1001 Business Bedtime Stories… Kelvin Astounds His Customers

1001 Business BeTruth 5 marketingdtime Stories…

Truth 5, Marketing

Kelvin realises that his bike shop has one great opportunity to carve out a niche for his bikeshop and build remarkable business.

Once upon a time… a long, long time ago in a country not unlike Australia…

Kelvin owned a bicycle shop in Sydney.

Selling bicycles is not easy. There is so much competition as people can buy bikes at specialist bike shops or at big retail stores like Big W and Kmart, and, like everything else these days, you can even buy bikes over the internet.

Kelvin’s bike shop was doing ok but he was worried about the effects of both the big box retailers and all the online stores. Kelvin felt constant pressure to make his prices competitive, and knew that his repair work was suffering because customers would often ask him to just fit parts they had bought themselves online.

“How can I possibly turn the ship around?” asked Kelvin.

Kelvin was worried.

The Bootcamp

Working in The Bootcamp with me, Kelvin came to appreciate that it was imperative he change his whole approach to doing business. He realised that he could never out-compete the big retailers, and that fighting over the crumbs with his fellow suburban bike shops would be a disaster.

Looking into Kelvin’s options for revitalising his business we came across a quote from Chris Zane, a bike shop owner in America: “The only difference between our competitors and us is the service we provide.”

Kelvin realised the obvious truth of this statement.

He knew there was no difference between the bikes he was selling and those sold by his competitors. He knew they were all fishing in the same pool trying to catch the same limited number of fish, and that the only way forward was to create a new pond and attract enough of the fish away from the old pond to enjoy the fishing again.

It took a lot of courage, but he did it.

Working in The Bootcamp Kelvin developed a whole new approach to running his bike shop, an approach based on providing astounding service. Kelvin was determined that the service customers received in his shop would leave them surprised and delighted.

How did Kelvin do this? A number of great ways: he implemented a life-time free flat tire repair service, he offered a no-questions-asked replacement guarantee for all bikes and accessories for up to six months after purchase, and he taught his staff that from now on the word “No” was banned and no customer request could be refused.

Soon the word started spreading about Kelvin’s astounding service, and people would come into the store just to check it out. The place was buzzing most days, and the staff loved doing whatever they could to amaze their customers.

A couple of years later, Kelvin’s business has grown so much he has just moved to a new location three times as big. With his great service Kelvin has succeeded in creating a whole new fish pond.

And Kelvin lived happily ever after… The end.

Ask yourself… Where will you find the courage to make profound things happen in your business?

1001 Business Bedtime Stories… Amanda Manages Her Finances and Makes Money

 

Truth 4 financial management
Truth 4 – Financial Management

1001 Business Bedtime Stories… Truth 4, Financial Management

Amanda Owns a boutique hotel and learns to manage her finances so that she starts to make money and have a lot more fun.

Once upon a time… a long, long time ago in a country not unlike Australia…

Amanda owned a small boutique hotel in the inner city.

Amanda’s hotel relied on five different corporate accounts for a significant percentage of its annual revenue. The room rates that Amanda charged these corporate customers was fairly heavily discounted, and payment arrangements varied widely between the five accounts, with some bills being settled on the spot and others on payment terms up to 90 days.

Even though her occupancy rates were very high, Amanda struggled to pay her bills and wages most months.

Clearly something wasn’t stacking up. Two obvious conclusion might have been that either her costs were too high or her rates too low. But Amanda knew that her rates were in line with similar properties in the city and she managed her costs tightly.

Each week Amanda thought, “If it is neither my prices nor my costs that I need to change, what else is open to me?”

Amanda was going grey.

The Bootcamp

Working in The Bootcamp with me, Amanda came to appreciate the difference between turnover, profit and cash, and that she needed to give equal attention to all three. Amanda also came to have a better appreciation of her ‘break-even’ point.

It was time for Amanda to set up proper controls for all three financial factors and to set in place a minimum break-even point below which it was simply not possible to go.

So she did… and it took a lot of courage.

Through working in The Bootcamp, Amanda developed a series of financial reports that showed her monthly cash was short because all her profit and working capital was tied up in corporate accounts that were paid between 30 and 90 days.

Amanda also worked out that the minimum room rate she could charge and still break even was $115 per night at 100% occupancy rate, or $145 per night at 75% occupancy, but only if the bill was settled on the spot. Rooms that were paid for at 30, 60 or 90 days would need to have significantly higher rates.

Armed with this knowledge Amanda was able to negotiate better terms and rates with four of the corporate accounts. The fifth one didn’t want to come to the party and, although it felt like the scariest thing she ever did, Amanda stuck to her guns and stopped doing business with this company.

In a matter of four months, things started to turn around and Amanda’s bank account now looks healthier than it has in years. Through the process Amanda has actually gained two new corporate accounts, both of which settle their bills weekly with a corporate credit card, further adding to the health of her business. Amanda and her staff can now focus on what they are good at: making their guests feel at home.

And Amanda and her staff will live happily ever after… The end.

Ask yourself… Where will you find the courage to make profound things happen in your business?