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.
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
business growth, planning, strategy
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:
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.
Each of the 7 Big Questions has a dedicated page on this website, with links to many relevant resources both within my website as well as throughout the internet. Scroll down or click on the links above for a summary of each of the 7 Big Question with a link to that question’s full page.
Summary: To build aBeautiful Business and Life, we need growth. Seth Godin made a great statement some years ago on his blog. He said: To build a great business you only have to do two things: first you have to do great work or deliver a great product and second you have to make sure lots of people know about it. And that’s exactly how simple it is to build a Great Business that Stands the Test of time. But, as with so many things in life, it’s easier said than done.
Business growth is about research and product and systems and quality assurance and innovation and inventory management and people management and everything in between and then when you get that right, it’s about customers, and marketing and sales and social media and communications and PR and SEO and content marketing and advertising and design and branding and of course leadership and you might well argue that before all of that comes Visioning, Mission, Purpose, Goal setting and Strategic planning. In short Business growth touches all aspects of business. Read More Here…
Summary: To build a Beautiful Business and Life, we need to make profit. A business that doesn’t make profit and that doesn’t generate cash flow isn’t a business, it’s a hobby. Profit is not the Purpose of business, and nor is generating Cash the reason the business exists, but without profit and cash it is not possible for the business to deliver on it’s Purpose.
Business growth will have an impact on the flow of profit and money in the business, both positively and negatively, but many other aspects of business have an impact as well. There’s pricing, discounting, inventory management, costing, trade terms , collection policies and procedures, expense management, cost control and many other aspects of business will determine the profitability and sustainability of your business.
And on the other hand there is financial management. The management , reporting and analysing of the flow of profit and money through the business. Having your fingers on the pulse of all of the key indicators of the health of your business every day, week, month and year. Management of the numbers in other words. Read More Here…
How can I become less overwhelmed and feel happier every day?
Summary: To build a Beautiful Business and Life, we need to get unstuck. In my experience, business owners operate in a state of overwhelm many days of the week. They’re often first in the door in the morning, last out the door at night and have to catch up on their admin and email after dinner. They run around from crisis to crisis most days, extinguishing brush fires along the way.
Staff don’t seem able to tie their own shoe laces without input and supervision from the boss. Customers expect the business owner personally to solve all their problems, immediately, rather than the perfectly qualified and expensive staff that are employed by the business for that purpose.
As a result, the critical business development projects are constantly pushed back and the business gets stuck in the mud. The way out of this overwhelm is to learn to focus on three letters FUN. Fun in Business is the opposite of overwhelm. Developing a discipline on making Business Fun again works, because when business is fun it means everything is working. Read More Here…
How can I find the right support, advice and guidance?
Summary: To build a Beautiful Business and Life, we need support. One of the most consistent complaints I hear from business owners is that it’s all down to them. They feel alone and unsure of themselves. They need to have a sounding board. The people around them don’t get it. The staff are affected by the decisions the business owner needs to make, and so are their spouses and family.
Human beings work well with external accountability and advice. Independent external support is invaluable to any business owner who wants to build a Great Business that Stands the Test of Time. External support can take many forms: A mentor, a business or life coach, management consultant, a virtual board, an executive coaching group, a regular get together with a group of fellow business owner buddies or all of the above.
One thing is for sure: Don’t think you can do it on your own. But how do you go about finding the right support for you? Read More Here…
How can I find work-life-balance in my business and my life?
Summary: To build a Beautiful Business and Life, we need to create a balance between the demands of the business and those of the rest of our lives.
In the many years I’ve worked with business owners, I’ve come to believe that business owners are the most ‘guilt driven’ people on the planet, “worse than Catholics” I sometimes joke. Business owners generally go through life believing they are not up to the job in some way. They tell themselves (and me), that to compensate for their perceived failures, they’ve got to work harder than anyone else in their business or else how could they ever ask their people to put in the hard yards when required? (see also what I wrote above about overwhelm). But in the mean time they’re missing out on the important stuff in life. Their health and well-being suffers, as are their families.
For business owners to create a greater balance between work and life, the first step is to acknowledge that owning a business is never a 9-to-5 job, you probably won’t ever be able to close the door behind you on the way home entirely. The business is your baby, you’ve put your heart and soul into it and it’s part of who you are as a person.
