Do these 5 things right every time and your business will never stop growing
I’m often asked by clients to help them grow their service business. I nearly always tell them that growth is easy in a business based on services, anyone can grow a small business.
All you need to do is this:
Deliver what you promise
At the time you promise it
For the price you promise it
For a profit and
With a smile.
That’s all… Honestly
If you do those 5 things, every day, customers will break down your doors, because so few small businesses do.
Most small businesses fail doing those 5 things consistently and stunt their growth, because of the classic problem of small business growth:
It’s easy when you’re small
You see, when your business is small, you and a couple of people delivering all the services, be it plumbing, washing machine repairs, fixing cars, bookkeeping, designing websites or building houses, then it’s easy to manage and be in control of everything. You can make sure things happen the way you want them to happen.
Once you start to grow with 5, 10 or more employees, and you have a number of teams, or vans on the road, suddenly you’re not in touch with everything that goes on anymore. You don’t even get to meet all the customers and you won’t personally see all the services that get delivered. You have to rely on others, and hope they do things the way you want them done. That they communicate with customers they way you expect them to and that they take their dirty boots off before they traipse in through the house.
Managing by keeping your fingers crossed.
And guess what? It doesn’t work. Your customers start being less than happy, they start looking elsewhere, you’ll believe you need to lower your prices to keep them and it all becomes a dog’s game.
So here’s the biggest secret of all to growing your business:
Learn to say no.
Learn to say no, until you can handle the growth. Never taken on any work, any new business, unless you are confident you can deliver it to those 5 standards above.
If you do that, you’ll be in control of your business, you won’t have to compromise on price and you will build a Beautiful Business and Life. And the customers? They’ll keep coming. There is never a shortage of customers for businesses who deliver on all of their promises, with a smile… I promise you.
This is the ninth post in the series of The Ten Priorities: Laying the Foundations for a Great Business and Life. The ninth Priority is about your Managing the quality of your Products or Services. The introduction to this series on The Ten Priorities is here.
One of the most insightful modern business gurus I know, Seth Godin, said it really well:
“To do well in business you only have to do two things:
Deliver a great Product or Service
Make sure lots of people know about it”
As usual Seth Godin nails it, and the last two Priorities are about those two simple rules of Seth’s.
Because the problem is, they’re a lot easier said than done.
To have any hope of following Seth Godin’s 2 Rules, you have to have gone a long way to covering Priorities #1 through #8 first.
It’s really hard to be uncompromising about the quality of the thing you sell, in the face of the day to day challenges of business. The temptation to let a less than perfect widget go out the door, because a customer is screaming at you, can be hard to resist.
But resist it you must.
If you give the customer his widget and it turns out to be not quite right, the customer won’t be happy and tell his friends that the widgets you sell aren’t always quite right.
Come what may, your business must deliver what it promises. You don’t have to build Rolls Royce motor vehicles, but if your company name happens to actually be Rolls Royce, you better not build any Hyundais.
Not until you’ve mastered the arts of:
Looking after yourself
Giving yourself the time to think
Ensuring that business is Fun
Asking for help
Having your people do great work
Will you be the kind of business owner who can build a business that delivers what it promises, all day, every day… I promise you
How to grow your business is the most enduring of The 7 Big Questions. All of us business owners have felt frustrated at some stage in our journey to building a Beautiful Business The business feels stuck at one level and we are not sure how to get it to the next level.
So many misunderstandings and myths about business growth:
I have written about the general topic of business growth in many different places. I think there are a number of misunderstandings about business growth that are not helping us, as business owners, to feel better about ourselves. The first article is about that (and you can also read about the misunderstandings about growth in my book: The Ten Truths for Making Business Fun):
I believe that to grow a Beautiful Business that Stands the Test of Time you must be able to answer the question: Why does your business exist and why would anybody care? Most business owners can’t answer that question succinctly and powerfully. That’s bad, because if you don’t know why your business exists, your customers certainly won’t be able to tell, and then all it comes down to is price. Competing on price is a dog’s game, unless you’re Aldi, where price is your Purpose. The second reason you need to be able to answer the question clearly is that if you can’t, you will never master the greatest skill of effective business owners, namely the ability to say “NO”.
