How are you looking at it?
|Today was the absolute worst day ever
And don’t try to convince me that
There’s something good in every day
Because, when you take a closer look
This world is a pretty evil place
Some goodness does shine through once in a while
Satisfaction and happiness don’t last
And it’s not true that
It’s all in the mind and heart
True happiness can be obtained
Only if one’s surroundings are good
It’s not true that good exists
I’m sure you can agree that
It’s all beyond my control
And you’d never in a million years hear me say that
Today was a good day
Now read it bottom to top.
A Business That Works Without The Owner
I had a wonderful meeting with my landscaper client last week. When I walked into his office, he told me, “Jim, I’m kinda bored.” It’s June as I write this, so this would not be a normal comment.
As a landscaper, this is his season. I’ve known him for years and from March to August, his business booms and brings with it a lot of stress and challenges. He hires new field teams fresh each year, trains them and finds work for them to do. Last year was an especially trying year – business was great but he was doing all the sales and drawings. He was stressed by work and personal issues. It was a pivotal moment.
Last year was a good year and his company performed well. But one of the things I admire about my client is his ability to take time to tear his business apart in the winter and reassemble it based on learnings from the previous year. This past year he added 5 new team members – salespeople, production manager, office staff. He knew that his goal was to have every function in the business handled by a team member, freeing himself for strategic work, team building and client relations. And he did it!
The reason he was a bit bored is because there are few demands on his time.
He is free to visit teams in the field, follow up with clients and review marketing. His business runs without him, allowing him to build his business even more. This is exactly what ActionCOACH focuses on – helping business owners to build a business that WORKS FOR THEM, rather than them working for their business.
I encourage you to look for ways to make yourself a bit more bored. Because in those moments, you will begin to look for larger opportunities, review your systems and find ways to do amazing things. You won’t be bored for long!
Business is basically shopping for customers – choosing which one you want and deciding how much you will pay for them.
When it comes down to it, you are in the business of buying customers. You can start a business, run it from home and never tell anyone about it, but you will not succeed because you need customers to buy your product or service. And customers will cost you.
You may need to have a location people can find you – a bricks and mortar store or a website. These cost money.
You may need to meet people to tell about your business. You will need to drive or fly or hold webinars or attend networking groups. These activities cost money.
Or you may advertise, hire a sales person, or do email marketing. Again, these all cost money.
So, we spend money to get customers. We are buying customers.
So how much will we pay for a customer? What is a customer worth to us? We can calculate this amount based on our average sale and profit margin. Our Acquisition Cost is how much we spend per customer. Often this is our Net Profit divided by our customers.
Sometimes we will spend more than this amount, however. That’s why we look at Lifetime Value. If our customers buy from us more than once (and you had better have a plan to make this happen!), we may want to spend more than the profit they bring in in one visit because they will spend much more in the future. Calculate the average number of visits a customer makes and multiply by your average profit. This strategy is a Loss Leader strategy – just make sure you KNOW you will get them back for subsequent visits.
Take a fresh look at your business – are you clear on what a customer is worth to you? And do you understand your role is buying customers?
As an ActionCOACH, we focus on changing clients’ perspective and change their goal to a Business That Works Without Them. Brad Sugars is the founder of ActionCOACH and the author of Buying Customers.
There is a sad story in the Omaha World-Herald today about a local business that is struggling because of a lack of education.
The company sold airline vouchers that weren’t valid. The story says there was not an intent to defraud but that demand simply ballooned and the company did not have systems in place to prevent the problem.
“(the lawyer) blamed the company’s woes on an inadequate business model, adding that the owner was truly sorry for its failure.”
“The young business owner’s model was failing…She had a business model that was great when it was small…As it started to grow…it ballooned, it mushroomed…and she did not have the business sophistication to understand once it reached a certain level.”
As a business coach, I see this all the time. The main reason for business failure is a lack of education, a lack of understanding of business principles. This translates into financial troubles, cash flow failures, inability to service demand. But the root cause is the business owner not having the knowledge they need to operate a growing business.