Once you acknowledge that fact, the immediate next step is to recognise that your own time, your health and your general well-being are the most valuable and important assets of your business and as the business owner it is your prime responsibility to look after your assets. In other words, not looking after yourself and ensuring you are in a great physical and mental state means you are not taking your responsibilities as the owner of the business seriously. Once you’ve learnt to accept the realities of those two principles (contradictory as they might seem from time to time), you’re on the path to create the business and life you dream off. Read More Here…
How can I become a better business owner and leader?
Summary: To build a Beautiful Business and Life, we have to become better business owners. As I’ve said above in the “work – life – balance” summary, most business owners feel they’re not quite cutting it as entrepreneurs. Oftentimes, business owners start their business on the back of their profession, trade or skill they have learnt (plumber, architect, accountant, chef) and they feel confident in that particular skill. But when they start a business based on that profession, they suddenly realise that it takes a lot more than being a great plumber to build a great plumbing business.
Few business owners have studied to be a business owner, and even those who have attained an MBA or similar qualification, find that they’re not prepared for the realities of life as a small business owner. Suddenly everything is down to you, the big decisions about whether or not to bid for that contract, or hire that expensive employee, or sign the lease for the new office, as well as making sure the toilets are stocked with toilet paper and that there’s ink for the printer.
To top it off, your people look to you for having vision, having the answers and being the leader. It’s a frightening place to stand in the middle off, but there are three pieces of good news: (1) You got this far and you’re still breathing so you must be doing something right. (2) Your people actually want you to be the leader and they’re ready to forgive you just about any balls up you’re going to make along the way. (3) Leadership is something you can learn, practice and get better at. Read More Here…
Family business: How can we negotiate our roles as business and life partners better?
Summary: To build a Beautiful Family Business and Life, we need to get good, both at working with our spouses as well as living with them. As I’ve said above in the “better business owner” summary, many businesses are founded on the profession of the business owner. The plumber starts a plumbing business and the lawyer starts a law practice. A little way into the life of the business, the founder of the business, along with the spouse of the founder starts to appreciate that it takes more than being a great lawyer to build a great lawyer business and the business flounders.
Often, it is at this point that the spouse decides to enter the business as well, to sort out the chaos, in no small measure, to protect the interests of the family, and the family business is born. 70% of all businesses in Australia are family businesses and a large percentage of those can be classed as husband and wife family businesses.
In my experience there is wonderful opportunity in being in business with your spouse. It holds the possibility of providing for your family very well and there is a great opportunity to grow as a couple. But waking up beside your business partner in bed every morning also comes with a bunch of unique challenges. Read More Here…
Worry less about growth and more about how you keep your customers happy all the time
I have a client who owns a car mechanics business in Sydney, let’s call him Garry the Grease Monkey (not his real name, in case you were wondering). Gary is around 30, and he took over the garage from his mum and dad some years ago. For the past few years, it’s been him and his dad doing the work and mum doing the books. Gary and his dad make ends meet, just, but dad is ready to retire, and Gary wants to build a business that gives him the opportunity to work a bit less than 60 hrs per week and afford him the income to start a family and more of that good stuff.
So Gary found me and asked me to help him grow the business. (Read more about growing your business here) You need to know, that Gary is a great mechanic and that Gary and his dad do great work, significantly cheaper than the major mechanic’s workshops and dealerships, and that they do everything in their power to make your life as easy as possible. Gary and his mum and dad are nice people, they’re the kind of people you’d love to give your precious car to for a service or repair, because you know they’ll look after it as if it was their own.
Keeping the clients happy
So the first thing I did was that I told Gary to stop worrying about where the extra clients were going to come from. Getting new clients was going to be the easy part. The hard part is ensuring that when he doubled and tripled the turnover of the workshop, his clients would continue to be as happy as they are now while maintaining and improving his profit margin on jobs.
How do you keep delivering consistent quality and reliability, day in day out when your business doubles and triples?
