Leadership

Many owner operated businesses grow quickly in their early days but more often than not they reach a plateau. Sales and profit growth slows, if there is any at all.

Many business owners are happy with this particularly if the business is generating enough profit to be comfortable.

The problem is that while your business is standing still, others around you are growing theirs.

So ultimately, you start to lose out to the competition. You lose market share or your unique identity or employees, etc.

And then you have to work twice as hard to keep up.

Strategic planning

Image courtesy of freedigitalphotos.net

There are a number of reasons for the growth of a business to stall. The more obvious reasons, such as not being able to find enough new customers or price-sensitivity in the market place are often symptoms of other constraints in the business. These are not faults in the business, rather constraints that are more or less inevitable given the systems and structures needed to operate a business of a given size. In owner operated small to medium sized businesses, the constraint can sometimes be the owner themselves, as described here:

  1. A small business revolves around the owner. All decisions have to be made by them or run past them causing a bottleneck in the running of the company. The business becomes more and more dependent upon the owner because the employees stop taking decisions. Ever heard a business owner say: “I wish I could find staff that would use their initiative”? It’s often a symptom of the owner making all the decisions. As a result, their employees don’t feel that they are supported in making their own decisions or in taking a risk or two that would benefit the company. As the business growns it is more and more important that issues are dealt with by individuals, teams and department heads.
  2. This situation is often compounded by the fact that employees may have a strong loyalty to the owner of an owner operated business. This is fantastic, but as a business grows it needs to have more than one leader. If employees remain loyal to the owner instead of switching that allegiance to the company as a whole and the long-term future of the company, then business growth will inevitably become stunted as conflicts arise.
  3. At some point in the development of a business, the owner must spend most of their time on the strategic aspects of growing the business, leaving the day-to-day running of the business to a capable manager. Failure to spend sufficient time setting the strategic direction of the business and helping the team produce a realistic action plan to get there is a major cause of businesses failing to grow.
  4. While the owners role should evolve to a more strategic one, it is limiting for new ideas to only come from the owner. New ideas should be encouraged from all employees. In fact, why not from all stakeholders including customers, suppliers, alliance partners?
  5. The culture of a start up business is quite naturally a reflection of the values and beliefs of the owner. This is generally what drives the successful development of the business during the start up phase. It is therefore quite difficult to give this up. But as the business grows the culture has to develop beyond that of the owner – still strongly influenced by them, but allowing the influences of employees, customers and their shared experiences to be reflected.
  6. Small businesses often have their biggest wins when they go the extra mile to get a job done: doing something outside the normal procedures, thinking out of the box, taking a chance in order to deliver great service to a customer. If a business is to grow, however, these situations should become less frequent. You can’t continue to run a business by the seat of your pants. Celebration of a job well done needs to focus on getting systems in place to avoid seat-of-the-pants activity. It might not be as exciting, but it will allow the business to grow faster.
  7. As a business grows the stakes get bigger and it gets harder to make decisions that may jeopardise what the business owner has already achieved. Employing more people in order to increase sales but when the current sales won’t quite cover the employment costs is a major impediment to growth. The fear of losing hard earned sales and profits will equally stop a business from making bold strategic decisions.

As businesses grow it is natural to go through multiple plateaus – growing until they reach a size that is supported by their current structures and systems. Each time this point is reached the structures and systems must evolve to support a bigger organisation, otherwise the business will falter and ultimately fade away.

This is a natural process. A small business employing three people can’t be run in the same way as a multi-billion pound global conglomerate. Even if you envisage your business becoming one, you have to start with business systems that support the business today and the near future, not those that support a multi-billion pound turnover…

So take a look at your business systems and the way you operate. Are they holding you back? How do you need to change them to support a new phase of growth?

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Business Management

If your business is like many out there, it’s probably been characterised by a period of rapid early growth followed by a slowing, culminating in a plateau. You have some good years and some not so good, but overall you are doing pretty much the same as always.

Why is that? You probably worked out quite quickly how to market your products and sell them and you grew the business until everyone in it was at capacity.

The distractions grew. You had to recruit more often and this took time. More employees came with more expenses. People left or were fired. You had to replace them. Taking more of your time.

Perhaps customers started to complain a bit more regularly about the quality of your delivery and then you started to loose one or two. Getting more sales wasn’t the answer – you lost customers as quickly as you found new ones.

So as a result, your business growth slowed and reached this plateau. You can spend more time and money on sales and marketing but to no avail. You surge forward but then drop back. Getting more sales isn’t the answer on its own.