It is especially telling that this business’ problems began with growth. It seems intuitive that growth should be a good thing – and it is! But growth presents serious challenges and business owners often aren’t prepared for them. Growth almost always requires investment – more money going in than coming out and if owners don’t have those resources, things can go South in a hurry.
I encourage all business owners to be in a state of constant learning – not only about their industry and products, but about business principles and concepts. You must have a plan to develop yourself, not just your business.
Of course, I recommend ActionCLUB, my 6 month power course on business ownership. It’s great fun and serious preparation for growth. Come for a free visit!
“Be the best. It’s the only market that’s not crowded.” George Whalin
Being the Best is a perfect Vision for your company. It’s simple, easy to communicate and inspirational. It will enroll people (Team, customers, suppliers, strategic alliances) and focus them on the goal. And, as Whalin points out, there’s not a lot of competition!
The other big benefit – YOU get to define ‘best’! Fastest, strongest, award winning, longest lasting, tastiest, whatever. You may choose the standard and then focus on measuring and proving your progress towards the goal.
Too often, businesses say things like “we have the best service” or “we beat the competition”. but these are vague, just advertising puffery. If you’re going to set a goal of being the best, you had better be ready to prove it.
Having a Vision for your team is one of the strongest ways to move your company or organization to the next level. Give your Team a focal point and they will move instinctively towards it. Go for it!
Why is intensive-extensive training obvious for the army & navy & sports teams & performing arts groups—but not for the average business? -Tom Peters
“Team” is a recurring theme with me. That’s because the #1 job of the business owner is designing, hiring and developing a Team. The minute a business goes from a 1-person show to hiring the first employee, the focus of the business owner must begin to shift to getting things done through the Team instead of doing it all themselves.
The headline quote by Tom Peters is intriguing – We all agree training is critical for these groups but not so much for our team. Or ourselves! Training in business seems to be fine for those moments when nothing is going on or when we just have to train because we’ve hired someone. But ongoing training for established employees? Well, um, no.
The fact is, training and development of our employees is a great way to leverage our resources!
Productivity increases, the owner answers less questions, customers are happier – what’s not to like? Along with technology and systems, improving our people is a key way to boost the performance of an organization.
But objections to training usually come down to cost – in $ or in Time. Cries of “I can’t be short-handed” or “It’s too expensive.” are often heard. “What happens if they quit?” is sometimes mentioned. But the old proverb of “What happens if I don’t train them and they stay.” rings true. Don’t make excuses, make powerful agents that work for your business.
Training can be done in short bursts – 10 minute group meetings, one-on-one coaching sessions, video training, etc. It isn’t even necessary for the Owner to be there using online resources. It just requires a commitment to development and some time working ON your business to prepare the plan.
Don’t you deserve a Special Forces team working for you? Get started lifting your team to a new level!
The 3 Point Series: The Role of the Business Owner
Here are 3 ways to improve your business this week:
- Identify 8 customer service standards you believe are important to your customers. Ask every customer you meet today to rank them in order of importance to them. Ask them if there are any missing. Spend 15 minutes with a yellow pad thinking about the results of your mini-survey.
- Make a list of the top 5 products or services that generate the most income to your business. Spend 15 minutes considering how these products/services could be improved over the next 3 months. Think specifically, not in general. Seth Godin suggests you blog your ideas.
- With great compassion and honesty, identify which team member is the least productive or most disruptive in your organization. Again, with care and determination, outline a training plan to bring them up to speed or create a plan to help them find a better opportunity outside of your business.
The primary role of the Business Owner is to develop the team members and grow the business through marketing and innovation.
Everything you do outside of these functions is work you’re not paid to do. You may have to do other things, but the goal is always to return to these critical Owner tasks. Your Team, your customers and your family are counting on you.
Take time to focus on these 3 ways to be innovative and Team focused. Your business will be stronger and you will be more effective.
Have you ever had a Mustard Whopper? Or a Zebra Mocha at Starbucks?
