Major disclaimer: There is more to life (and business) than money. 

Also true: It's no fun running a struggling business. A business model that is naturally profitable can decrease stress. 

Back Story

In the summer of 2004 I worked as an internal auditor for a major US corporation from Wisconsin. My job was to fly around the country examining operations at the company's branch offices. I loved it.

As part of each audit, we asked for a list of the 5 or 10 highest paid employees at the branch. Can you guess which occupation routinely dominated the list? Engineering? Finance? Operations?

Wrong, wrong, wrong. 

The correct answer? Sales. Salespeople dominated the Top 10. It was true in 2004 and not much has changed in the 19 years since then.

You: What does this have to do with new business ideas?

Answer: Quite a lot. 

Look at an Income Statement 

Salespeople impact the top section of the income statement - the Sales section. That is why they get paid so much. This point is so simple it's borderline self-evident, yet it's extremely powerful. 

Imagine a salesperson and a janitor at Bob's Alligator Farm (the fictitious QuickBooks experiment company at our firm). 

• The salesperson performs a day of work and is paid $500. Sales-Farm Tickets increases $2,500.

• The janitor performs a day of work and is paid $200. The farm is clean at end of day. 

Both employees worked hard and performed a valuable service. However, the average business owner will:

1. Believe the salesperson created substantially more value than the janitor. This is true even though the salesperson was paid 2.5X more than the janitor. 

2. Encourage the salesperson to work more hours to generate even more sales. 

3. Encourage the janitor to work less hours while still keeping the place clean. The goal is to minimize Repairs and Maintenance expense. 

It seems unfair, but it's simply the reality of an income statement. 

Occupations that impact/increase the top-line Sales section have a natural tailwind. In the above example, the salesperson's $500 wage was 5X offset by the $2,500 increase in Sales. 

Occupations that impact/increase Expenses have a natural headwind. The janitor may have done a fine job, but the monetary impact is a $200 Expense farther down on the income statement. There is no obvious tailwind to offset that cost. 

Your Next Business Idea

All else being equal, a business that helps other businesses increase top line sales will have an easier go of it. 

For example, the following business models have an intrinsic tailwind:

1. Sales coaching and consulting.

2. Website optimization (especially SEO optimization).

3. Marketplaces (e.g. auction houses, Upwork, LinkedIn, etc.)

These are just a few examples. Really any business model where you can say "Pay me $300 and I'll generate $1,000 in sales for you" is a very powerful idea. 

This concept is simple and effective, but often overlooked. 

Not Only for New Business Ideas

Offer Enhancement: Indirect Link to Sales

Let's say you run a company that doesn't directly increase your client's sales. You can still enhance your offer by highlighting an indirect link to sales. 

For example, considering the following:

1. Robotic automation machines. Pitch: "We enable your company tosell more products without adding more production workers."

2. Job costing software. Pitch: "We help your sales team focus on selling profitable projects by using accurate cost data on past projects."

3. Outsourced payroll services. Pitch: "We free up your time so you can grow your business."

Decreased Expense vs Increased Sales

Maybe you're thinking: What if my offering helps companies decrease expense rather than increase sales?

That can be a viable approach. 

However, there are at least three reasons it's still the second-best path:

1. Decreases in expense are buried farther down in the income statement. They aren't immediately obvious like an increase in top-line sales. 

2. Expenses, even if smaller, still take money out of the company. Sales bring money in. Huge psychological difference. 

3. Decreasing expense for a customer can plunge you into a price war. Oh, you do snowplowing for $40? Your competitor just said they can do it for $35. It can quickly lead to a race to the bottom. 

In the snowplowing example, the stronger approach might be to focus on speed (e.g. guaranteed plow by 8:00am store opening) to help your client have happier customers and increased sales. 

Employee Growth

Back to the janitor example. Is there a way for the janitor to "move up the income statement" and capture the sales tailwind? 

Absolutely. 

If you are an employee in a non-sales position (or a mentor of such an employee) there is a highly underrated approach that can 2X or more increase the value of the role.

That secret is to link the role to increased sales. 

Here's how the janitor could use a sales approach to drive incredible value to his company (and ultimately, himself):

1. Janitor to Owner: "I've heard that people judge a company within the first 50 feet after they come in the door. Should I spend 20 minutes every morning keeping the first 50 feet spotless?"

2. Janitor to Customer (in reception area): "How is your day going? Can I get you a cup of coffee?" 

3. Janitor to Service Manager: "I see Joe's work van got really dirty on the last service call. Should I give it a quick wash before he goes out on the next call?" 

In each case, the janitor is moving his impact from the Repairs and Maintenance Expense section to the Sales section of the Income Statement. 

That upward shift is the simple key. 

TLDR:

1. Sales-based offerings benefit from a natural tailwind.

2. Therefore, when launching a new business, consider a model that increases your client's sales. 

The natural tailwind can also be used in other ways:

1. A company whose offering doesn't directly increase sales can still improve their offer by highlighting an indirect link to sales. 

2. Employees in non-sales roles can greatly increase their value by finding ways to use their role to impact sales.