. This would subsequently require them to make an additional unplanned purchase of material B using money budgeted for other purposes – thereby disrupting cash flow etc.
The foregoing is one major reason why some businesses that appear to be doing well suddenly go under, or record low profits/losses! They fail to keep a grip on their real costs of operation. What has been described here is applicable to virtually any type of business – be it service or product based. One only needs to change the items of income and expenditure considered in delivering the relevant product/service.
Answer: By Adopting Variable Costs(VC) Monitoring/Control Techniques.
I like to think of Variable Costs, from a lay man’s perspective, as those expenses you incur, which can(and do) vary depending on your ability to find cheaper yet equally – if not more – effective ways to do what you do, when compared to your current methods.
To implement a VC Monitoring/Control system, you can follow the steps outlined below – making needed adjustments to suit the peculiarities of your unique situation or need (Note that the use of spreadsheets is integral to the approach I recommend, as it facilitates sustainability of systems set up).
Start recording and analysing your business revenue and daily operating expenses, including variable cost elements such as how much you spend on marketing, transportation, phone calls, materials usage etc.
You can easily do this by creating Excel spreadsheets with raw data entry interfaces linked to standard reporting templates(which generate meaningful output from formulas applied to your raw data).
For best results, you might find recording materials usages in the same spreadsheet, with their corresponding prices helps in deriving expenses relevant to materials usages(by simple linking of cells to be multiplied e.g.”Kgs” used by price per kg).
You will also need to do some benchmarking by obtaining detailed industry data for businesses similar to yours. Using that data, you would derive weighted averages, upper and lower control limits etc.
These could then be charted in your spreadsheet using actual data you would periodically post. Your objective in managing your business/process would then be to ensure your Key Performance Indicators(KPIs) fall between the established control limits implying that it is performing optimally.
If during your daily, weekly or monthly recording and monitoring, you then notice any of your charted KPIs deviating outside the favourable range, you would be able to quickly investigate and correct the problem before it goes too far.
In the case study used above for example, if a target usage rate of material B per unit of Product Z produced had been routinely recorded in a spreadsheet, and plotted on say a Schewart chart, the CONTINUOUS over usage of 0.5kg per unit would have reflected in the slope of the chart – and therefore led to early detection.
Again, this is a simplistic approach. More effective methods(e.g. automated plotting of a Cusum – Cumulative Sum Deviation chart) can be easily employed using spreadsheets with about the same effort. I cover Cusum charts, and how to use them, in considerable detail in a new PDF report I’m working on.titled “Simple Performance Measurement/Process Control Tools You Can Use In Your Business”.
Answer: By Applying Practical Variable Costs(VC) REDUCTION Techniques.
As I earlier stated, your variable costs are those expenses you incur, which can(and do) vary depending on your ability to find cheaper yet equally if not more effective ways to do what you do, when compared to your current methods.
Adopting this strategy means you will actively encourage/engage in the routine search for quick, easy, practical, inexpensive, and sustainable ways to drastically cut down on the expenses required to make and/or deliver your products and services to those who want them.
The foregoing underscores Peter Drucker’s assertion that Marketing and Innovation are the two basic functions in any business which can enhance its profitability. All others are costs.
Therefore To Increase Your Profits Without Raising Prices :
Find more NEW customers more frequently. But in doing so, think up cheaper and more effective/efficient ways to reach more people who fit your target audience profile. Even if you already have a website, chances are there are still a number of viable ways you could use it to achieve this purpose, that you are YET to explore. Take it from me. I get so so much done at little or no extra expense using my website resources more creatively.
One reason why this is possible is because I have devoted hundreds of hours to learning web design, custom CGI programming and web marketing techniques.
If you actively work to find new customers, you create a growing pool of clients from whom you can generate referrals and repeat businesses resulting in higher sales volumes/turnover. Also, it helps you cover gaps that will occur periodically from client attrition or turnover.
Traditional methods of business marketing and advertising can be quite expensive especially when used for protracted periods. The dilemma of the business owner who seeks increased exposure therefore tends to be, finding a reliable way to stay in touch with(or visible to) her target audience without going bankrupt.
The answer, from my experience lies in learning how to intelligently leverage technology and the Internet to complement the marketing efforts being made offline, in a way that cumulatively lowers overall expenses incurred – resulting in increased profits over time.
Read my article titled “Zero Cost Methods To Boost Your Business Marketing and Cuts Your Costs Using Your Website” for tested and proven ideas, methods, tools and resources you can use.
Actively work to discover and implement quicker, cheaper and easier ways to deliver the same products/services to those who want them. Assume you previously could only turn out 1000 units of your product per month at a cost of $5.00 per unit(to sell at $5.75 per unit).
Then following a change in your procedures, suggested by one of your employees – who gets rewarded accordingly 
– you are subsequently able to routinely churn out 1500 units per month at the same $5.00 cost per unit, the implications for your year end profitability are obvious.
Entrenching a continuous improvement culture in your operations will facilitate innovation – to your ultimate benefit.