Perhaps you often order a Burritodilla at Chipotle…or Poutine at KFC. The odds are that you’ve never heard of these products but they are available – They’re on the Secret Menus of these restaurants.
I was recently reminded of this by my daughter, a barista at Starbucks. She was telling me about all the interesting drinks she prepares. And this discussion became a BFO for me (blinding flash of the obvious)!
Your Secret Menu may be the way to create deep customer loyalty.
The idea of creating a sense of Membership in customers is a key to business success. Patrons who merely buy from you are helpful but customers who feel a connection, a membership, with your business are extremely valuable and this connection can be developed and cultivated, by moving them up the Loyalty Ladder.
In fact, the more connected you can make your customers, the more loyal they become – leading to great testimonials and even referrals. Your customer list is a wonderful asset to building your business.
So how about your business? Do you have a Secret Menu? Some list of services you only provide to the top 20% of your customers? If you did, would that be interesting to your clients? Would they feel special if they were included? Of course!
I’ve challenged you with the concept of a Fantasy Plumbing Team. A Secret Menu is one way to create the connection between your customers and your business. Customer Loyalty is a Big Deal and it doesn’t come from “good service”. Don’t give up being creative in this area.
All business is two things: Innovation & Marketing. -Peter Drucker. How are you doing?
Many small businesses are not good at either of these critical skills. They see Marketing as a necessary evil and spend little time on it and they often leave innovation to large companies and copy market trends. If “all business is two things” and you don’t do either well, then you’ve got a problem!
I work with business owners on marketing all the time – marketing is a learnable skill and mainly requires a commitment to Test and Measure. Innovation, however, is a bit different and it seems harder to get a handle on such an ethereal topic. However …
Innovation is a highly valuable tool in differentiating your business from the competition.
Innovation doesn’t necessarily mean cutting-edge patents for products that change the world. It means creative thought about what your business can do differently to be noticed and add value to your product or service.
A great place to start is Customer Service. Business owners often say that Service is what makes their company the best. But Service has to be dramatically different to be a game changer for customers. To be innovative in Service, you need to involve customers, team members, possibly vendors and certainly your marketing team. You are looking for ways your company can wrap more value around your products/services. Questionnaires, interviews, brain-storming sessions, focus groups, etc. can all help you get creative.
Innovation can also be done in your product – things like packaging, support materials, training, user groups, colors, and add-on features can add huge perceived value and support higher prices. How you deliver your product can make a huge difference. Apple, Inc. has made amazing strides in reducing packaging – good for the environment and great for the bottom line! They have even eliminated packaging altogether for software, delivering it online.
Take a tip from Peter Drucker – focus your thoughts on Marketing and Innovation and your business can make a huge leap in growth and profitability.
Not sure where to start? Let’s meet. I’ll buy the coffee if you bring the topic.
However beautiful the strategy, you should occasionally look at the results. – Winston Churchill
Working with my client today, the discussion revolved around being Process Driven vs. Results Driven.
The business owner wants to focus on HOW things get done, but I suggested they need to address IF things get done. They are good at the HOW but poor at the IF. Here’s what that looks like:
Looking at the KPI’s in my client’s business, the focus is on following the steps in production, whether the reporting is completed. But the constant issue in the business is getting product out the door and delivered on time. Even if customers agree to later delivery, this creates a perception that the company is not responsive and can’t deliver.
In fact, Processes are the means to our Results ends. Processes can be a powerful competitive edge and certainly will provide Leverage for business owners. But processes alone are not the goal. Getting our product out the door – on time – must be our focus.
It’s not enough that we do our best; sometimes we have to do what’s required. – Winston Churchill
To create a Results Driven Business, here are 3 starting points:
- Examine your Key Performance Indicators – what do you measure in your business?
- Set Clear Results Goals: Delivering on time, Sales Targets, Production Quotas.
- Focus your Company Culture on Results: Celebrate when you ship or sign the deal.
Making sure your Team focuses on Results, not Processes, will create a culture of action and success. Monitor and measure your Processes, by all means, but reward and celebrate on Results. Your business will reward you!