Why Bigger Isn’t Always Better in Business

small giants by bo burlinghamDo you get the feeling, wandering around the shops in this pre-Christmas week and seeing all the bulging shopping bags, that plenty of people still think ‘bigger is better’?

One person who doesn’t is Bo Burlingham (on today’s reading list). Burlingham has this great line, “Resisting the pressure to grow is one of the hardest challenges any successful business owner can face.”

Interesting idea hey, when it is such an accepted axiom that growth in business is always good, and the faster the growth the better.

Funny thing is, there is absolutely nothing that says growing is better than not growing. In fact plenty of otherwise successful businesses have gone broke or the owner has lost control simply because the company grew too quickly.

You can build a remarkable business by not growing past a certain point and just getting better and better instead.

So bigger isn’t better; better is better.

Beer O’Clock and Toilet Paper: What’s All That About?

So it’s beer o’clock and I want to talk to you about toilet paper. Have I had a few too many already? No! I’ve just been reading Mike Michalowicz’s book, ‘The Toilet Paper Entrepreneur’ today.

Mike says, “Owning a business is not about working your arse off for the sake of trying to squeeze out a living. It is not about making tons of money at the expense of losing tons of life. It is about maximising life, bettering your life and the life of others, which ironically fattens your purse.”

This makes sense to me; you too? I recently heard an American marketing guru say it another way, “The purpose of business is not to make money; that would be like saying that the purpose of a human being is to eat food.”

Sure we need food or we can’t fulfil our purpose, and in the same way a business needs to make money otherwise we can’t deliver on the purpose of the business.

But (and this is the clincher) the purpose of the busines is something much more important than making money, and it’s different for every business on the planet.

So from beer o’clock and toilet paper we actually ended with a pretty profound thought. Cool, huh!

1001 Business Bedtime Stories… Mark’s Great Sales System

Mark’s simple and effective sales system… Truth 7

So you’ve got a great product or an awesome service but where are all your customers? Read on to see how Mark found his customers and sent his sales rocketing.

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

Mark was a graphic designer.

In fact he was a fantastic graphic designer. He had put together a small team of other passionate and inspired designers and together they created beautiful, eye-catching, ground-breaking designs. Yet despite his and his team’s talent, the work coming in was sporadic and the business was only just making ends meet.

Sometimes potential clients made enquiries about design work, and sometimes leads just walked in the door. Every now and then Mark made a few phone calls and sent out some emails prospecting for work, but this was only occasionally and usually just when the need for work was greatest.

The result of all this meant that sales were haphazard and work fluctuated wildly. One week the team would be flooded with new projects, the next everyone would be heading home early.

The stress of wondering if the business would survive each month was beginning to affect the quality of the work produced. Mark was finding his staff turnover was high because of the constant insecurity and worry.

Mark wondered, “How can I smooth out the peaks and troughs of work coming in?”

Mark was going grey.

The Bootcamp

Working in The Bootcamp with me, Mark came to appreciate that he would need a consistent sales strategy and system if he wanted to build a healthy business. He came to see that the only way a business can grow is by making regular and consistent sales. Of all of the Ten Truths, Truth Number 7, that nothing happens until we sell something, really struck home with Mark.

So we got started developing a simple and manageable sales system, and worked on increasing the sales focus of both Mark and his staff. To turn things around Mark would need to not only implement the new sales system but to work consistently at it, week in, week out.

And he did… and it took a lot of courage.

Mark found an easy-to-use customer relationship management (CRM) system, that had great sales funnels and pipeline reports. Then he set targets for himself and his team for numbers of calls to make, emails to send out and proposals to write and follow up. Every week Mark and his team had a 20-minute structured sales meeting.

Very soon things started to turn around, and just three short months later Mark could see a difference. By the end of the financial year the business was at a completely new level.

Now, a couple of years later, Mark has a stable team of 10 designers whose talents are being fully utilised. The business has a great pipeline of work ahead, and Mark now knows with a certainty what his resources are and how much revenue and profit the business will generate in the next three to six months.

And Mark 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… When Courage Leads to Money to Spare

1001 Business Bedtime Stories… Truth 4: Cashflow

Ever wondered why sometimes we don’t succeed, even when we know how to solve a problem? Find out how Vivienne overcame her cashflow problem and now couldn’t be happier.

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

Vivienne owned a consultancy that helpe

Truth 4 – Financial Management

d businesses implement OH&S practices in their workplaces.

She worked hard and had plenty of clients. She knew her market and had priced her services appropriately, but found she was forever struggling to pay the bills at the end of the month. There was nothing wrong with her profitability.

Cashflow was the obvious problem. But knowing this didn’t solve it.

Each week Vivienne thought, “I know my cashflow is hurting the business but it’s hard to makes changes and I don’t know how to do it.”

Vivienne was losing sleep.

The Bootcamp

When Vivienne joined me in The Bootcamp two years ago she made a wish and committed to it. She said:

“I wish to have money left over at the end of each month, and I am going to do whatever it takes to get there.”

So we got underway…

Now it didn’t take a rocket scientist to work out that the first step on the path was to design a consistent debt collection strategy… We worked out a system of weekly actions and follow-ups and, most importantly, Vivienne vowed to stick to it with machine-like consistency.

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

Vivienne started using the system, week in, week out, no matter how unpleasant some of the phone calls were or how yuck she felt getting debt collectors involved. She had the courage to honour her commitment to herself and to keep going until her cashflow problem was solved.

After six months of this relentless focus, it was clear that Vivienne’s business and her life would never look the same again.

Now… two years later, Vivienne is putting cash aside every month in an investment account and, I might add, she looks 10 years younger.

And Vivienne will live 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… 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?