How a Portfolio Mix Creates Digital Revenue Mastery | Business-Accelerated®

How a Portfolio Mix Creates Digital Revenue Mastery

By ellenjharris | Revenue Strategy

Sep 19


How to Mix, Match and Master your Revenue Portfolio

PortfolioMixRevenueMasteryAchieving revenue mastery in a portfolio mix requires planning, strategy and a set of tactics to sustain competitive advantage over time.

Business owners can, at any time, observe real time fluctuations in their asset portfolio.  When advocating for ‘small’ business owners to think bigger, there are few tools available that offer a foundation for bigger business vision.

You instinctively reach for your pro forma, yet is that the right place to begin?  When you establish your business revenue portfolio you was to first reach for a set of portfolio tools.

In corporate finance, macro companies employ portfolio managers whose job it is to make asset allocation decisions.  This means a percentage distribution of resources across bonds, real estate, stocks equities and securities.

Micro and small business owners may not have a portfolio or a manager to maintain it.  What business owners can create is a revenue based portfolio.  A revenue based portfolio is useful as a portfolio management tool to predict how well assets will perform and are performing in the business.

A primary metric in portfolio management is return.  In a portfolio, a return is a profit.  For example, if you run a lead campaign for 30 days then the three required variables used in establishing a return are:

  • Beginning value
  • Ending value
  • Cash distribution

In a 30 day lead campaign the beginning value is the amount invested in the campaign project.

If the project is running 30 days then ending value of the investment is marked and the cash distribution over the 30 day interval is measured as an indicator of performance.

The equation for this metric is:

Return = Beginning value  [Bv] + Cash distribution [Cd] – Ending value [Ev] / Ending value [Ev].

Another portfolio tool is the weight of the portfolio.  As an example, coaches, consultants and other business owners requiring an initial investment in service in the form of a retain can use the formula this way:

Weight = investment held in retainer / investment value of the portfolio

When constructing your portfolio to use as a performance metric, some owners consider the industries in which their clients do business.  They may categorize their projects by industry.  Since each client is different no one service suites all.  Savvy business owners might build personalized services from category list or menu of services.

One last metric to consider in developing your portfolio is the moment when you find you must juggle several projects at once.  Sticking with our Portfolio Tool illustration, you want to build your portfolio such that you can manage your portfolio through your dashboard.

In your business you may have 3 projects come into your business with investment points of $25,000, $60,000 and 38,000 respectively for Projects A, B and C.

In this scenario the investment is in the denominator and the Project variable acts as the numerator.

The total project investment is $123,000.  Divide each Project investment amount by the total project investment amount to achieve a weighted result small enough to manage and easy enough to subtract from the number 1.  Using this method to manage multiple projects means you reduced your chances of being caught by surprise with a sudden shift in cash flow.

The portfolio format is not dependent upon a service upgrade in your portfolio or a discontinued product or the introduction of a newly released or even an enhanced product or service.  Consider the Adobe® Product Suite upgrades, discontinued products, internal merger and acquisition of products and product teams.  It is the value of the portfolio tool method that allows you, the business owner to maintain consistent control over the strength and performance of the portfolio you design create and manage.

The Portfolio Tool is just one of several deep discovery tools you will explore in our Revenue Strategy Blueprint program.  This program reviews 23 revenue streams to run parallel to your existing revenue streams.  You can also integrate the best high performance systems into your system and achieve measurable and controllable results in your business.


About the Author

Ellen J Harris leads the Business-Accelerated Company. The firm is a C corporation specializing in Intellectual Property, Intellectual Capital and Intellectual Revenue Assets. Harris is a frequent guest on Blog Talk Radio, contributes to the NYU School of Entrepreneurship as a Business Consultant Coach in the $300K Entrepreneur Challenge and serves on the Advisory Board at the Lubin School of Business at Pace University. In her current portfolio, Harris leads three local U.S. Startups and one international startup launching in the second half of 2018. She serves small businesses in a variety of industries. Harris helps business owners maintain their compliance with federal requirements and most recently compliance with the European Union's General Data Protection Regulation.

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