A year later, that’s exactly how it played out: the easy part was getting the clients. Gary joined a local business referral group, launched a new website, improved his local SEO, developed strong referral relationships with a few chosen businesses in the local area and the phone has started to run hot with new clients, the kind of clients who ring up to book in their car without even asking about price.
What’s been much more complicated for Gary is managing the extra work. There have been three big challenges for Gary in the past year, and these are the three things that challenge all Small Business owners in Gary’s position:
Finding, hiring, training, motivating and keeping the right staff.
Developing and implementing systems and processes that create regularity and predictability in the business.
Finding and implementing business management software and applications.
Bad experiences with small business
In a city such as Sydney, most people have had bad experiences with Small Business of all kinds. Tradesmen turn up late or not at all, work is shoddy, they leave a mess when they leave and charge unexpected fees for all kinds of spurious reasons. If you do what you say you’re going to do, for the price you say you’ll charge at the time you say you’ll do it, consistently and with a smile, the customers will break down your door. We as consumers are desperate for people who offer such simple dependability and trustworthiness, and when we find someone like that, word travels fast.
But that’s exactly where the problem lies. Most Small Business owners start their business with great intentions and when they do most of the work themselves they offer exactly that kind of dependability, but when the business starts flooding in they lose the ability to manage the extra workload, they have to rely on employees that they haven’t trained and mentored properly, they have little or no established systems in place, and they don’t know what goes on between their employees end their customers.
Keeping your fingers crossed
I call it management by keeping your fingers crossed… It doesn’t work and it leads to unhappy customers and customers that go off looking for the next small business to put their faith into.
Gary and I spent most of our year together on the three challenges above. It’s what I call the work of the business owner, as opposed to the work of the business. Gary has made major strides, and he’s found a couple of great employees already and is giving them every opportunity to stay great; he’s started writing down a lot of the systems in the business, and he’s found and started implementing a big piece of software that is designed specifically for the management of mechanic’s workshops.
The clients are starting to flood in and they tell their friends about the cleanliness and efficiency of the workshop and at how easy Gary makes it for them to have their car serviced at their convenience, and those friends can’t wait to have their car serviced by Gary’s business, and they tell their friends, and so on.
Getting clients is easy, how you deal with what comes after is what differentiates the business owners from the hobbyists… Just ask Gary the Grease Monkey.
How to avoid the Spray-and-Pray approach to your marketing strategy
I had a interesting experience at a networking and business building event a few days ago. We met over breakfast and there were various activities designed to get to know each other and to support each other in the development of our businesses.
One of the exercises we did was a group hot seat, where one of our fellow business owners presented himself and his business to the group and asked for help with his greatest challenges.
The business owner in question, let’s call him Adam, told us about all the amazing projects he’s been involved in and how smart the solutions were that he implemented for his clients.
But Adam also shared that he sometimes found it difficult to find new clients.
So we asked him who his ideal clients are, how we would recognise them if we tripped over them and how we could introduce him to them effectively.
Designing solutions for the challenges
In response, Adam, told us he’s worked with government departments, global machinery manufacturers as well as dog kennels and everything in between. He told us how he sits down with business owners and gets to really understand their businesses and challenges, designs solutions to resolve those challenges and implements the solutions for them.
All very well of course, but it didn’t help us much in our quest to support Adam. Most service based businesses do exactly that, they find out about the challenges a client has and then they offer a solution. But we never really got any further with Adam. Every time we asked him to get more specific he gave us more details of the wide range and varied types of clients he’d worked with. Although Adam left us impressed with his experience, his knowledge, and his expertise, at the end of the 15 minute hotseat, the group was no closer to understanding how we could help him find more new clients.
How can we help you?
In the end we left Adam to ponder the following question:
“Let’s say someone wanted to help you, really help you, and they were prepared to set an hour aside today, to do exactly that. Further more, let’s say that person had database of 6000 direct connections in LinkedIn. All business owners, largely in Australia and most of them in Sydney. Amongst such a database, it seems likely for there to be 5 or 10 people who are actual prospects for Adam.
Obviously, it’s not possible for such a person, to send a direct email to all 6000 people in a kind of “spray and pray” marketing outreach. So the question we left Adam to ponder was: How can such a person go about identifying those 5 to 10 perfect introductions for you from amongst the database of 6000?
