[A 47Hats Productivity for MicroISVs Tip]

It’s a core part of a microISV’s reality: your to do list is - and will continue to be - a mile long. There simply is a never ending supply of things you can or should do to maintain and improve your business.

So how do you cope? How do you prioritize?

Here’s two ways not to cope - If you are engaging in either of these strategies, it might be a very good time to rethink what you are doing:

- Sort by Urgency. This is the approved way of doing things in cubicle land and all too often becomes the default way microISVs prioritize - whatever is most urgent, whoever is screaming the loudest, whatever bit of information is shiniest gets your attention. There’s two problems with this approach -

• You begin to resemble a lab rat left too long in the electro-shock maze as you bounce from crisis to crisis.
• Critical is not the same as important. Important things - like updating your product, starting your blog, improving your web site are never going to scream for your attention.

- Sort by I want to. This behavior is easy to spot: You make a list of all the hard things you should do today, then ignore all that and do the thing you want to do, be it check out a new program, web site or whatever else is semi work-related. We all do it, but building a microISV requires hard work and this kind of behavior won’t get the job done.

So what is a good strategy for prioritizing all those things you need to do - all the 47 hats you need to wear - to make your microISV successful? Here’s a piece of advice a successful microISV passed on to me when I first started: prioritize by revenue.

Here’s how it works. Of all the things you have on your microISV to do list, what single next action will produce the most revenue or reduce your operating costs? Do that first.

Note I said “single next action” When you sort by money, look first to things you can do, today, where a single task reduces costs or increases revenue. These are your easy targets of opportunity.

At any given time there are tasks that if done, would generate immediate revenue gains or immediately reduce your cost of doing business. For example, it might be putting your product up at eBay for a limited run, or investigating one of the alternative payment schemes that are cropping up, even auditing your electricity usage to get your utility costs lower. The one commonality of all these things is that one physical action leads to improved profitability for your microISV.
Next, take a look at your more complicated projects - they all fit in one of three categories: profit positive, profit negative or profit neutral. While there are times that it make sense to forgo profit in the short term for more money in the long term, working through your profit positive projects first make sense. Identify them, them rank them by number of tasks/hours/difficult and ROI.

Say you need to decide between three projects:

• Project A has 5 tasks, will take 20 hours but increase revenue per month by 8%.
• Project B has 8 tasks, will take 100 hours and increase revenue - you hope - by 20%.
• Project C has 3 tasks, will take 10 hours and only increases revenue by 4%.

Most people will ignore Project C and go after B because it looks like it will make more money. Wrong answer - C should be your first choice. Why? Because the sooner you increase revenue, the sooner you have increased revenue - and that is a good thing! Most people underestimate the time project take - you might actually need 40 hours to get project A done. By getting C done first, you will increased your revenue while you are working of A or B.

It’s a fact of microISV life that you are going to have many more things to do than you have time for. Some of those things you simply don’t want to do and some of those things are urgent but unimportant. By sorting and resorting your microISV to do list by revenue impact, and doing those things that make you money fastest, you will have a constant beacon to chart course by that will not let you down.

[tags]microISV, microISV tip[/tags]

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