We’ve all heard that to grow your business you must start with Goal setting. But effective Goal setting is more complicated than you might think. Most Goals we set for ourselves and for our businesses are at best ineffective and at worst actually hinder our progress. Goals are often arbitrary, unrealistic, and unrelated to what really matters in our lives. A Goal to make $2 million revenue is an arbitrary and meaningless number, why $2 million? why not $1,956,384.13, or $2,163,927.46 for example? And so what when you reach the goal? Will you be better off somehow? What if you fall short? By $100, or by $1,000, or by $100,000? Does that mean you are a failure? Goal setting really makes a difference, as long as you understand that Goals are like a compass, they provide a direction on your journey, they are not the destination.
Marketing is about creating opportunities to sell your stuff. As such, I fervently believe that:
Marketing is everything and everything is marketing
And it is. To grow your business you have to look at every aspect of your business. Marketing is about advertising campaigns, and social media and designing your logo and your website, but it’s also about how you answer the telephone, about your pricing policies, about ensuring that your customers are happy with what you sell them. It’s about how you dress and about how you present your quotes and about your Public Relations strategies and about your warranty return policies. One of the greatest marketing strategies is a relentless focus on quality in everything the business does, in order to “Create Raving Fans”, because if your customers are all Raving Fans, they will actually do your marketing for you.
I don’t mean to imply that online marketing is somehow something different from all other forms of marketing, it isn’t. But it is useful to pay special attention to online engagement and marketing to build and grow your business, because it has become such an important aspect of any marketing strategy. Whether your business is a cafe or a building company or a law practice, or it imports widgets or makes whatsits, you can not ignore a bunch of different forms of online marketing. Email marketing, content marketing, Search Engine Optimisation, Search Engine Marketing, Social Media Engagement, Social Media Marketing, online PR, online reputation management (The ubiquitous star ratings), video marketing. The list is near endless and constantly changing.
You could easily argue (and I have in one of the articles I refer to below), that the principles of marketing haven’t changed, we’ve just got a bunch of new tools to do it with. And at one level that’s true, people still want to get to know, like and trust you before they will do business with you. But on another level things have changed drastically. Ten years ago, you’d give someone a business card with your web address on it and they would immediately want to know if you also had a bricks and mortar store. These days they want to know you’ve got a high functioning web presence and that you’ve got a presence on Facebook and on Google local and ideally a bunch of 5 start ratings on Yelp and Trip Adviser. Whether or not you have a bricks and mortar presence, simply doesn’t matter anymore. Online engagement in all forms must be part of your marketing strategies or you will not be taken seriously.
That’s a quote I saw hanging on the wall at a big office once, many years ago. And it’s true. No business growth, no business, without sales. No matter how great your product is, how beautiful your logo is, how smart your website is, or how wonderful your employee conditions are, if you’re not selling, the business will cease to exist.
Sales is often seen as a subset of marketing, but I’m giving it it’s own section here, because I think of marketing as getting the customers to your door and sales as actually getting them to hand over money. Lead generation v lead conversion. Sales is about skill and it’s about mindset and systems and above all, it’s about making it easy for people. And this last word is the key to the whole shebang. It’s always about people. The old saying is:
People do business with people they know like and trust
You must always remember it’s about people first and foremost and in small business especially it’s about people in both directions: People do business with people. Your whole approach to sales, especially in small business, all aspects of it must be built on a people to people philosophy.
A business without a Plan achieves everything in it
Nothing in other words.
Your business growth depends on planning. No human endeavour ever amounted to anything without a plan. Yet planning is guessing. It can never be anything more than guessing, because we can not know the future. So if planning is guessing, why does it matter so much and how can we do it so it works? There are two important answers to those questions:
There are two important answers to those questions:
1) You must understand that there are two entirely different types of business plans: Internal Plans, and External Plans. External plans are designed to impress others about your business and form part of the documentation to obtain a loan or other form of funding or make a proposal to a third party of some sort.
Internal Plans are documents designed to help the business focus. They are combined with meaningful goals (see above) and they help people in their day to day decision making processes. Internal and external plans have different functions and are presented quite differently as well.
2) Planning is a verb. It’s not static, it’s an activity that never stops. As soon as one plan is created, we start again. John Lennon said: Life’s what happens when we’re making other plans. Planning is like that, we make a bunch of assumptions and plan our actions accordingly. Then we go ahead and check reality as it unfolds and make changes to our plans to suit the new realities, every day, every week, every month and every year. Business Plans that work, that make a difference, are living documents.