Because you see, Adam really struggled to answer that question. Adam couldn’t tell us how to filter out 5 or 10 people in such a database of LinkedIn connections.
And I think most of us have that challenge. We don’t actually know how to identify our prospects.
Who are my prospects?
I find it difficult in my own business as well sometimes. I’ve thought about it a lot and often, and the best I can do is this:
I’m looking to connect with business owners
That are in design (Architecture, Interior design, Graphic design) technical services (IT, Communications, Software and Web development) or trades (Building trades, Motor trades, Hospitality trades)
With between 3 and 20 employees
And that have operated the business for 2+ years
Confronted with the same question we left Adam to ponder, using the above criteria I could narrow the search down a little and have a slightly more focused list, but there’s probably still a lot more than a 100 people in that database of 6000 that meet all the criteria.
A direct introduction strategy is very powerful but it can only work with a very limited number of people.
So why does it matter?
Well, I do want to help Adam, he’s a good guy and very good at what he does, and as it happens I do have a database of 6000 direct connections, but I simply don’t know how to help him.
And what’s more, because Adam isn’t clear on who his clients are, he can’t craft a clear marketing message himself either and he can’t focus his own messages on the right people.
If Adam isn’t clear, his prospects won’t be either.
Most of us face that dilemma.
For me, it’s clear that small building and trades contractors, builders, electricians, plumbers, painters, carpenters, architects and engineers are absolutely the people I should to be talking to. Those kinds of people are right in my sweet spot. So if you know any of those, I’d love you to make an introduction, and I’ll send them my weekly tips.
But how would you answer the question we asked Adam to ponder?
Most small business owners tell me that one of their biggest challenges is to get the money they believe they need to grow their business.
Most believe that with more wriggle room in their overdrafts, working capital or equipment funding, life would improve and they could take the business to the next level. More money equals better business… right?
Well yes, right-(ish).
It’s true, most businesses need money to get off the ground, but in my experience it’s dangerous to focus on money as the pill that’s going to fix the ills of your business.
I’m told all the time, that banks are impossible these days, they’ll only loan you money when you don’t need it. A friend of mine recently had a bank tell him they’d be happy to loan him $50,000 if he were to put $50,000 in a term deposit first.
Naturally my friend was miffed. But, there’s a good reason most banks are reluctant to loan money to small business. Small business owners are not very good with money. In fact they have an appalling track record with the stuff. I know, I know… You’re different… You’re nothing like all those drongos that go bankrupt.
Interesting aside: I read recently, that 80% of adults consider themselves better than average drivers. Think about that for a moment.
Banks don’t like losing money
I’m no friend of the banks, far from it, but the reason banks are reluctant to loan money to small business, is that they stand a very good chance of losing their money. Small business owners generally have no idea about managing their cash flow, they don’t run accurate and consistent financial reports, they confuse cash with profit and they generally don’t know which parts of their business make and lose money.
Small business is a game of keeping your fingers crossed. And banks know better than most that throwing money at crossed fingers leads to disaster. Instead of swearing at the banks, take a lesson from them: getting outside money into your business is the last thing you should do.
The last thing you should do
The last thing, after you’ve done everything else, in other words. After you’ve tightened up all your procedures and reporting, after you’ve learnt to manage your cash flow, after you’ve worked out what jobs, what clients and what projects make profit and you got rid of the ones that don’t.
The time to inject more money into your business is once you’ve got your fingers on the pulse and you’re making money, not before. The dream of being flush with cash can make things worse. The investment needs to be paid back in some way, so overheads go up and cashflow get tighter.
Worse than that is the effect on the mindset of the business owner. As soon as the cash is in the bank or the overdraft is established, the pressure comes off. Suddenly it’s not a drama anymore when you’re late in invoicing or clients are slow payers. Suddenly doing a job that only barely breaks even is ok.
BAck to the beginning with a new debt
And before you know it, the overdraft is fully drawn and the business is more or less at the same state it was prior to the cash injection, but now you have a big debt.
