Karen bought into a small business in her community because she thought she would love the thrill of owning a company that she believed espoused the values of her good living lifestyle. Having given up a good paying but boring government job, Karen was at first enamoured by the
business and the lifestyle, but soon reality set in. Though she thought had fully investigated the business before she bought in, Karen soon found out that things were not quite as they seemed. While the business had decent revenue numbers, the company was losing money. Karen went right to work to turn things around. Karen toiled hard to get the business profitable and worked in two areas, margin and labor costs. In a period of 6 months Karen increased the margin from 35 to 37% and reduced the labor costs from 22% to 20 %. These changes which took some dedication to achieve, turned the business around and moved it from a failing business to a profitable one. Karen admits that she still has some work to do but has literally climbed out of a hole and is moving up towards the treetops.
Climb to New Heights with Your Business using these 7 Techniques:
1. Create a Plan to Get Focused and Primed for Success – Troy was drifting along with his plumbing business when we first started working together. Like many business owners he was running a business but not focused on the key elements that would enable him to take his business to the next level. This commitment starts in the mind, believing in yourself, believing that you can be successful, that it is possible to have a decent income and a balanced lifestyle. Once Troy was able to recognize his potential and make a mental commitment to his goals and the steps necessary to his success, the rest came much easier. Troy started working smarter and doing more of the things he enjoyed doing and was good at. The results were significant. Troy was able to enjoy a much larger income and work with clients who appreciated him instead of those who drove him crazy! Making a commitment to owning a profitable business and not just committed to being a business owner, are two different things. Creating a plan and remaining true to it will take your business to new heights.
2. Build a New Business Strategy - John’s construction company was following the tired model of bidding for work in a competitive market. Times were tough and the work was not coming in as it had in the past. John had troubles because he was not one to spend time networking in order to dig up business. As he told me, he was unsatisfied with building dreams for others and wanted to start building his own dreams. Those dreams did not include the constant looking for work and bidding unsuccessfully on jobs. John adopted a new strategy in which he would presell and build projects where he was able to control the outcome. This change in focus would elevate his business to new levels and allow John the time he wanted to spend on projects outside his company without worrying about always looking for new contracts to keep his employees busy!. What are you doing to think outside of the box? How can you do what you love with less stress and at the same time make more money?
3. Leverage What You Already Do! - In his article Nine Drivers of Upside Leverage, (2002) marketing legend Jay Abraham talks about how as business owners we can take our business to the next level by making small changes to what we are already doing well. If you are advertising and getting a 2% response rate concentrate on making changes that will get you a 4% or 6% response. What about concentrating on conversion rates? Whether you are working online or in a brick and mortar store, getting a 1 or 2% increase in the number of people that you can convert from browsers to buyers can make a huge difference to your bottom line. What can you do that will engage these browsers and turn them into buyers? Think of all those things that you already do and figure out ways on how to improve them?
4. Invest in Your People - Chances are that you have some great staff, but when was the last time that you spent money on taking them to the next level? How much a training course in sales would cost you to put on for your staff? How long would it take you to recoup those several hundred dollars if your staff was able to sell 5%, 10% or even 20% more? A day? A week? Or even a month? Consider training key team members in customer service, digital marketing, technical skills training or even bookkeeping. Investing in our people often takes our business to the next level.
5. Bump Your Margin - In my book Profit Yourself Healthy I looked in depth about how you can work on improving your profits by increasing your margins. The reality is that many business owners don’t charge enough for their products and services and often don’t make enough margin to keep their business profitable. Like Karen, making small changes to your margins by maximizing your savings from your suppliers, taking advantage of buying opportunities, or increasing your can make a huge difference. Most customers don’t notice a price change that is less than 12 or 15%. By changing our parameters around our pricing structure we can often take our business to a new place of profitability and success. What is holding you back from thinking differently about your pricing model?
6. Communication is Key – Believe it or not, improving your communication can take your business to the next level. The biggest complaints of employees is that there is poor communication between the management and the staff. Look at it this way, as owners we have a vision of where we want to take the company, yet how often do we talk about that vision with our staff. Of course, we want to make more profits or increase our margins but we need to communicate how this is going to transpire and have a real discussion with our employees about what they need to focus on and why. If our employees hear us talk about profit all the time but not about people then we lose credibility. In communicating clearly our objectives and the expectations we have of our staff and employees we provide the building block to enable us to grow.
7. Implement Systems – Whether you want to do it now or in the future, at some point you are going to want to step back from your business. This may be at the point you sell the business or perhaps you just want to start living the dream. In the book Profit Yourself Healthy we talk about the need to systemize your business so that each and every time your customers interact with you, they get a consistent and reliable experience and you as the owner are able to count on your business to deliver that. When we systematize, three things happen. One you get a business that is able to operate and make money when you are not even around. Secondly you get a business that is more valuable for prospective buyers. Thirdly and perhaps more importantly is that when we have systems in place our staff know what to do and what their expectations are. As a result, we don’t have to micromanage them.
Building and growing a business can be hard work. Knowing where and how to get your businesses to be profitable can be just as challenging. We know that 60 % of businesses have difficulty in this area. By focusing on key areas and taking initiatives that are different from those you have taken in the past you can achieve success and profitability that provide more freedom and less stress for business owners and take your business to new heights.
Dave Fuller, MBA is an Award Winning Business Coach and the Author of the books “Profit
Yourself Healthy” and Pivotal Performance. email your comments to firstname.lastname@example.org.