To reduce your VCs, you need to measure, record, analyse and trend your data. Many of the income and expense items you need to capture in your monitoring are likely to be the same ones your accountant/auditor would focus on in helping you prepare your end of year accounts for tax returns computation.
Therefore, at this stage you might find it useful to involve your accountant in generating the spreadsheet you want to use – or even have him give you one s/he uses, so you can adapt it for your purposes.
No matter how large your turnover or revenue is, control of your expenses is the only sure way to reasonably ensure your profits are maintained in the face of fierce/increasing competition, and/or market fluctuations. This is especially so, because you cannot raise your selling prices at will – else you price yourself out of the reach of your target customers.
Three(3) Practical Benefits Of Applying VC Monitoring/Control And Reduction Initiatives In Your Business
You will be able to price more competitively and still retain good profit margins even when market situations do not favour most other operators. You would have greater customer appeal. More customers are likely to be able to afford you i.e. your VC reduction efforts enable you price your products/service in such a way that they never become too expensive for your clients/customers.
Also, your ability to cut down your expenses without negatively affecting your product/service quality or delivery, will make it possible for you to offer lower prices/rates and depend on sales volume to sustain the same profit margins. The resultant increased customer base, will naturally afford you increased marketing opportunities, Enhanced ability to withstand/survive market place or industry fluctuations and so on.
They offer some of the lowest rates available in the airline industry, often delivering about the same quality of service as their competitors – who may not all necessarily be too pleased about it :-). If Virgin did not have the means of sustaining this practice, while remaining profitable, they would have crashed out of business long ago.
I never get the accountants in before I start up a business. It’s done on gut feeling, especially if I can see that they are taking the mickey out of the consumer. – Richard Branson
Which would you prefer: More Revenue? Or more Profits? At the risk of stating the obvious, if you do not control your expenses, your revenue can increase without a corresponding increase in your PROFITS. One does not have to be in a business where billions need to be spent before knowing that this is true.
When two units – instead of one – of a raw material are used to produce 1 unit of your bottled juice, you are spending more to produce that bottle, hence your profit margin for that bottle will drop by the value of that extra unit of raw material used, be it with or without your knowledge.
Whether you know about it or not; whether you measure it or not is immaterial, and will not change the fact that you will earn a lower margin on that product.
If that then happens to many products(or a larger number of the same product), you may find at the month or year end, you get a shocking low profit declaration when you(or your accountant/auditor) reconcile expenses, revenues etc for the period.
Things could even fall apart before then. That’s when you see a company that gets plenty of business from old and new clients struggling to find money to run daily operations and make salaries payment(cash flow)!
This is why setting up a Variable Costs Monitoring/Control and Reduction System is important. It will help you keep a close watch on all the important measures of your business’ operational performance, so that you can easily, discover undesirable trends and nip them in the bud.
At the same time, you would be able to intelligently experiment with changes aimed at reducing your operations costs, and monitor their impact in order to decide whether or not make them permanent.
Uncover the invisible costs by using spreadsheet tracking. Some costs are more visible than others. It is those “invisible” cost channels that I refer to here. They are the “potential” profit drain pipes.
Do you know how to identify, monitor and control them in your business? Are you sure you’re not missing a few critical ones? Often times they are avoidable – should not be there – but because the business owner has no monitoring/control system in place, they build up over time, till they cause BIG problems.
Examples include theft/pilfering by outsiders or staff, materials over usages, idle/downtimes in different aspects of your operations, overstaffing, etc.
All these things can – and do – happen. The challenge is for the business owner or decision maker to setup monitoring systems to quickly throw up inconsistencies in the inflow/outflow etc of the concerned items.
As more and more people go into business for themselves, every owner will have to contend with increased availability of the same products/services in the same market.
As has happened in the past, some will have done their operations management so efficiently that they will be able to drop their prices significantly below the market price(or refuse to increase them), and still make as much profit as (or even more than!) their rivals.
The latter on the other hand would struggle to match such price drops if their operating costs are higher – possibly resulting in their being forced out of the market.
This applies to one-man businesses as well as corporate multinationals, be they product manufacturers, distributors, resellers or service providers. The only people who don’t worry about cutting costs in order to give customers/clients stable or even lower prices, are monopolies(due to lack of competitors) and those who “buy their way” to new business.
The wise owner will make a habit of continually exploring Variable Cost Monitoring/Control and Reduction initiatives, that will enable successful delivery of larger numbers of products/services at lesser cost, in lesser time, and using lesser resources.
I could go on, but I think the point I’ve made here is clear enough already. So much thinking/re-organisation will have to be done initially to develop the needed systems. But the process once started, can only get easier. And the positive benefits derivable from adopting this approach will be immediately obvious.
1. One good way to maintain and/or significantly increase your profits without raising your prices, is to reduce your Variable Costs(VCs).
2. You can reduce your variable costs by marketing more efficiently (getting more customers at lesser cost, AND maintaining them at lower expense).
I once read an article that proposed a new parameter COCS: Cost Of Customers Sold or Served). This could be adopted as a Key Performance Indicator(KPI).