Before you consider borrowing money, sticking more of your own money in or getting and investor to put money in for you, make sure you’ve learned to become a great financial manager of your business. Get the financial reporting right, regular and ensure you understand them. Install discipline around invoicing and collecting. Implement software systems that tell you where you make and lose money in the business. (Read about the 7 steps to make your business rock-solidhere)
And above all: make profit. If you do all that, consistently, banks and others will line up around the block to loan you money. The irony is of course, that by then you may not need it anymore… Now that’s a problem we’d all like to have… I promise you.
This is a guest post by Philip Piletic, more about Phillip at the end of this article
Successful promotional campaigns might seem random, but here’s 6 key factors that you should consider
Here’s one: Have pens made up with your company logo and information on them, and hand them out everywhere!
“Wait – what’s creative about that?”
Nothing! But pens are effective largely because they are useful. That is a huge asset to any promotional product. Nearly one hundred percent of Fortune 500 companies and the fastest-growing startups give away promotional pens. So, before we start getting creative, we are reminded that “effective” is the goal.
Creativity is often a dynamic component of a successful promotional product or campaign; it can also make it quirky in a bad way, forced or disjointed and ultimately unsuccessful. Watch some of the lowest-rated commercials for visual proof of this concept. By the way, going for the “so bad it’s great” angle is risky.
Studying these success stories will get your creativity flowing.
Useful & Effective
Logo Cups that Change Colors
Add something cold to these cups, and they change colors. Made in about a dozen warm/cold color combinations, the cups can be printed with the logo, message and information you want to share. These cups work best at outdoor events like festivals, concerts and fairs when there’s enough light to see them change.
Reason it works: It’s a novelty. The recipient will find it interesting and then play “show and tell” with it, “Hey, Jason, look at this…Serena, watch what this cup does.” You’ve produced enthusiasts who will demo the cup, holding up your branding information for others to see. The novelty is key. People don’t go round saying, “Will, see this ordinary pen I just got!” We’ve made the case for pens, but if the item can be exceptional, it will get a wider audience.
Silly Bobblehead Pens
OK, then, here’s an extraordinary pen – the pen with a suction cup cap at one end and a ridiculous bobblehead at the other. Highlighters with the same scheme are produced too. You can take this idea to the next level of fun (and expense) with the bobblehead pen that talks! The one we came across says, “Hey, don’t forget to smile, laugh and have a great day” when its button is pushed.
Reason it works: The items are useful, puts a smile on peoples’ faces and makes them want to show them off, right along with your company information.
Erasers that Save Memories
Erasers get rid of stuff…like Alzheimer’s Disease erases memories. Alzheimer’s New Zealand enjoyed a successful campaign by fitting real erasers around USB drives, and printed, “Alzheimer’s Erases Your Memories. Save Them.” On one side of the eraser. The other side featured the organisation’s logo and contact info.
Reason it works: It’s useful, so will be kept, but it has become a widely used example because there is an immediately grasped connection between the effects of the disease and an eraser.
Bendable Yoga Straws
The Y+ Yoga Center in Shanghai, China had straws printed with a woman in yoga gear positioned right on the straw’s bendable region. You get the picture. Every time the straw bends, the yogoist shows off her flexibility in a new position.
Reason it works: Like the Alzheimer’s campaign, the “get it” factor is immediate. Take time to think about, and brainstorm with your team, commonly used items that could be used to produce an immediate connection with your products or services. Thinking is hard work, but it is free and can yield amazingly creative, fun and successful promotional product and campaign ideas.
Ketchup Splatter Detergent Packs
Vantage Detergent, a brand produced in Brazil, was marketed using small packs of detergent in the color and stylized shape of a ketchup spill. The packs, about 100,000 of them, were divided among restaurants in São Paulo, and were snatched up by customers in three days.
Reason it works: The colorful packets encapsulated a standard marketing strategy – identify a problem, and provide the solution.
Putting it All Together
Let’s compile our list of keywords, principles really, that give tremendous guidance for choosing or designing promotional products and using them successfully as part of your marketing mix:
Connection [between the item and your product or service]
Build as many of these into your marketing efforts, including the use of promotional products, and you will enjoy far more hits than misses. This is especially true when you tailor your product, product design and campaign strategy to your target demographics. Take an hour today by yourself or with your team, and think, think, think your way to creative promotional products and campaigns that will be effective. That’s the first principle and the one that will most affect your bottom line.