The majority of owner managed businesses get stuck in this situation. They may be profitable, but their owners are working harder and harder to stand still. That’s why I ask, is your business stuck in neutral.

I’m sorry to say that the key is to understand that you, the business owner, may be the main cause. If you are the centre of everything, trying to stay in control, you naturally become the main constraint on growth. Let me ask you, can you go on holiday and turn your phone and email off for two weeks? If not, then it’s likely that you are the constraint.

So how do you break out of this plateau?

The answer is that most businesses that get stuck in this phase don’t have their processes written down. It’s all in the head of the owner or a few key employees.

So to break the cycle, we start by documenting all of the day-to-day activities that need to be done so that anybody in the company is capable of doing them. This might mean writing them down, or creating flow-charts or pictures or even videos of the processes in action – whatever it takes to document them simply for anyone to follow and carry out.

This activity in itself makes the business less reliant on you the owner. And it will free up your time as you can now delegate more activities. Time you can use to document more systems and processes to lay the foundations for growth.

With proper management systems in place you can put your business back in gear and kickstart the growth you’re looking for…

 

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Marketing

A host beneficiary is one of the most powerful and cost-effective marketing strategies available to small and medium sized businesses. If you’re not doing host beneficiaries then you are probably spending too much on marketing and not getting the return on your marketing spend that you could.

A host beneficiary is where you market to another businesses’ clients and prospects in such a way that creates a win:win:win scenario. Their customers win because they get great additional value. The host business wins because their clients buy more services from them and you win because you market and sell your services to their clients.

This may become clearer with a couple of examples. My coaching business, for example, has the same target market as say accountants, solicitors, web-designers, marketing consultants, etc. We don’t compete with any of these directly – we offer different and complementary services. So if we can help their clients to become more profitable then that can have a direct knock on effect for their business. For example, if we work with the client of an accountant and they end up growing and taking on more staff then they may need to add payroll services and monthly management accounts to their basic VAT and annual reporting.

Image courtesy of Free Digital Photos

Another example might be a carpet cleaning company who sets up a host beneficiary with an estate agent. The cleaning company offers a free carpet clean to the estate agents clients (either before or after a move) for the opportunity to quote to clean the whole house. In return, the estate agent receives a 20% incentive payment for any clients who buy the whole house carpet clean.

There are many ways this can work – it’s limited only by your imagination.

So how do you go about setting up a host beneficiary?

As with any marketing, start by being clear on your target market as this will dictate who your ideal host businesses will be, what offer you will make to the host and to their clients and how you will approach them.

By far the easiest approach is if you already know someone in your network that has a complementary business with the right target market. It’s an easy step just to discuss possibilities and come up with the most advantageous plan all round. Ask around in your network as well.

If you don’t already know someone in your network in an appropriate business, then you will need to find a way to approach them.

You could call them directly, but sometimes a letter or email can be a better first contact to introduce the idea before calling.

If you choose to write a letter, what should go into it? A typical host beneficiary letter might go along the lines of:

  1. Attention grabbing headline or insert
  2. Sub-headline explaining the headline or insert
  3. Introduce yourself and service benefits
  4. Raise a common complaint their clients will have that they can’t deal with directly but that you can or a common cause for concern in your industry that their clients will have come up against… e.g. sub-standard competition
  5. Ask for their help in overcoming this
  6. Offer them an incentive (e.g. 10% commission on sales)
  7. More about you and your business – what makes you different, better than the rest, proof, testimonials, case studies.
  8. Offer them a test.
  9. If they like it they can…
  10. Offer the same test to their clients
  11. Explain that only if their clients like the test will they be offered the chance to take up the product/service – no hard sell…
  12. Explain your guarantees
  13. Provide proof that the guarantee is valid and valuable
  14. Finish with a call to action…

This can become a long letter and if you don’t feel it is appropriate you could try the shorter, simpler, lower key approach such as:

Dear <Name>

I noticed that you currently offer <services> to <target market>. We are a business that works with a similar customer base helping them <benefits of your service>. As we are not in direct competition with each other, but offer services that potentially complement and support each other, I wondered if you might be interested in discussing a way in which we could recommend each other’s services to our mutual advantage.

Please drop me an email to let me know whether this suggestion is something you would consider worth exploring further.

I will give you a call during the following week to arrange to have a conversation at your convenience.

Kind regards

Your Name

website address…

As with all marketing, you will only know what works for you by testing and measuring the responses you get. If you send letters like this by email, you will want to measure open rates, click throughs to your website, etc. By letter or email, you will want to measure the response rate in terms of inbound calls or meetings booked from a follow up call.