Customer service is also a subset of marketing of course, if done well it leads to more business from those customers, and as I said above, everything is marketing and marketing is everything, but it’s worth mentioning separately, because of the concept of Raving Fans. Ken Blanchard wrote a little book that said it best in the title: Create Raving Fans and have your customers do your marketing for you. It’s a great little book and there’s a link below to get yourself a copy of it.
The principle of Ken Blanchard’s book is that your business should always be working to do one better for your customers than they expect. If you do so, your customers will become your advocates (Raving Fans) and advocates will go out of their way to help your business grow. They will talk to their friends about you, they will drag their colleagues to your door. They will defend your business against the competition and best of all, they won’t quibble about price. If your business focuses on turning it’s customers into Raving Fans, you will be able to slash your marketing budget in half, over time, for a better result.
Grow your business with systems and quality improvement
My clients often ask me to help them grow their business, and I often tell them to stop worrying about that. Getting more customers is actually the easy part. The hard part of business is:
To deliver what you say you will
By the time you say you will
For the price you say you will
At the quality you say you will…
With a smile
If you can do that all the time, the customers will come flocking to your door and you won’t have to spend much money on marketing (for one thing because you’ll be creating Raving Fans, see the previous topic). And right now, you may well be doing all those things, with a smile, but the trick is to be able to keep doing that as the business starts to grow.
I can’t tell you how many businesses I have seen struggle and fail in my years in business who couldn’t maintain their product or service quality and dependability and price, at scale. Once the business starts to grow and you, yourself, are no longer in charge of every step in the process, things start going wrong. Quality becomes inconsistent, delivery times become unreliable, prices go up or profitability suffers and your smile starts to disappear. Once the rot sets in like that, your reputation starts to suffer and customers start to look elsewhere.
There are only two answers to this dilemma: Either, don’t grow, stay small, learn to say NO and say it all the time… Or systematise. Developing systems for all aspects of the operation is the only answer. Systems for how the phone is answered, systems for estimating, systems for quality checking, systems for calendar management, systems for inventory management, systems for callbacks and warranty repairs. Systems for marketing, systems for hiring and firing etc etc. Above all, systems allow you to create Continuous Improvement Loops into your organisation. And continuous improvement is the Holy Grail of business. It’s what made companies like Toyota great.
Inventory management is a big specialised topic, and it’s really a subset of the systems section above. There are whole management libraries written about the various philosophical approaches to managing stock when building and growing a Great business that Stands the Test of Time. My earliest lessons of inventory management came from the owner of a big hardware store I dealt with a lot in my days as a builder, Colin. One of the reasons I bought so much of my material from Colin was that he always had everything in stock. Colin clearly knew what it took to create business growth, because his business was booming.
I asked Colin once if keeping such high stock levels of everything a builder such as myself might need from time to time was economical for him. I imagined that it was a very expensive way to run a business, having all that money tied up in timber and hardware and bits and bobs. His answer was:
If I don’t stock it I can’t sell it.
I have often thought about that statement in the years since, now that most operations run on the principle of “just in time”. Supermarkets have made an art form of stocking just enough and not a jar more than required, to minimise shelf apace and inventory cost.
I don’t know what the answer is, but I know that Colin got all my business for 20 years and most Sydney builders had an account with him, because everything we needed was always ready to be picked up.
Grow your business with hiring, firing and engaging people
Michael Gerber in his famous book “The E-Myth” wrote that it’s impossible to manage people and hence great businesses focus on systems, and manage those instead. And that’s certainly what grew McDonalds into the enormous business it is today, no argument. And as I’ve written elsewhere before, if you set out to make as much money as possible from selling restaurant food, it is undeniably the case that the McDonald’s model is the one to emulate. But, I can’t tell you how happy I am that not everyone in the restaurant industry wants to build McDonalds, because the world (and my palate) would be the poorer. The same philosophy can be applied to any industry.
If you’d like to build and grow a unique business, a business with an individual character, you’re going to have to manage people. You’re going to have to get good at putting the right people on the bus, sitting in the right seats, facing in the right direction and also know which people to get off the bus. If you don’t learn how to find and keep the right people and get them to do great work, your business will always struggle.