3. You can also reduce your variable costs by innovating more(i.e. developing greater efficiency in your routine internal operations and/or product/service delivery).
That way, you would be able to produce/deliver more products and/or services with less effort, in less time, and using less resources. All of these would imply LOWER expenses/costs, leading to INCREASED profit retention per unit of product/service sold.
4. There is saying that : “You cannot manage something, if you do not measure it. Nor can you measure it, if you do not record it”.
Spreadsheet tracking will help you conveniently implement and sustain the process of monitoring, controlling and/or reducing your VCs. You will need to do this so as to constantly evaluate progress of your VC monitoring/control and reduction initiatives.
NB: This article is based on excerpts from the original piece which was first published in 2007 via www.spontaneousdevelopment.com – Tayo Solagbade’s former 9 year old domain name.
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We offer Workbook Auditing/Optimisation and VBA Automation; Custom Spreadsheet Software Development; Sales; Job-Based Spreadsheet Coaching; and Consulting/Advisory Services on effective application of spreadsheets for business use.
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I once read the following quote in a magazine, and it really hit home with me:
“In all things, apply moderation – including moderation” – Anon
There is, in some societies, this issue of “humility” and how important it is for a person not to appear “proud” or “arrogant”. I believe it is sometimes taken too far. Indeed, my personal experiences convince me that in the real world, one needs to be considerably bold and fearless in pursuing a valued life goal or purpose.
In this article I explain why it is important for anyone who desires to routinely and repeatedly achieve challenging goals, to demonstrate an unshakeable belief in her ability to do so, evidenced by a readiness to speak/act assertively about it wherever and whenever necessary.
Let’s take Muhammad Ali for example.
As a young boxer, Ali often boldly voiced the affirmation:“I am the greatest!” wherever and whenever he fought. He was perpetually “talking himself up”, employing various adjectives designed to emphasise his superiority over the opponent.
For instance, prior to the fight in which he won the World title for the first time, the press (who dubbed him “The Louisville Lip” for his mouthiness) widely publicised his prediction which was made in the following exact words:
“Yes I predict, and I know the score. I’ll be Champ of the world in ’64!”.
Mohammed Ali knew himself well and knew what he was capable of achieving.
During the press conference after the fight, Frazier read out a speech in which he mentioned how Ali repeatedly said (grunting between words as Frazier’s punches hit him) “Don’t – you – know – I – am – God?”!!
Frazier said he responded with something along the lines of “Well, ‘God’, looks like you’re gonna get whupped tonight!”, to which everyone laughed.
Yes, it wasn’t quite Mohammed’s day that day, BUT can you imagine how someone could believe that much in himself to the point of comparing himself with God?
I believe Napoleon Hill, asked to comment, would have said Ali had the essential mental attitude of “blind faith”.
Phrases like “Float like a butterfly and sting like a bee” were credited to this legendary boxer.
“The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt” – Bertrand Russel
Ali knew how important it was to be bold and assertive, and all through his boxing career he was like that. That he became the legend he is today, is no doubt a testimony to the fact that “one becomes what s/he thinks”.
It is not wrong to talk or speak affirmatively about what you intend to achieve. I have been doing it for years. And in the past 10 years of my life as an entrepreneur, I have successfully used this strategy to put myself to recorder newer and better levels of achievement.
Then I began talking openly about renting a larger place here in Cotonou, and starting a restaurant business based on those products, with my family.
I have NOT stopped talking about it, and I AM recording MEASURABLE progress towards that goal.
For instance, about 40 days ago, after a long search, I finally found and paid for a place I like.
While I was still searching, I had already taught my kids – as early as September 2013 – to make and sell the products back in Lagos. And they had really taken to it!
I returned – today – from a one month stay in Lagos with them, and we carried out all sorts of Personal Achievement projects that I’d planned as part of a new coaching program I’ve conceived.
One of them was a Selling Skills Development exericise that required them to go out and find buyers for cakes they baked. This is to prepare them to be active players in the family business. Work continues still!
So you see, the key to succeeding with this strategy is to SAY it, with faith, and then TAKE DILIGENT PERSONAL action to make it happen.
Maybe you might want to watch the kind of audience you have before you say some of it, but please do talk about it!
That way you enlist others to help you stay focused on pursuing it.
What then happens subsequently is that they will naturally ask you how far you’ve gone with your plans.
You would of course want to be able to give them a positive progress update, or else risk losing “face”, and not being taken seriously in future. That need to avoid appearing “unserious” would force you to remain committed to achieving your goals, sustaining you till you eventually succeed.
“Excess on occasion is exhilarating. It prevents moderation from acquiring the deadening effect of a habit.” — W. Somerset Maugham
So, if you want to achieve notable success on a consistent basis, seriously consider being moderate in your humility. Your success might just depend on it.
NB: This article is based first published online in April 2006 via Tayo Solagbade’s former 9 year old domain – www.spontaneousdevelopment.com – and later submitted to, and eventually published for syndication at Ezinearticles.com
