From: http://www.bizjournals.com/boston/

“This year I’m going to take better care of myself, exercise and eat right.” These are familiar resolutions that many of us make for our personal health and wellness.

Let me suggest that you add four healthy business resolutions to the list, ones that translate into cash and sustainability: unique market position, value-based pricing, operational efficiency, and smart capital allocation.

1. Unique market position

This requires discipline because it means saying no to certain potential customers. In this instance, unique is synonymous with valued. We want a market position where what we offer is both unique and valued by specific customers. This narrowing of focus on select customers helps us direct resources where the ROI will be strongest.

Once we narrow our focus, we learn everything we can about the customers. Understand what those customers truly want and understand what the competition offers. This understanding is the pathway to building a unique and valued market position.

Translate the understanding into a “value delivery machine.” Direct all company resources to deliver what the customer wants. Make the amalgam of resources and activities a “total package” that is virtually impossible to copy by competitors. The result is a customer base that is loyal and inclined to spend their money, which equates to more cash for the business.

2. Value-based pricing

This type of pricing aligns the value that the customer receives with the price they pay, as the customer perceives it. If customers perceive value, they are willing to pay the price. This works because depth-of-understanding identifies specifically what customers value. Deliver on that value, and higher prices potentially become acceptable.

Interestingly, a value-based pricing approach is the pathway to flexibility for price increases. What the market will bear and how competitors react will also impact the ability to raise prices. Regardless, value-based pricing will deliver more cash for the business.

3. Operational efficiency

Because every dollar lost or wasted in operations is a dollar taken directly from the bottom line, optimizing operational efficiency delivers cash.

One suggestion in this area is to involve employees so they understand costs, processes, and what occurs each day in order to produce and deliver products and services. They do the work every day. They will most likely know what can and should change in order to improve efficiencies.

4. Smart capital allocation

So, a unique market position, value-based pricing, and operational efficiency delivers a strong customer base, maximized margins and more cash. What we do with the cash directly impacts the sustainability of the business. It’s decision time.

Do I reinvest the money in the business or distribute cash to employees? Do I take the money out as earnings or return the money to investors as dividends? Do I place the money in some outside investment vehicle?

Clearly, the answers to these questions are not simple, but they are important. Seek whatever advice is needed to make sure decisions in this area are informed and rational.

Maintain these healthy resolutions. They evolve into best practices. Strong growth and increased cash will follow.