Similarly, as with any marketing, consistency is important. If you’re going to do this you need to do it regularly. Over time your averages will tell you which approach works and is cost-effective. Then you can tweak offers, headlines and wording as appropriate.

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Business Management

ActionCOACH defines a business as a commercially, profitable enterprise that works without the owner having to be there. This could be considered as a self-contained business. In other words a “business-in-a-box”.

So what is a business in a box – what are the key elements that go into building one.

Let’s start with strategy – every business has one. It might stem from an idea or an innovation. A new product or service that people will want or need and/or a new way of delivering it. It might even be as simple as: “this town doesn’t have anyone doing what I do, so I’m going to do it here”.

Taking this another step, there may be a vision of what the business will look like when it’s complete and the impact it will have in the community. This might involve some market research to uncover target markets and their needs and some research and development or prototyping to work out how best to fulfill them. It will also involve some decisions on how products or services will be delivered to customers, which may be encapsulated in a mission statement.

All of these things can be captured in your “business model”. A great way to do this by the way is with a business canvas (website and amazon link).

Sometimes this is all very simple and informal and may not even be written down.

Together with the strategy, a business also needs to deliver to its customers: a plan to execute the strategy and a set of processes and systems to make it happen. Again, to start with these may be informal. Indeed they often reside in the owners head. Nonetheless they exist and are essential and at some point must be written down.

A third element is the team. Even a sole trader has a team. A team made up of an accountant, solicitor, business advisors, bank manager, suppliers. Quite quickly, though, most businesses take on employees as well and create what is formally thought of as “the team”.

These are the core elements of a business. You can find descriptions of something like this in the book “Good to Great” by Jim Collins or “The Rockefeller Habits” by Verne Harnish.

But this isn’t the business in a box. It’s a triangle.

Let’s delve deeper.

Looking at execution, what kind of systems are needed. These usually fall into three main areas: sales and marketing, operations and finance. A business needs systems in each of these three areas.

So we have a second triad when it comes to systems. A detailed analysis of this is given in Michael E Gerber’s book, “The E-Myth Revisited”.

What about the team. To make a team most effective, they need to know what they are aiming to achieve – their quarterly and annual goals – and have a plan to achieve them. Finally, they need to have a framework within which to work that allows them to take responsibility for decisions within their remit and that places some boundaries on appropriate behaviour. This can be encapsulated as the “Rules of the Game”.

A good team also needs a good leader. There are many and diverse opinions about what makes a good leader. However, at a practical level, a large part of leadership is getting all of these elements in place to provide clear direction, support, empowerment and communication.

These then are my nine elements to building a business:

  1. Strategy
  2. Systems
  3. Team
  4. Sales and Marketing
  5. Operations
  6. Finance
  7. Goals
  8. Action Plans
  9. Rules of the Game

When we put these together we create a “Business in a Box”. How?

What do you see in the centre of the triangle? Do you see a hexagon or a cube tilted on it’s edge? That’s right: a business in a box (with a bit of out of the box thinking…).

How do we go about creating the business in a box? Where do you start? It’s clear with a startup business that the best place to start is at the strategic level. But what about an established business? Is it possible to “retro-fit” this framework? What’s the right sequence to do that?  Well the answer is that there are six steps to building your business in a box, but these will have to be the topic of a future article..

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Marketing

I was asked the other day by a business owner how they could get more clients. They were struggling to bring in new leads, just getting by with a few referrals. His main marketing media was out-bound emails to prospects.

The problem with such an open question is the response will often end up being quite generic. However a quick look at his website also yielded some clues as to why his email campaigns might not be working.

The first piece of advice was to do more: letters, flyers, networking. Just relying on email campaigns is not enough. Even it it was working well, this wouldn’t be enough, just in case it stopped working so well. However, in this case, it wasn’t working, so needed to redesign his email strategy and think about which other marketing media he would use.

However, before deciding on that he needed to rethink the message he was giving his customers. His website revealed lots of insights about the company’s technology, processes, innovative ideas, expertise and flexibility. However, none of this was written in a way that:

a). allowed the reader to know it was them that was being talked to

b). what need of theirs was being addressed

c). or how this need would be addressed.

