Why would you hire a Business Coach?
Even if you are doing well in your business, there is always room for improvement. If you are not doing well in your business, there are always ways of becoming more successful. Who do you converse with to have sincere conversations about your business in order to get objective feedback? Inquiry is how we gain knowledge. Who do you ask in order to receive purposeful feedback? Where do you go when you want to access a proven toolbox of strategies that increase profit, increase cash flow, and free up more of your time?
Through working with over a hundred businesses over the last 10 years, I know that it is possible to generate dramatic results. That is, if you gain the knowledge that there is a way that you could be doing things smarter to allow you to gain the edge in some way. Let us have a 15 minute conversation to see where it goes with no obligations and if out of the talk, you hear something that resonates with you than we can explore things further.
Keys to Your Business Success
I work with business owners who want to create more free time and more cash flow!
Whether you have been in business for a while or are just starting out. Whether you have had much success or no success- regardless of where you are at, the principles and fundamentals provided will apply to you. The outline I use to work with clients is not complicated material – when approached in the right way, results are guaranteed if you do the work. Not to say it will be done without effort but it is definitely not complicated.
I have had the pleasure of owning my own businesses for nearly 27 years. I am a small business owner, entrepreneur, business coach, educator and real estate investor. Success to me is in “a thousand details”, an organized effort and attracting like-minded people. Being successful includes fostering a proven business model and cultivating excellent business practices that embrace a complete follow through on commitments. I subscribe to the philosophy that “great businesses planned to be great”. I work with Small Business Owners and Real Estate Investors that would like help in their entrepreneurial journey; from start-up, growing to the next level or preparing an exit strategy.
My smallest clients are doing $250K of sales a year and largest client does $50 million – and this is irrelevant to the underlying principles and methodologies in this presentation that underline every business on the planet.
The Rules of the Game: there are certain principles that must be followed on your way to success…
Are you working – Above and below the line? example: I worked with a gentleman who was my shortest coaching engagement yet. He had trouble recruiting salespeople – he had 3 on board, but no one really worked out. The first one left on a job up north and never came back, the second one found a better opportunity and left, the third was with him for a year and a half BUT hadn’t sold anything. My client came off as a real confident guy. When I asked what he thought the common thread between the three, he replied “They’re all idiots”. When I asked who had hired, trained, and motivated them, as well as what his part in it was, he took offense and never came back- full of blame and excuses.
We can blame and make excuses for why things aren’t working, or we can take responsibility for our actions and take ownership of the results that we are creating. In order to make more money and free up more of our time, we have to be able to point the finger at ourselves, if we can do this, then we will move forward.
I know- example: Often we think we already know everything we need to know. Teenagers think they know everything, when you try to tell them something, they often think they have all the answers, “I know, I know, I know”. As adults, this doesn’t change, though our responses do. We tend to respond with “I know”, “I’m familiar” or “I’ve heard this stuff before”. When we say these words we close our minds to learning. Eliminate “I know” from your vocabulary and if you want more time and more profit, you’ve got to learn more. Learning means investing time and money. A lot of business owners don’t want to take the time to read a book or watch a video, but it’s a catch 22 because if they don’t want to invest the time and money then they cannot expect to move forward.
Sometimes at the grocery store while in a long line, you move to another line that is moving quicker, but as soon as you change lines your original line starts moving faster and the new one starts going slower- sometimes this happens with entrepreneurs. We see something new and exciting and we jump from one idea to the other and never put full time and effort into one initiative- “Get in line and stay in line”, stick to our focus and give it 100% effort. If you have 1 initiative it gets 100% attention. If you have 10 initiatives they each get 10% attention- effort in doesn’t always equal effort out (e.g. 50% in might mean 15% out). You need 100% full focus input order to get 100% output.
How to grow our business- example: a ship that is designed to get from point A to point B (just like any business) the ship must know where it is going because if not it will end up on the rocks. A good Captain knows their destination and the route they are going to take. The same thing applies in business. Often we go into work and chip away, one day we might look up and think “where is this going?” You must have a idea or goal in order to distinguish priorities.