Guest article by Philip Piletic: Philip’s primary focus is a fusion of technology, small business and marketing. Freelancer and writer, in love with startups, traveling and helping others get their ideas off the ground. Unwinds with a glass of scotch and some indie rock on vinyl. You can read more of Phllip’s work on his Linkedin profile here: https://au.linkedin.com/in/philippiletic
We must all become believers at the Church of Gross Profit
Tracey launched her business about 4 years ago, and in that time she’s built something quite special. Tracey’s business sells a unique home delivered fresh food solution online for busy professionals who want to have a healthy balanced diet that tastes great as well.
Tracey’s business model is in fact so successful that it attracted not only growth but competition. Entrants copy what she’s been doing so well for the past 4 years. Some of those competitors are trying to compete on price, some are offering delivery to different areas of Sydney and others are offering different payment models.
Tracey is annoyed, she’s worried and she’s determined. Annoyed that others are stealing her ideas, worried that they’ll kidnap her customers and determined to fight the bastards. Good for her, and I’m going to fight right alongside with her and teach those upstarts a lesson they’ll never forget.
Good news and Bad news
As always, there’s good news and bad news: The bad news is that it seems that some of these bastards have actually gained a foothold in Tracey’s market, but the good news is twofold:
The bastards are demonstrating that there is room in the market. It’s clear that there are a lot more people who want what Tracey has to offer than she might have thought.
The bastards are testing some new ideas that Tracey herself has been considering for a while, but now those ideas are being tested free of charge or risk to Tracey’s business.
Tracey’s knee-jerk temptation is to attack. And the obvious attacking strategy is to meet the competitors head on and offer the same things they do. One of those things revolves around delivery options. Tracey’s products are delivered for a flat fee, by courier, on the day of ordering to a limited number of areas of Sydney. It has always been a core principle of Tracey’s, to keep the whole thing super simple. A flat delivery fee fits that principle. The flat rate means the delivery has to be restricted to certain areas of Sydney, or Tracey can’t maintain her minimum margins.
Same day delivery everywhere
But one of the new upstarts is offering same day delivery everywhere in Sydney and Tracey feels she needs to match the competition — that flexibility.
But I’ve advised her against doing so, for one reason and one reason only:
Buying growth always leads to disaster.
Sure, it would be nice to move into the untapped regions of Sydney, but Tracey would only be able to do so by paying a lot more for her deliveries. She’s costed the various options and her delivery costs to those new areas will increase by about $2 per item. $2 Doesn’t seem like much when the average price per meal delivered is roughly $30. But, the fact is that her current Gross Profit Margin (profit per meal) would reduce by 33%. At the moment, she makes about $6 gross profit per meal. With an increase in courier cost of $2 per meal, she would suddenly only make $4 per meal delivered. Doing that spells disaster, as sure as God made little apples.
Not long ago we updated our breakeven calculations for the business and we worked out that at a certain level of sales, the Gross Margin on each item sold had to be at least $5 to be able to break even. At a Gross Margin of $4 per item, Tracey would need to sell 25% more meals just to break even.
The Red Queen never stops running
It’s what someone recently referred to as The Red Queen Problem.
The Red Queen being one of the Queens in Alice in Wonderland who says:
“My dear, here we must run as fast as we can, just to stay in place. And if you wish to go anywhere you must run twice as fast as that.”
In effect what Tracey would be doing by delivering to new areas at the cost of her minimum Gross Margin is running harder, but standing still. No doubt Tracey would be selling more meals if she offered same day delivery to other areas, but in all likelihood, she’d make less money than she is now, she might even lose money. The profitable areas of her business would be subsidising the unprofitable areas and if there was ever an unsustainable way to grow a business, that’s it.
Growth is irrelevant. I’m not sure who ever made growth such a focus in business, but he (and it’s guaranteed to be a he, btw) should have been strangled at birth. The blind focus on growth that we are told to chase in business is crazy. Successful business owners, business owners that build Great Small Business that are Fun and that stand the test of time are devoted believers at the Church of Gross Margin.