This was being repeated in his email campaigns. So he needed to update his website as well as his emails.  The questions he needed to ask were:

  1. Who is his target market? He needs to be as specific as possible. What problems do they have that his product or service solves?
  2. What does his target market want and why? What specific services will he offer them and how will they use it? How will they know they need it?
  3. What does his product or service do for his target customers? So, let’s say he makes websites. His customers aren’t buying a website. They are buying a “place” to sell things, or a resource to help their customers decide whether to buy from them, etc.
  4. Why would they buy from him?

His website had some testimonials that described the great experience they had working with him. This is fantastic but it gave no clues as to why they decided to buy from him in the first place. Why him and not someone else? How did he help them to overcome any fears of using him instead of their current or previous provider? He’s going to ask them to answer these questions.

The more focused his image of his target market, the easier it will be for him to decide what the benefits are for that group and to craft his email and other marketing campaigns accordingly. So instead of sending out email blasts to thousands of random people, he can send out a smaller number within a defined target market that he can talk to specifically about the benefits of his service to them.

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Customer Service

It can cost a fortune to find new customers.  Websites, SEO, outsourced social media, advertising, promotions, exhibitions, trade fairs, PR, tendering, sales collateral, sales visits, negotiating, loss leaders…

It’s so much easier when a customer has already bought from you.  Hopefully, they know what they’re getting, they know what to expect and they like your products and service.  At least they liked it enough to part with their hard earned cash once instead of going to one of your competitors.  Which is a huge hurdle.  As a result, it’s typically four to eight times cheaper to sell to an existing customer than it is to a new customer.  So how can you keep them coming back?

Research has shown that over two thirds of customers who leave to buy from a competitor do so because of the indifference they perceive in the vendor – that is they don’t think they care enough about them.

So here are seven steps to go beyond customer satisfaction and start showing them that you really care.

1. Make it easy and pleasurable for your customers to buy from you.  Smile, be polite, offer great service above and beyond their expectations.  Often it’s the little things, like taking goods to their car, or posting it for them to a friend.  Just little things that they weren’t expecting that makes life easier.  If buying from you is at all inconvenient and they find an easier way, then they’ll take it.  This is becoming more and more prevalent as people have less time and more money.  And be consistent, so they know what to expect every time they buy from you.

2. Now step it up.  Identify your ideal customers.  Look at the customers you currently have and what it is that makes some better customers than others.  Why do they buy from you.  We’re going to build your customer service charter around your ideal customers so spend some time thinking about who they are, what they want, how and why they buy from you.

3. Survey your ideal customers.  Ask them what they would regard as excellent customer service.  Does it match with your own vision from step 2?  Combine the two and create your customer service charter.

4. What can you guarantee your customers?  This has to be something you can promise to deliver every time someone buys from you, and it has to be something that they will value (there’s no point promising something no-one cares about).  Start with the processes you have and decide what you can promise as a result.  You will improve your processes later and better your guarantee to keep your competitors one step behind.  Remember to under-promise and over-deliver.  That doesn’t mean offer an under-whelming guarantee.  Rather it means under-promise on a startling guarantee.

5. Roll out your guarantee and customer service charter to your team.  Get their input and get them involved.  They’ll know best how they can be delivered.

6. Monitor your processes and delivery on your promises.  You can’t manage what you don’t measure, so put some metrics in place and keep a consistently regular eye on them.

7. As mentioned in step 4, keep improving your processes and your promises.  As you keep on over-delivering and you find that you can do this consistently, build it into your process and promise.

Customers are willing to pay for service if it is a service that want.  If the service exceeds their expectations they will keep on coming back.  What’s more they’ll tend to say good things about you, effectively selling on your behalf.  When this happens, you might be able to save so much money on your advertising that you can plough some of it into rewards for your best customers with a referral scheme or members club.  Making it even more likely that they’ll keep on coming back!

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Marketing

In the news again this week is that the economy is shrinking by 0.5% triggering all the doom-mongering for businesses again.

But, as a business owner, if the economy has shrunk by 0.5% should that worry you?  If your business cannot thrive in an economy that is 99.5% of what it has been then I believe there are bigger issues in your business than the economy.

So my advice is not to worry about the shrinking economy.  You can’t do anything about it anyway.  Sure you can complain.  You can write to your MP.  You can add your vote to business groups lobbying the government for tax reductions and legislation to force banks to lend to you.  But those things are going to happen so slowly, if at all, that it’ll all be too late if things are that bad for you now.

So, forget about the economy, save your energy for something more productive, and start asking different questions.  Like:

  • Why is my business struggling so much on 99.5%?
  • What can I do about it
  • How can I increase my market share?
  • How can I find new markets?
Growing Your Business in a Shrinking Economy Needs New Ideas

Growing Your Business in a Shrinking Economy Needs New Ideas

If you don’t know how to increase your market share or capitalise on the new economics in your industry, ask someone for help.  There are lots of people out there who offer help.  Your accountant for one – you’re already paying them.