What goes into the plan of your business? – There are 4 main “cargo holds” of the ship that is your business, they are:
Money– Margins and Break-Even Point- what is the break-even point where we are not losing any money? We are paying ourselves and covering all of our expenses, but there is nothing left over. This gives us a sales number that we need to be hitting at all times to at least know that we are not going backwards. It is a good idea to set a break-even number with the profit you want to make built in to that. example: I worked with a baker who was not a big numbers guy, he agreed that they would set a number that we would be a target to hit each week. This simplified the process and allowed him to be conscious of his margins- a lot of businesses don’t have their margins (prices) set properly, so when they grow their business, they actually end up going backwards.
Cash Flow allows us to understand how much money we’ve got going into the bank- receivables, inventory, and payables are 3 factors that regardless of profits on our income statement, will make your bank account look differently. Work this out with a cash flow forecasting tool, given certain assumptions and sales volume, our bank account will look like X in X number of months. The sleepless night factor- the two things that keep business owners up at night are cash flows and people- cash flow is very important.
Reporting– 3 statements that we really look at: 1. Income Statement (Profit and Loss) 2. Balance Sheet 3. Cash Statement- many people just look at the Profit and Loss, you really can’t tell much about a business based solely on a Profit and Loss, have to look at the Balance Sheet and Cash Statement to really understand what the numbers are telling us. You don’t need to be an accountant, you should want to be a sophisticated business owner. This means you will be able to look at all of your numbers and know which ones to draw on in order to run a better business. Know the key numbers and the trends that exist, this way you can sit down with your accountant each quarter and have an educated conversation and you won’t be overwhelmed by what they are telling you.
Investing– when we have an excess of cash flow in the business it is important to know what to do with it (reinvest back into the business?, draw it out of the business?, pay down debt?, buy additional assets?). Drawing out and paying ourselves is not always the best alternative- having a plan will allow you to be more knowledgeable about to grow your business.
Growth– sales and marketing stage- first step is understanding your USP (Unique Selling Proposition), what differentiates your business? If you had an ideal client come up to you and ask how you are different from your competition, what would you say? Your USP is not appealing to everyone, it is only appealing to your ideal target market. So, you need to know who your target market is (you’re not trying to sell to everyone). “If you try to sell to everyone, you are selling to no one”- your USP justifies the price you sell for.
Measuring– marketing is about working out the math behind how you get customers. Figure out how much it is to get a customer and what that customer is worth to you- example: you invest $1000 into marketing over a year and you get 10 customers from that, this means you have paid $100 per customer and you need to make sure that customer is generating more than $100 in return in order for you to get the most out of your marketing investment. Keep track and measure your acquisition costs of obtaining a new customer to make sense of how worthwhile your marketing is and understand what the lifetime value of your customer is. Before embarking on large scale marketing, do a small scale test to see how effective your idea is- example: basement water proofer (Ray) spending about $7K a month on yellow pages, when asked if it was working for him, he replied “I think so, yeah. We seem to be getting a lot of business from it”- they decide to measure it and find out that what he brought in didn’t justify what he was spending on it, instead they tested 3 different flyers in a year to see which one was most effective. When they found out which one, this one became the yellow page ad the next year- Ray found the areas of marketing that generated the most business for him and focused on them which led to about a 300% increase in response rate in his yellow page advertising.
6 Point Profit Model- 6 key areas that can affect our business: customer base, revenue, profit- customer base is impacted by:
1. Target Market, Trading Area and creating Leads (marketing)
2. Conversion rate (% of leads that buy from you)
3. Attrition rate (how many customers are we losing)- revenue impacted by
4. The average amount spent per customer- profit affected by
5. Gross margins (cost of good your GOGs or service being supplied to our customer)
6. Operating Costs – Overhead number (what are we spending on the fixed costs of our business)
Understanding the 6 point profit model– have a chart with customer base at the start of the year, the number of leads, the conversion rate, number of new customers, the attrition, the customer base at year end, amount spent per customer, revenue, gross margins, gross profit, overhead, and profit listed- within this list compare Business as Usual (BAU) vs. Proactive approach (small tweaks to increase profit) Small changes can lead to large increases in profit compare profit between BAU and Proactive approach and find the difference between the two. With most businesses this process can differ and does not have to be followed sequentially. Some elements may be easier to enhance than others- focus on a few elements to tweak and test in a quarter and do this to different elements each quarter and over time these changes will add up to big results.