I have no doubt that Tracey’s business will be a Great Small business that stands the test of time. Building Tracey’s business model is much more complicated than it looks and consistently making money in this business is a tough challenge. I’m sure that some of those new bastards are not making money at the moment and that they’ll fall over soon enough. One or two of them might get established and survive, but it’s clear the market is big enough and they’re going to be driving Tracey to innovate and come up with new solutions and new approaches to doing things and that’s healthy.
But buying customers at the expense of Gross Margin, that’s a disaster… I promise you.
Why some business grow, hum along and make money and others don’t
The most successful growth strategy for your small business is found between your ears.
Owning your own business can be a lot of fun and it can be rewarding at many levels. But for many small business owners, the experience is one of frustration and confusion. You’re the first one in the door in the morning and the last one out the door at night, often you’re back at it after the kids have gone to bed and most weekends there is some admin or quoting that needs to be caught up on. The kids are growing up and not getting the attention you want to give them and money remains as tight as ever.
I know the feeling. I’ve been a small business owner for over 30 years now and since 2004 I’ve been a business coach supporting business owners to build Great Small Businesses, what I refer to as a Fun Business (with a capital “F”), you can read more about what a Fun Business is in my books and also in a number of articles on my blog such as this one here.
But some business owners break through that stage and actually build Fun Businesses. Their growth strategy works, they make money, their staff are engaged and motivated, their customers love them and they find the kind of balance in their lives that is important to them.
What’s their secret?
Over the years, I’ve met those who have broken through and those who don’t, and I’ve learnt to spot what sets them apart.
The Big 7
The business owners I’ve met who do break through and do build Fun Small Businesses, all have these 7 things in common:
1. They’ve come to understand that their own time is the most precious resource of their business. They constantly ask themselves: Is what I am about to spend time doing, the most important thing for me to be doing right now, or should I be looking for someone else to be doing it instead of me?
2. They’ve learnt that being a great plumber/ architect/ florist/ software developer/ shopkeeper is only a very small part of what it takes to build a great business based on those professions. It can help and smooth the path in the early days, but to build a Great Small Business, the owner must learn to focus on the work of the business owner, rather than the work of the business. (Business development work in other words)
3. They have found the answer to the question: Why does your business exist, what is it on this earth for and why would anybody care? And then they are 100% committed to the answer; it drives their decisions and actions every day.
4. They’ve learnt to understand and even love their numbers. If you don’t understand and love your numbers as a business owner, you’re managing your business by keeping your fingers crossed, and that is not one of the recognised management techniques. (When I talk about The Numbers, I refer to many other numbers besides the financial numbers alone. There are sales numbers and productivity numbers and quality numbers and customer satisfaction numbers, etc. The trick is to find the key numbers of the health of your business and learn to manage your business by those numbers).
5. They hire the best people they can possibly afford and they learn how to give those people every opportunity to love coming to work and to get ever better at doing their work. There is not much as silly as penny-pinching on staff. The only thing sillier is not making it your absolute focus to ensure that your people love coming to work and do great work every day.
6. They constantly ask themselves where the opportunities are for systemisation. Whatever can be systemised, is… That doesn’t mean every restaurant must aim to be a McDonalds, but if something can be systemised… Do so.
7. They know they can’t do it on their own. They find great advisers and they ask them for help. Just because you are a business owner doesn’t mean you will be an expert at all aspects of business. You can find great consultants, advisers, coaches and mentors to help you in tax and financial management, leadership, marketing, HR, IT, staff management, sales and every other aspect of business you are not 100% confident with. Great sports people all have great coaches on board.
Those are “The 7 Secrets”, that all business owners who build a Great Small Business have come to understand and strive to apply in their lives every day.
Salvation wears running shoes
Now, just so we understand each other. Accepting these statements as true, doesn’t mean you will somehow automatically build a Great Small Business yourself.
To quote a religious friend of mine: “Salvation wears running shoes.”
In other words, it’s all about what we do with our insights.
But if you do print out those 7 Secrets as your growth strategy, laminate them, hang them above your desk and make it your mission to apply them to your life as a business owner, every day, you will start to build a Great Small Business, that sustains you for years to come…
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.