Remember though, when you’re talking to your accountant, your financial condition is a symptom of the underlying health of your business.  You can treat the financial symptoms but you also need to treat the underlying issues.  You might say dealing with the financial symptoms alone is a bit like treating cancer with morphine.  It will take away the pain but you will still have the cancer.  You need something else as well.

You can’t solve a problem with the same thinking that caused the problem to exist.  If you are struggling in this economy then you need to change your thinking and find someone who can help you to think differently.

I was talking to a business owner the other day whose business has shrunk much more than 0.5%.  He’s in a business related to the property market which has been harder hit than that.  And he’s done a great job of cutting his costs so he’s making more profit from the work he’s doing.  The problem now is that he can’t cut his costs any more.

Within a few minutes of talking together, he had come up with at least two different ways to increase his market share that he hadn’t previously thought about.  I won’t divulge the nature of his business or the ideas he came up with at least until he’s had a chance to put them into practice – so watch this space.

Perhaps the biggest opportunity for him lies in identifying new markets or opportunities.  The property market is moving, albeit in a different direction to the one it has been moving in.  That means there are new opportunities.  The time to worry is when there is no movement.  Where there is movement, there are opportunities but he needs to look in the opposite direction.  How can his business with their skill-set offer a service to people in a declining property market?  Again, within a few minutes he had come up with at least one idea he could quickly put to work.

To reiterate then: don’t worry about the shrinking economy.  Look at it differently – you might find opportunities there.  And if you find it hard to refocus your thinking, then get some help.

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Business Management, Time Management

In my experience talking with business owners it’s not uncommon for them to work long hours.  It really brings it home when they work out an hourly rate for their work and realise they’re not the highest paid person working the fewest hours in their own business.  In the business they own.  This results in the conflict shown in the diagram:  the conflict between the time required to run a business and the desire to spend more time with the family and pursuing hobbies.  The details may vary but it usually comes down to something like the one shown in the diagram.  It goes like this:

  • In order to have a better quality of life I need to grow my business so that it makes more money for me and my family (and my employees).
  • To do that I need to work more hours (because I can’t afford to pay someone else to do the work if I’m going to make more money from it).
  • However, in order to have a better quality of life I need more leisure time to spend with my friends and family.
  • In which case I need to work fewer hours.

As you can see there is a clear conflict as shown by the two diametrically opposed needs. As a result of this conflict, many business owners resign themselves to either:

  • forever working day to day in their business and working long, long hours, or
  • giving up on growing their business any further and never realising its full potential or their dreams.

In reality then, they own a job rather than owning a business.  The business won’t function fully if they are not there, and as a consequence, the business never really becomes the financial asset that it should be.

As I say, it’s relatively common, and while the solution is simple, it’s often not easy.

Here’s a simple three step process to break the conflict:

  1. Make the work more profitable to increase cashflow.
  2. This creates options for bringing people into the business, even part time, so that more work can be done to further improve cashflow.
  3. The third step is to start documenting everything that goes into running the business so that ultimately anybody can do it.  This step usually ends up improving processes as well so that they are more efficient.

Then as the profits grow you can start to step away from the day to day operations of the business safe in the knowledge that everything that needs to happen in the business can be done by someone else.

Simple right.  But not always easy.  It takes a certain amount of time, planning, prioritisation, commitment, persistence, a system and sometimes additional knowledge and skills.  Someone to hold you accountable to stick at it often goes a long way too.

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Marketing, Sales

Running through your business is a chassis.  The way you build your business around this chassis dictates what your business will look like.  It’s a bit like the old beetle and Porsche 911.  They had the same basic chassis, but the cars they build around them were quite different – I think you’d agree.  It’s the same with the Jaguar X-type and the Ford Mondeo.

So let’s take a look at the basic chassis running through every business and some ways to build your business into a Porsche or Jaguar, rather than a Beetle or a Mondeo.

The business chassis is made up of five component parts. These are the five things that all businesses should have in common:

  1. number of leads
  2. conversion rate (number of sales divided by number of leads)
  3. average number of transaction (total transactions divided by number of unique customers)
  4. average sale value (£)
  5. average profit margins.

The exciting thing is that most business owners don’t know the numbers associated to any of these five areas even though they are a critical part to running any business.  Exciting because, just by starting to make measurements in these areas in your business you can make a huge improvement.

