“There are a million things that people think we should do and it would be great If we could do them. But we have limited resources,” James told me.

James is a friend that owns a coffee shop. We were discussing the challenges of growing a small business.

The biggest obstacle to growth for him is capital. Cash for a refrigerator, new products, branding, a better barista bar, and a new location. In terms of surmounting that obstacle, there are lots of tactics that could make a difference. But there’s little clarity of what will make a difference.

“Let me show you something,” he told me, and brought out a dry erase board showing various initiatives mapped according to their impact on profit and revenue.

I immediately appreciated this, because I use a similar tool when I’m evaluating. But my favorite comparison is impact versus ease. I did one for James and that looks like the below.

Ease versus Impact

Because revenue is a component of profit, James version helps to discriminate what activities might improve only one of those.

My version is a relationship between different dynamics. It helps to detect 80/20 imbalances. I’m looking for something I value against something I don’t: easy things that have a big impact.

My favorite is impact versus ease, but depending on a specific situation, there are other qualities that can inform the dimensions like: speed, risk, cost, profit, cash.

For James, an alternate version might be cash versus time, mapping out how long activities take to generate cash. The sooner he can invest in a capital improvement, the sooner it will improve his earning power and diminish the challenge of being cash constrained.

These simple exercises help to get clear about the best places to focus. They reduce the million things to just a few.

Several years ago I showed this tool to a friend who ran a t-shirt business. Like me, he was a Marine, and he remarked that it surprised him because it had that Marine-like simplicity and effectiveness. The next time I talked with him was a year later and he had nearly tripled his business and crossed a million dollars in revenue.

Was that related to evaluating using this tool? I like to think so.

The featured image is of Alexander cutting the Gordion Knot. By Jean-Simon Berthélemy (1743–1811) used under Public Domain.