Brand Development– most small businesses do not have massive budgets to do branding. It is a waste of money for small businesses to spend money on radio and TV ads in the hopes of getting brand recognition. Most effective advertising is direct response advertising that gets customers to pick up the telephone and call you. Use direct response methods to bring in customers and then service the heck out of them so that they go on to give your business raving reviews. If you are in a situation where you have excess cash and a good customer base, then you might be able to use leverage to use radio and TV methods.
Operations– most often the side that you feel you have the most amount of expertise in is- Time Mastery- What are we doing with our time that will give us the biggest bang for our buck? What 3 things in your business would you choose to do that you could leave for the rest to other employees at your business? Hopefully you pick the things that will add the most growth and value to your business (marketing, working with your team, going after higher level strategic customers, etc.) This allows you to think about what you’re doing with your time right now. The 80/20 rule – 20% of your things give you 80% of the results. If you spend 80% of your time on those 20% of activities then you will move ahead with great momentum. This principle forces you to think critically about what you are doing now and how you can break out of old habits because many habits don’t add a lot of value to what you are trying to accomplish.
Roles and Responsibilities– everyone in the business needs to be clear on who does what and there needs to be a chart laid out describing that. If it is not clear on who is doing what, then there will be accountability issues. Lack of clarity leads to lack of results. Define the results that need to be generated by each role so that things are crystal clear and employees are held accountable to a certain standard.
Workflow– as you work on things and when a sale is made you need to thoroughly understand all the steps involved that allowed that sale to happen- map out these steps in a flow chart so that everyone, in every role can see what needs to happen.
Systems and Technology– How do we use these to leverage ourselves? – Creating systems so that things happen consistently and using technology to make things happen faster- doing more with less- example: customer management software to keep record of all your customers details and history of conversations and purchases, this saves time in the future when wanting to know about a specific customer.
Team– people are the biggest part of business. To be good with your business you’ve got to be good with your people and your numbers. If you get those two things, then you get all other aspects of your business.
The 5 P’s
Purpose– if you expect people to give more of themselves, then you have to be able to tap into the heart and passion of someone by getting them to work towards a purpose. Aligning an individual’s purpose with your business’ purpose creates an ideal situation. Create a business purpose and share that with your team so they understand that there is purpose and what that purpose is.
Position– everyone needs to know their position in the business.
Plan– every business needs an action plan, how you will move forward? Every individual needs to know their role within that plan.
Progress– how do your team members know when they progress? What feedback mechanisms are there? How do they know when they are doing the right things?- how do you develop/coach your team so that you know they are moving forward.
Playing rules– culture of your business- example: sports- there is rules on how to play the game, every good team has guidelines on what they expect from their players. Business is the same, there are standards for behavior, the way we treat each other, the way we treat ourselves, the way we treat our customers- which are core values.Every business should have 2 or 3 of them that everyone is familiar with. Define what you want your business culture to be. You will attract the right people by your playing rules.
Recruiting– most small businesses use a similar process by putting an ad in the paper and receiving resumes/applications-. Owner will look things over, call references, do interviews, and make a hire- this process has a 14% success rate. I tell clients to use a “4 Hour Hiring Process” that only takes 4 hours of their time and hires the right people. Get clear on the ideal candidate, write an ad nothing like a typical ad in the paper (marketing and being attractive to ideal candidate), get as many applications as possible, after application is sent in they have to call in and answer 5 questions over a voicemail. Doing so you will find out a lot about that person and only about 30% (those who are most serious) will actually call in and answer questions. From the answers you will get a group interview together with key team members and pick the top 1 or 2 people and bring them in for a 1 on 1 interview and run them through a test drive (job simulation), run assessments to find the best job fit- “4 Hour Hiring Process” has an 80% success rate.
“If you can learn to run one business successfully, then there is no reason you can’t run any number of businesses at the same time…the principles are all the same.”- Richard Branson
“Never wish your life were easier…wish YOU were better.”- Jim Rohn
“Work harder on yourself than you do on your business.”- Jim Rohn