Porsche

Turn your Business from a Beetle into a Porsche

Let’s first examine “why” these areas are so critical to your business. These five components are called the Business Chassis because your entire business “runs” on these components. No business operates without them. These are fundamental. And, when you consider them as a maths equation, they represent the fundamental math that leads to business growth and success or business failure and death.

Here’s the maths.

A. Number of Leads Generated X Conversion Rate = Number of New Customers.

If you intend to add more customers, you must do at least one of two things. You must increase your number of new leads (those who are aware that your business exists) or increase your effectiveness in converting those leads into customers. Both can be done but both require specific strategies to make your efforts effective and productive.

B. Number of Customers X Number of Transactions (the frequency of purchase) X Average £ Sale = Total Sales.

Once you know your total number of customers, then you can multiply that number by their average purchase frequency to get the total number of transactions you should expect in a period. Then, multiplying that number by the average ticket price for a sale and you get the total revenues generated during that period.

If you want to increase your revenues, you must either increase the frequency of purchase of your existing customers or get them to buy more each time they visit with you. Again, both are achievable but both will require different strategies to get the results you want. Focusing your strategies on your very specific Business Chassis goals is a critical part of success.

C. Total Revenues (£) X Average Profit Margin = Total Profit (£)

If you want to increase the profitability of your business, then you must find ways to improve your profit margins so that you make additional margin dollars on each and every transaction.  Again, there are several strategies that will work to make this happen. You simply must decide what you are going to accomplish and implement the strategies in a focused manner.

This may not be the way you traditionally look at your business.  But here is where the magic comes in. Because each one of these measures is multiplied, we magnify the result. In other words, since each component is multiplied by the others, even a small change in each component can result in a large change in the bottom line profit.

For example, a 10% increase in each of the 5 components of the Business Chassis will result in a 61% increase in the bottom line profits! Small improvements focused on each of these five areas will have a dramatic increase in your business. Sound too good to be true? It is real- trust me!

This is a POWERFUL concept that most business owners overlook. Simply understanding how the math equation works is game-changing. Then taking the time to develop the specific strategies to use to make the improvement happen can change the future course of your business.

What specific strategies can you identify to improve each of the five areas discussed here?

  1. How can you generate more leads: new marketing or improving your current marketing or both?
  2. How can you convert more of them into sales? Do you have a sales process?  Do you have sales scripts?  Do you follow up?  Do you have a dedicated sales team?  Do they all do the same thing?  Who gets the best results?  Why?
  3. How can you get people to come back?
  4. How can you encourage customers to buy more in a way that helps them to enjoy their purchases and value your service more.
  5. How can you increase your overall profit margins?  Lower costs, increase prices, improve your product lines and customer base?

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Business Management

“You cannot manage what you do not measure.”

To assess the impact of any changes made to the business it is necessary to understand where the business is now. This makes it possible to track whether the changes are creating positive or negative change.

Before introducing any new strategies into your business measure the results the business is currently getting. Then measure daily/weekly/monthly results to track changes.

Eventually you will need measures in all of the key areas of your business: Sales, Marketing, Financial Management, Delivery, Quality, Employee Performance, Customer Satisfaction, etc.

However, if you currently measure very little in your business then start with just a few measures and build up.  I recommend you start with measures of your sales and marketing, as this is no doubt where you will want to grow first.

So what key measures do you need in sales and marketing.  Let’s start with two measure: how many enquiries you have coming in to the business (phone, walk-in, email, etc.) and how many of those turn into sales.

If you don’t already do so, then start asking where every single one of your enquirers heard about you.  This will tell you how effective your current marketing activities are.  If they are a bit vague, ask what it was that made them call in today.  If they say that they were just passing, that’s fine too – it shows how well your shop-front or location is working as a marketing tool.

This is fundamental to your success.  If you are spending money on marketing and you don’t know if it’s working then you don’t know if the expense was worthwhile or not.  You must find out.  Some marketing media can have in-built ways of tracking, such as dedicated Yell phone numbers and your e-commerce system.  It’s important to check the reports for these as well, even if you’re asking your prospects and customers.

If they are an existing customer, then record that too – we’ll want to know later how often people buy from you.

So to summarise start recording your:

  1. number of enquiries
  2. where they heard about you
  3. whether they are an existing customer or not
  4. whether they bought or not
  5. and what the sale value was.

A simple table or spreadsheet can capture this in most small businesses.  If you have multiple salespeople, get them to complete one each and summarise at the end of the day and week.

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