How to apply what you have learned, so you can be more profitable, sooner

If I had to sum up what we learned in 2021 (or should have learned), it’s that selling in a constrained marketplace is much different from selling in a commoditized one. 

Most of you have never worked in an era where the event production seller has more power than the buyers. This means your relationship with customers has changed. It also means your supply chain has more control over you. 

My Must-Do List for 2022 captures the mindset shifts that should be complete by now, but for whatever reason — too busy, too fearful, too difficult — might not be. 

Hopefully, you can already check some of these items off. 

• Set Brave Profit Goals — 20%+ net profit was common in the 1990s. Over-capitalization and staffing redundancies drove margins down. Those mistakes have been reset by the pandemic. “Make hay while the sun is shining.” 
• Forecasting — Learn to read the activity signs. Trust your indicators. Also, teach sales how to close a deal without fully articulating the project. When the client wants to give you the job, don’t wait to define it. Say, Yes.
• Overbuy — Instead of adding overhead, invest in one-time direct costs. Book more labor than you have to. Subrent more gear than you need. Buy changeable airline tickets. Pay a premium to reserve trucks. This will create some inflation in the market, but will provide flexibility that your best clients will gladly pay for. 
• Pricing — Your direct costs are rising, and procurement costs are skyrocketing. Sourcing supply chain is a full-time job now. Don’t apologize for rising prices. Explain them in terms of value. 
• Proposals — Quit making proposals about math. Explain what you will do, what it includes, and if necessary, what is not included. Then, put a price on it. There is always room for negotiation, but your negotiating position is much stronger than before.
• Turn Down Better Work — Stop being so needy. One project will not make or break your business. Focus on a good fit with the buyer before you focus on a project. This is not a battle for dominance. We simply need to reset boundaries. (See Proposals)
• Give Permanent Raises — Make employment exclusive and very attractive. A smaller team means they’re more vital to your business. If you’re afraid to pay more because of uncertainty in the future, then reduce team size until you can pay what they’re worth. 
• Use Marketing More Wisely — If demand is up, marketing should focus on raising brand value. If you’re turning down work, then you probably don’t need more leads — you need better leads. Make your “call to action” more exclusive.
• Prop Up Your Sales Force — Eliminate “But they won’t pay that!” from your sales lexicon. Teach them how to negotiate from a position of strength instead of weakness. 
• Manage Your Negotiating Levers — Availability, Scope, Price, Terms — they’re all connected. Teach your team when and how to use them.

It’s a brave new world. Look at your financial situation right now, today. If you’re not reaping record-breaking profits and sitting on a pile of cash, then you’re doing something wrong. This top ten list will get you on the right track.