I outline below the steps to a better business that will work without you. Imagine you calling the most senior person in your business and telling them you are going away for 3 months and will not be contactable.
What business will you come back to ?
After reading the article you will learn how to make the business you return to a prosperous one giving you a passive income.
Here goes the first step to a better business.
Step One is Mastery – Mastery
Mastery will take a business from chaos to control.
There are 4 parts to this step:-
- Destination mastery
- Financial Mastery
- Delivery Mastery
- Time mastery
Destination Mastery
Imagine boarding a flight and the pilot does not know the destination.
Which direction will he go?
How efficient will he be with decision making?
Most business owners do not know their ideal day in five years’ time and so, do not think about how to achieve it.
The ones that do are more focused and exceed their peer’s expectations.
In the 70’s when Bill Gates dreamt of a PC on every desk many doubted this would be achieved. The vision gave him the focus to plan and produce measurable goals to meet the plan.
What is your ideal day? Where do you wake up? What choices do you have?
If you think hard enough to gain clarity on what will most make you happy, you are closer to knowing what the business will need to generate to make this happen. Business owners with a clear vision create better businesses!
This can provoke thinking into what short term goals are needed to move towards this dream and brainstorming into how to achieve it.
Have you ever bought a new brand of car and noticed more of that make on the road?
Has everyone copied you ? Or is it you are more focused on this brand.
Focus, therefore, can guide you to your chosen path as you will be more aware of what is needed especially, if the goals written are measurable and tracked regularly against actual results. Better business results come from focusing on the journey as well as measuring the outcome.
If your dream was to spend six months a year in Sydney by the harbour to avoid winter. How can you achieve this?
Financial Mastery
A lot of businesses grow and have real issues. Often it is because the owner upto now has managed profits and cashflow in their head and growth has meant this is no longer possible.
Financial mastery needs to be achieved well before this growth to ensure this will not be a backward step.
Producing a monthly profit and loss account and cashflow forecast will help.
Reviewing the information and helping spot future issues well before they become costly is a key benefit.
A good example of this is companies that record the gross profit percentage per types of products sold. Any significant variance in this metric can lead to any of the following being identified.
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- Excessive discounting by some members of the sales team keen to hit a sales target. Often controls need to be put in place to stop the discounting. These can be that a more senior manager needs to sign off discounts. In many cases, when this happens it shows that sales training is inadequate in the organisation. Too often businesses tighten controls, but do not identify the training need.
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- Data entry errors. I used monthly profit and loss accounts to spot that a business was converting Euro invoices twice in error. This error disguised the over ordering on some of the purchasing team.
- Bad buying. Analysing gross profit trends can identify stock levels that are high compared to average purchases. This can help focus on areas that show where the problem might be. Problems such as buying goods that are not selling, high amounts of damaged or stolen goods can be identified from this review.
Producing a budget or a forecast profit and loss account can be very powerful.
The process of producing these reports forces owners to think of all the interdependencies (E.g. if I need to increases sales in September I need to have 3 extra sales people and so I need to start the hiring process in June). When owners plan in their head key areas are missed causing crisis management.
An example of this is where owners hire too quickly because they need someone now. The neighbour’s brother is hired because he is available rather than being a good match to a well thought out job spec and interview process.
You do not need to be a qualified accountant to do financial mastery. You just need to have some accounting software or ask a bookkeeper to set up a template in excel for you to follow.
Failure to do it can result in attempted growth leading a business to bankruptcy in extreme cases.
There you go – Financial mastery to a better business.
Step Two is Niche-Profit growth.
- Record and regularly review call waiting times and abandoned calls. This data can help identify ways to improve the customer experience. Changing rotas or multi skilling staff can help with this.
- Staff training on how to convert calls to sales. This is can be enhanced by a process where call recordings of the best sales person are shared with follow up role plays.
- Introduce a formalised sales process. If we map the customer journey from the call to a sale and test each stage for effectiveness, we can quickly identify opportunities for improvement. (e.g. is it best for the staff member receiving the call to make the sale, book an appointment or schedule a call back with a member of the sales team?)
- Stop the advert that does not work.
- Chase outstanding debts (reduces bad debt expense)
- Challenge your book keeper to find a 10% reduction in costs.
- Analyse the productivity of each staff member with regular reviews. This can lead to a change of roles and better staff motivation, reducing staff attrition rates. This is enhanced if staff ideas are heard, implemented, where appropriate, with the relevant recognition.
Step Three To A Better Business – Leverage
The articles outlines the Step 3 to a better business that will work without you. Imagine you calling the most senior person in your business and telling them you are going away for 3 months and will not be contactable. What business will you come back to? Learn from this business coaching.
So far in my business coaching ideas we have covered Step 1 – Destination Mastery and Step 2 – Financial Mastery which has been covered here in great detail.
What’s next? Step 3 – Leverage
Systems
This step builds the foundations to make the business less dependent on the owner.
It also helps look at the efficiency of every task and produce more with less man hours.
How do you start?
Firstly, look at every task that happens every week and document it either in word, audio or video whatever is relevant.
E.g. – Sales – who makes the calls? What do they say that gets the best result? Document by written scripts or video recordings of role plays amongst staff or live prospect meetings with permission. This is an important business coaching tip.
Flowchart the sales process and invite feedback on whether each stage is performing well and are they any redundant or missing stages.
If you take on a new employee and they have the above information, how much shallow is their learning curve?
How many less hours does the business owner or head of sales need to be involved with this approach.
The process of systemisation forces a business to find best practice and share it with all the team.
I have seen this process alone add 10% to sales via some systematic business coaching.
Technology
How can technology give you the information to make better decisions or save time?
If you are in retail and you do not have an EPOS system you have an opportunity to substantially grow profits. Such a system will give the information in minutes that takes hours to produce.
You can also have a better handle on staff, product and department performance with more information. Slow moving lines will be identified quicker and sold on. A good leader with skilled business coaching thoughts will encourage staff to set their own targets and measure their driving performance.
If you have a high number of customers then a CRM system is a must. It will give you the same benefits that an EPOS system gives retail.
I have seen profits grow by 100-600% using the above.
Delivery and distribution
If you document your customer delivery process it will help track issues quicker by greater transparency. Any business that has significant customer complaints that reoccur needs this in order to stop fighting fires.
Staff KPIs
Asking staff to set KPIs that you sign off will focus the team in the right areas. Some monthly business coaching and a weekly team meeting can ensure accountability of this type will drive this.
People and education
Regular training and documentation of recruitment and review processes will help improve staff retention and hiring success.