Friday, November 4, 2011

How to Focus in 3 Easy Steps: A Lesson in Theory of Constraints by Dr. Lisa Lang

If you're a "typical" Internet marketer you probably suffer from information overload! There are so many offers and opportunities that come your way...and many of them are GREAT!

On top of that, you're an entrepreneur...therefore you tend to come up with great ideas of your own.

Combine these two things together...and you probably suffer from what many other internet marketers suffer from. It's a disease known as "shiny penny syndrome". You may know the symptoms. Something sounds like a great opportunity so you sign up and start learning about it.

Then ANOTHER great opportunity comes up. So you buy the program, even though you're half way through the first program. You think you can do both at once. While running your current business.

And then a potential JV opportunity presents itself. And you're afraid if you let it go, this will be the "big thing" that you missed out you jump on board.

And now you are juggling WAY too many things, and aren't productive at ANY of them. It's time to stop the madness!

People often ask me to summarize Theory of Constraints. And in one word, it's FOCUS. Buying more Internet Marketing products is NOT the answer!

The project that's going to make you the most money in the least amount of time is the first thing you should be focused on.

You Need a Process to Determine Where You Should Focus

How to focus in 3 easy steps:

1. Determine the revenue potential for each project.

This is an estimate, of course, since you haven't done the project yet. How much potential revenue do you think would result if you completed the project?

Include all income you will be collecting as a result of the project, even shipping.

Don't worry if you don't have perfect information. We just need a ballpark number or "close enough for hand grenades" number. And because you will have an estimate for each of your projects, we are just looking for them to be relative to each other.

2. Determine the cost to generate the revenue of each project.

Costs are those that you would incur as a result of the project. Example project costs:

  • New hosting fees (don't count fees you are already paying);

  • Other new recurring fees like email hosting, but again, don't count fees you are already paying;

  • Sub-contracted help from rent-a-coder, freelancer, or some such outsourced labor. What part of the project will you be off-loading? You can look at bids on other similar projects to give you an idea of cost;

  • Affiliate payments. What percent will your affiliates be getting?;

  • Expert costs if you are paying a expert for their material;

  • Material publications and shipping costs if you are selling physical products;

  • And so on...

Do not include any costs that you are currently paying and will continue to pay whether you do the project or not.

3. Determine how much of YOUR time it will take to complete each project to start generating revenue.

"YOUR" is emphasized because we are not counting outsourced time. Outsourcing is a way to LEVERAGE your time.

Theory of Constraints has been getting some play in the Internet Marketing circles lately. And the reason is because it works.

You are the constraint of your business and this question is: How much of the constraint (YOUR time) will each project use?

The idea is to maximize the use of your constraint to generate the most income. So you can prioritize your projects based on the (Revenue - Costs)/Your Time.

Maximize the Use of Your Constraint (Your Time)!

The project that generates the highest Throughput (Revenue - Costs) per hour of your time should be your highest priority project—the one thing that you are focusing on.

Your constraint is the thing that limits your ability to make more money now as well as in the future.

I find that for most entrepreneurs, the constraint is their time and attention.

So for us to maximize our potential, we need to focus and work on those things that generate the most amount of Throughput for the least amount of our time and attention.

This also means that when you outsource, you are better leveraging the constraint (YOU). You are making money, but using less of your time and attention.

To the extent that you can outsource—do it!

We typically do this exercise and separate projects into 2 types—short term and long term. That's because the goal is to maximize profits now as well as in the future.

Then we typically select one short-term and one long-term project to work on.

This means that you have 2 projects you can work on, but that's it. We want to eliminate much of the multi-tasking your doing.

The key is to...Focus on Finishing!

It is far better to finish a project that will start generating income (or get you closer to that) than to start another project.

We generate no income when we start a project. We start generating income when we finish!

Now that you know which single project you should be focused on...

Do NOT work on or start any other projects until you finish that one project!

When you finish the short-term project (or it's not what you thought and your decide to stop), you can start another short-term project.

And when you finish the long-term project, you can start the next one.

How much is it worth to actually finish a project on your list?

It's common to find that some projects will return several THOUSAND dollars an hour for your time.

It's also common to find that you have prioritized incorrectly—that you are working on some things that you shouldn't be.

One client was beating himself up for not working on a book. Well when we did this analysis, we discovered that the book was NOT at the top of either the short term list or the long term list.

How much energy and attention do you spend beating yourself up or feeling guilty about what's not getting done?

What if the thing you feel guilty about should NOT be worked on right now? How could you better spend that energy and what results could you achieve?

What if you knew the one short-term and the one long-term project you should be focused on with your 10 hours per week?

Here's the point: You've spent a LONG time directing your time, money and attention to what you know. Now it's time to FOCUS. You know enough, for now.

How to Focus in 3 Easy Steps:

1. Determine the revenue potential for each project.
2. Determine the cost to generate the revenue of each project
3. Determine how much of YOUR time it will take to complete each project to start generating revenue.

Extracted from StomperNet SEO Intelligence Report, July 22, 2011.

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