Pruning for growth - but where?

Regular pruning is critical to the growth of plants and the same is true for your business. The key is knowing where to prune and how deep, and during tough or turbulent times, it's often advisable to prune deeper. But you need the hard data to help direct the shears.

Have your finance team give you a spreadsheet showing gross margin dollar contribution - or just revenue - by product/service listed in descending order. Then walk down the list and draw a line when you reach 85% of your total revenue or gross margin dollars. Seriously consider eliminating the rest, taking the energy and focus you've placed on these underperforming activities and redirecting it to your top producers.

This same exercise should be repeated with customers, raising prices on your least loyal to either make them more valuable or drive them to your competitors. Obviously, this needs to be handled delicately and an evaluation of future lifetime value needs to figure into the decisions. If you have the systems in place, your  finance team can be helpful in providing this additional analysis.

Continue the exercise by location, opportunities, distribution channels, etc. What's critical is that someone is handing you a piece of paper - best if it's graphical - that is keeping you updated on the profitability/margin contribution by product, customer, office, channel, and/or sales person each week or month at the least. Then you and your business leaders will have the data needed to make critical resource allocation decisions.