That means developing hiring policies, being prepared to hire people who might be better than you are at certain things, learning how to do great interviews, implementing induction and development training programs. It means learning how to coach your people, encourage them and hold them accountable. And it means learning about effective delegating. It means doing the HR admin and compliance effectively, writing job descriptions and doing performance reviews. It means learning what it takes to be a leader and it means being prepared to take the tough decisions when required, and take them quickly and respectfully.
To build and grow a Great business that Stands the Test of Time, you can’t afford to be left behind. The pace of change and innovation is relentless and what was ok even a few years ago is no longer ok now. Not long ago it was still fine for a cafe to have a sign saying “cash only”, but in 2018, you’ll lose a lot of business if you don’t accept cards in payment. Even in a business as simple as mine, people expect me to be able to accept online bookings. Cloud computing combined with smart phone technology and advanced GPS systems mean that customers now expect to be informed that their plumber is on its way and can be expected to pull up in front of their house in 13 minutes.
You don’t need to be Uber or AirBandB to implement new technology and come up with new ways of doing business. I just bought a house in a different state of Australia. The real estate agent gave me a private showing of the house via Skype. I engaged the conveyancer, the building inspector and a surveyor all without setting a foot in the house or the state.
A client of mine with a creative marketing agency has a team of designers and copywriters and marketing assistants all over the world and she rarely even meets her clients face to face. Another client with a small supermarket chain has technology in his stores that allow him to see what’s going on in any part of any store and to get live access to each of the store’s Point of Sale systems. He’s also just implement a bunch of tablet screens in his stores allowing people to find dinner recipes incorporating the fresh vegetables he has on special.
And all this stuff is only the beginning. It won’t be long before artificial intelligence is integrated in doctor’s surgeries and lawyer’s offices, and copywriting agencies. If you think that technology and innovation isn’t going to have a massive impact on the way you do business and how to create business growth, you are kidding yourself.
Your best employees may not all eat bacon and eggs for breakfast
The Shipbreakers of India, Pakistan and Bangladesh became famous after a documentary showed the other worldly scenes of the places in the subcontinent where the ships go to die. Here is an amazing video showing what goes on.
Shipbreaking is just one of the many professions that get outsourced all round the world. International outsourcing is big business in Australia too. More and more of the work we used to do here in Australia is being done in other countries where wage rates are lower.
A client of mine is a tax accountant and he has outsourced part of his operations to India. Another client of mine is an architect and he has started to outsource a lot of drafting work to the Philippines. It’s the way of the world whether we like it or not and I’d encourage you to put your toe in the water as well.
I have engaged various assistants and specialists overseas for the past 3.5 years.
I’ve hired a designer/ illustrator in India to help me with a couple of my books.
I have had various SEO specialists in India work on the ranking of my website in Google.
I have had someone translate one of my books into Dutch. (In the Philippines of all places)
And I currently engage a marketing specialist to help me with my content marketing and engagement strategy.
Some have been great and some haven’t been so wonderful and some could have been great, if only I’d understood the challenges better. Those challenges are what I’d like to talk about:
BRIDGING THE CULTURAL GAP
India, Pakistan, Indonesia, the Philippines are overflowing with highly skilled people who want to work. Some of them are incredibly cheap (like scary cheap) and some less so. You know this already of course. But here’s what you may not have considered. The gap in cultural understanding between you and a freelance contractor in the northwest of India, is real. Very much so. You need to be aware of that and you need to set your engagement structure up to suit.
A couple of years ago, I engaged Rajiv in India to do the typesetting and layout of my third book. Part of the project was to create 36 illustrations to be dispersed throughout the book. This caused me no end of trouble for a while, because I simply hadn’t foreseen that my visual reference points were so very different to Rajiv’s.
One example still makes me smile. For a particular illustration, I had in mind an image of a classic strong man in a circus, except instead of being dressed in a Hercules costume he was dressed in a business suit and instead of carrying a big weight above his head he would have a pyramid of office workers standing on his shoulders.
THERE’S NO CIRCUS IN NORTH INDIA
To me it was an obvious image. Rajiv didn’t get it. I had to send his drawings back several times, it just didn’t make any sense until I suddenly realised that Rajiv, who was born and raised in the country in north India, had probably never seen a circus nor a classic circus strong man. So I found a bunch of photos of strong men and old circuses and sent them to him and then he got it. The end result was great I think.
