What is revenue throughput?
When B2B owners are faced with a revenue plateau or backsliding sales, they often (and understandably) believe that they must have a sales or marketing problem.
But that's only a part of the picture.
When your business surpasses the $2M in revenue, things begin to get complex, right? You have staff, production space, multiple product lines to manage. Your business begins to operate more like a system than, say, a lemonade stand.
To only focus on your sales and marketing activities ignores a whole host of factors that might be also be impacting your topline. That's why we focus on your revenue throughput.
- The volume and velocity that your business converts opportunities into revenue.
Your business is a system.
Years ago, before I launched Value Prop, I worked with my good friend and mentor, Doug Crisman. We were working with several small businesses, mostly to help them grow their revenues and profits. Again and again, we encountered the same issue.
Owners often approached growth as a function of their sales and marketing. But there were, in fact, many other processes that were having an impact on their revenue as well. We realized that each and every business is really a system—one with many parts—that is first and foremost designed to produce revenue. That means every part of the system has to be "revenue-focused".
A few years later, I was working on my MBA at Villanova University and saw these same principles in the five semesters of Systems Thinking that were at the core of our curriculum. In the years since this view has driven everything that I’ve done with Value Prop and our clients.
Find the constraints.
Imagine your business is a pipe with eight valves. Each valve represents a process of your business (or your "revenue system"). Each valve has the potential to "bottleneck" or constrain the revenue that flows through your business.
After working with dozens of B2B companies, we determined the eight valves, or processes, of a business that impacted revenue are:
- Leadership & risk
The Revenue Throughput Analyzer
So, back to Doug and me. With the realization businesses were in fact “revenue systems”, we set about the work of creating a tool—a schematic, you could say—to help us optimize it. This led us to develop the Revenue Throughput Analyzer.
The Revenue Throughput Analyzer is a unique diagnostic tool that allows owners and their leadership teams to determine which processes were contributing to or constraining revenue. By using RTA, owners get an exact roadmap of what they need to work on to unlock growth.