Is It Time to Prune Your Business?

Feroz Baum is famous for saying, "Rather than turning over a new leaf, prune your tree so new leaves continue to blossom." When was the last time you pruned your customer base? Your sales activities? Your focus? If you want to continue to grow your business, pruning may be one of the most important activities you can do.

This sounds counter-intuitive, but think about it. As we prune away those areas of our business that do not bear fruit, we have the opportunity to re-allocate and re-focus our time and effort on the areas that do.

We can think about it like a tomato plant. As the plant grows and matures, the stalks become thicker and stronger. But the plant also produces smaller, weaker stalks that grow up in the forks of their stronger stems. If you do not prune out these smaller stalks, they might produce fruit, but they will also draw energy from the main plant. As a result, all of the stems will produce smaller fruit and, potentially, a lower yield. If you trim these stems out, however, the plant will produce more and bigger fruit than it otherwise would have.

Which Customers Are a Time Drain?

The same concept applies in sales. Are there “weaker stalks” in your customer base that take a lot of time and energy but order very little? No matter how much time you spend offering them ideas, educating them about helpful products, they order the bare minimum? What would happen if you trimmed them out and focused on healthy, growing customers instead?

This is easier said than done. You may have emotional ties to even your "worst" customers. You may fear that, if you cut them loose, you'll miss out on that big sale that you keep hoping is coming. But the truth is, that big sale may never materialize. In the meantime, you're missing opportunities to cultivate more profitable relationships with customers who are ready to order now.

6 Key Questions to Ask

If you want to grow your business, take the time to review your customer accounts. Ask yourself the following questions:

• Which customers generate the highest revenue?
• Which have the highest profit margins?
• Which have the highest potential for growth?
• Which are the easiest to work with?
• Which are the most likely to provide referrals?
• Which are most loyal?

Once you have answered these questions, you are in a great position to evaluate your best path forward for success.

A Courageous Investment in Your Future

Have the courage to cut loose those customers who are the least profitable and take up the most time. Shift your focus to the ones that will help you achieve your goals. It can be a scary thing to do, but you may look back and see it as one of the best things you could have done for the growth of your business.