THE LESSONS I’VE LEARNT
So here’s a few of the lessons I’ve learned in engaging Rajiv, Jasmin, Aanchal, Sridhar, Oleg and various others over the past 4 years:
Understand that even if your employee speaks English, they won’t necessarily have the same understanding of a situation that you have.
Set out your expectations excessively clearly. When you’re working with someone who is 10,000 km and 6 time zones away from you, you can’t walk past their desk and look over their shoulder to see how they’re going. Agree how often you are going to talk in what format. Agree on what the key deliverables are, weekly, and how you measure and report on them.
Before you hire someone, pay them to do a specific test job and see how they go. I recently got 4 new marketing assistants to rewrite an old article of mine to see how they went and I paid them 2 hrs each for the article.
And then after you select someone based on the test job, still only engage them for two weeks and ask them to perform specific jobs in those two weeks and again compare.
Accept that your first hire is probably not going to work out well. It’s ok. Freelancers are generally engaged on a week by week basis and you can simply let them go and find someone else and apply the lessons you’ve learned.
Outsourcing to overseas contractors can work like a charm and it can allow you to do things you might otherwise never consider. But if you want it to work, you have to start by accepting that not everyone in the world has bacon and eggs for breakfast.
Get the boring stuff right in your business and make the competition irrelevant
It’s not hard to sell more, what’s hard is to deliver on your promises, week in week out
Early in my days as a business coach I read a book by Jason Jennings: “It’s not the Big that eat the Small, it’s the Fast that eat the Slow.”
Besides the unwieldy nature of the title, it became one of my bibles. There are various chapters in the book that I have re-read several times and I often find myself quoting from the book to my clients.
But I’ve decided that Jason Jennings and I part company on one specific idea about business. The premise of the book is that in the modern world, small fast business always outcompetes big slow business. Mr Jennings uses a number of examples to illustrate that every time a big powerful Goliath of a business comes up against a nimble little David, the Goliath gets defeated time and again, and hence the book encourages small business to grow fast and stay nimble.
I’ve stopped believing in fast growth as a strategy. These days, I believe in the “Slow and Steady Wins the Race” principle.
Growth is the easy part
As I have written previously on Smallville, growing your business is the easy part. If you do what you say you’re going to do, for the price you say you’ll charge, by the time you say you’ll do it, your customers will find you and flock to your door… guaranteed. The hard part is doing those three things… under-promise and over-deliver… every time, and make a profit… every time.
It’s relatively easy to deliver on your promises, and control your costs and your income, when it’s just you and a really small team, but once you’re not actually doing the work of the business yourself anymore and you don’t meet every client and see every job and you don’t know how your staff are doing the work every moment of the day anymore, that’s when it becomes challenging to continue to deliver your three promises and remain profitable.
Jane’s worried about the competition
I’ve written before about my client Jane whose business sells flowers online in little bunches (Read about Jane here). Jane’s has a unique business model and when I first started working with Jane, she was nervous, because she thought others might, steal her business model. She was keen to grow really quickly, expand into other markets around Australia and move to the UK, Europe and the USA in the shortest possible time.
I helped her to stop worrying and to slow down. When we started working, the business wasn’t profitable yet. A lot of details in the business needed ironing out yet, nearly all of them in operations and cost control.
Boring stuff, like finding new couriers and negotiating better rates, working with her staff to increase their productivity, improving the work environment, developing better online systems, implementing better financial control systems, simplifying the admin.
Doing the boring stuff
None of it was very exciting, none of it got Jane’s creative juices flowing, none of it seemed important when seen against the threat of armies of competitors flooding in and taking away her markets.
And a bunch of different competitors did come into the Sydney market and at last count there have been three different competitors trying to get something similar off the ground in Melbourne.
But now, two years later, Jane’s business is consistently making close to $10K net profit every month (That’s after paying Jan and everyone else in the business a proper wage of course).
Because Jane knuckled down and dotted the I’s and crossed the T’s, all the boring stuff, and now the business is humming like a well-oiled machine. Everything that can be systemised is, from going to the flower markets, to making the bunches, to marketing, ordering, delivery and payment.
Jane’s customers love her business, the staff love working there, it’s growing steadily and the bank account is building steadily.
The competition is irrelevant. Most of them started up and fell over again, or in any case are not heard from again. The ones that are still there are barely hanging in it seems. They haven’t dotted the I’s and crossed the T’s. If anything the competitors have prepared the other markets for the arrival of Jane’s business.
Jane will expand to Melbourne, and then she’ll make sure Melbourne runs like a well-oiled machine and making money, before she opens in Brisbane, and so on.
I publish a weekly “One-Minute-Business-Tips” newsletter which is designed to help small business owners take these very small simple steps every week… Each tip I send out on Friday morning, is designed to take less than half an hour, but taking those little 10 minute steps every week will start to change your life… I promise you.
It’s my third book and I’m proud of it. I think it’s my best book yet. The Working title is “The Ten Truths for Making Business Fun and building a business that sustains you for years to come”
One thing’s very different from my first two books. To complete the book I’ve joined the globalisation movement and engaged with an illustrator and designer in India. Rajiv is creating all the drawings that will go in the book and he is carrying out the design and layout work to get it ready for the printers.
Fascinating process… I’ve never had so many of my jokes and double entendres fall flat on their face, but Rajiv’s work is excellent.
And let’s be quite clear about this. By engaging Rajiv, I’ve taken work away from an Australian designer and illustrator and I’ve done so because it’s cheaper… much cheaper.
Collectively, I think it’s clear that the world is going to go through a massive shift in the next few years. When the NBN finally gets connected to a significant portion of our homes and businesses or some other superspeed internet connection becomes the standard, the wave will become unstoppable. More and more of the work that can be outsourced to India, The Philippines, China or Tajikistan will be. Right now, there are still a lot of businesses who are resisting it, because it’s all too hard and the language problems and cultural differences etc etc.
Resistance is futile
But in the words of The Vogons: Resistance is futile.
I was talking to an architect recently about this issue and although he hasn’t gone the route of overseas outsourcing yet, it won’t be long before he will be forced to. Cost pressures will simply force it on him.
Do I think this is a good thing? Yes and no. Obviously if I was a young architect, or designer or web developer or computer programmer, I would be worried… very worried for the future. My career is probably not going to be there anymore in 10 or 15 years, maybe even sooner, because architects in the Philippines will be doing most of my work.
That’s not great for our society here in Australia or elsewhere in the Western World.
But you could just as easily argue that it is a positive development for the world as a whole. It seems to me that over time the rates we will be paying architects and software programmers in India will get closer and closer to rates we pay in Australia, and maybe that’s not such a bad thing. There is clearly a great imbalance in wealth and cost of living between the West and the Third World. Maybe this kind of movement is going to redress some of that imbalance. I’m sure that is already happening. Rajiv advertises his hourly rate on his profile as $4.50 per hour, but I’ve actually engaged him for $8.50 per hour (yeah, I know, I’m being ripped off right!).
I was talking to an Indian friend of mine the other day and he reckons that working in India, the designer would be lucky if he could charge $2.50 per hour. So contracts like mine are causing wage inflation already (on a miniscule scale, but you see what I mean).
So what would I be doing if I was a young designer or programmer, bookkeeper or architect or any other profession that is outsource-able?
Keeping your fingers crossed certainly seems like a bad strategy. The old saying: If you can’t beat them, join them, strikes me as the approach to take. You see, I think there is an enormous opportunity for people to provide go-between services for people like me and Rajiv in India. What would perfect for me is if I could engage an actual designer here in Australia who manages the process of getting the work completed easily in India or wherever. The problems I and Rajiv have faced in this project so far have largely been about language, culture and some technical glitches.
I think If I was a young designer coming out of college, I’d make sure I learn Hindi or Tagalog or Chinese and establish a network of designers in one of the prime outsourcing countries. Then I’d develop a service for people like me and the contractors that facilitates the process, so that instructions I have for my contractor actually get understood the first time. Rajiv and I find ourselves going back and forth quite a lot, because I use words and sentences that mean something very different to Rajiv than they mean for me. Having someone in the middle who understands design and has design skills and speaks Indian would be invaluable.
Not to mention that I’d love my brilliant jokes translated into Hindi and hear the raucous laughter clear across the Indian Ocean.
The world will change completely in the next 10 years. There really is no point hoping it won’t.