Business Management, Personal Development

There are several Critical Victory Factors (CVF’s) that will help business owners achieve success.  One of the key Factors is the Success Mindset. One defining feature of the mindset of successful business people is that of being a life long learner.  By beginning with a commitment to continual learning, you will quickly develop all the other Critical Victory Factors.

Tip:

A system that can help you integrate ongoing learning into your business practices is called 30/10.  It is an approach that works systematically and helps you integrate new information and skills rapidly with minimal and controlled time commitments.

In this approach, you block off 30 minutes everyday to read, research, listen to audio programs or even attend seminars.  You then spend 10 minutes thinking about how you will apply what you have learned.  If you commit to this, you will be nothing short of stunned by the amount you have learned within one year.

A helpful addition to this system is called 10/24/7.  If you review what you have learned 10 minutes after you have learned it, then again within 24 hours and then again within 7 days, it will be locked.

So remember these numbers: 30/10 and 10/24/7.  They can literally change your life.

 

 

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Business Finance, Profits

I have mentioned before that, in business, Cash is King!

To survive in business, you must have a handle on your cashflow and disciplined processes to control it. Not only do you need to improve your cashflow for Inflows, you need to also control the cashflow in regards to ‘Outflows’. Maintaining control on where and how the cash goes out in business is just as important as where and how much cash comes into your business. If you don’t have a handle on your cash Outflows, it won’t matter how much revenue the business brings in… you can potentially cripple a business by spending without discipline.

Expense Classification

The first step is to classify your expenses – Fixed and Variable.

Fixed expenses are those that do not vary with Sales e.g. rent, utilities (office), loan payments, municipal taxes, accounting fees, car expenses, etc. Variable expenses are those that very with sales e.g. cost of materials in manufacturing, direct labour costs, commission payments, variable utilities (manufacturing), sales taxes, etc.

Establish Budgets

It is critical that you establish a budget for your expenses. Without this you cannot Test and Measure your progress (or lack thereof) of cost control.

Cost Control

Fixed expenses need to be negotiated up front and monitored vs. budgeted. Key areas to watch include phone costs and office supplies. Utilities costs can also bleed profits – turn off the lights and computers at night! Know your Breakeven $Sales. (Fixed Costs/Gross Margin %)

Variable expense control includes negotiating better deals for raw materials, strict control of overtime wages and constant improvement in waste elimination and efficiency – ask your employees for help here!

Trade Accounts Payable

This is a standard form of business financing. Suppliers who grant you 30 day terms effectively loan you money to buy their products at 0% interest rate. Prudent use of credit cards can get you up to 55 days of 0% financing – but make sure you pay on time.(Many cards will also give you reward points toward that vacation you’re going to take! However, please check with your accountant and government policies on reward point usage with your company.) You can generally stretch payments a few days however be careful – your credit rating is important, so don’t abuse this process.

Having firm control of your company’s finances, including Inflows and Outflows is critical to the success and growth of any business. Take the time to know your numbers, and track them regularly.

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Marketing, Sales

Reaching your audience can be accomplished in many different ways. Large corporations invest small fortunes on television ads and national branding strategies. These approaches to marketing are designed to reach a large audience and create brand awareness. For small business with significantly smaller budgets and resources, one of the most efficient and cost effective methods of getting the word out is Direct Mail.

Now, before you go sticking postage stamps on a stack of envelopes and dropping them off at the Post Office, there are some things that need to be done. Many companies simply send out Direct Mail pieces such as flyers or pamphlets, with general distribution and no offer or call to action and wonder why it doesn’t work.  Direct response marketing can be an important tool, but it needs to be done effectively. Here’s how…

Identify Your Target Market (Create Mailing List)

Be very specific about who your audience is and then develop a mailing list around those parameters. To ensure your Direct Mail piece gets to your intended reader, be sure to include a contact name.

Speak to Your Audience

Create a message that speaks to your target audience and contains a compelling offer. If your target market is business owners with 5 or more employees, annual revenues of $1M – $5M, and a mindset for learning and growth, tailor your message to speak to them in their language. If your target market is mothers of pre-school children ages 2 – 5 years, who work from home, ensure the content of your message clearly speaks to that audience. Make your message clear, and remember to include a ‘call to action’ component to ensure a higher response rate. Including an expiry date will also result in a better response.

Create a Direct Mail Process

This is a very important step that can sometimes make or break a Direct Mail campaign. For companies with limited operational resources, consider leveraging your time by outsourcing the printing and mailing labour to a local print company that offers this service. This can also be more cost effective than going it alone, as print companies may offer discounts on postage for mailings over a certain quantity. Next, decide how you are going to follow up with your audience. Here are two approaches that will make your Direct Mail campaign more effective…

Sequential Direct Marketing Approach # 1: (Collection agencies follow this model)

  • 1 notice
  • 15 days later they send a second letter with a bit stronger tone
  • 15 days later they send another with a stronger tone than the previous letters plus the original invoice

Sequential Direct Marketing Approach # 2: (The personal touch)

Phone Mail Phone / Phone Fax Phone / or just Mail Phone

Call to tell them it’s coming

Allows you to deal with a misplaced letter

Allows you to deal with procrastinators who have maybe set the letter aside ‘to deal with it later’

Don’t lie

 

What it boils down to is, Marketing is an investment that should garner a return. Following these simple steps will help you achieve better results from your Direct Mail campaigns to see the returns you are looking for.

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Business Finance, Business Management, Profits

In my Business Coaching practice, we break the evolution of businesses down into 6 steps.  The first of these steps is Mastery.  Mastery itself has a number of components.  There is mastery of money, mastery of self, mastery of time and mastery of delivery of your product or service.

Mastery over money, or Financial Mastery, is critical to the health and growth of your business. Everything else hinges on this component. If you don’t have a clear understanding of your business financials, you will be lacking the key tools for making sound business decisions, and all other areas of your business will suffer.

Mastery over the fundamentals of the financial health of your business is a great place to start.

This includes:

a)       Break Even Mastery – Know the break even point in your business… how much product/service do you need to sell each day to cover costs

b)       Profit Margin Mastery – how many customers at what average dollar sale allows you to hit your profit goals, or alternatively, knowing the profit margins on your different products or services

c)        Cashflow Mastery – understanding the cash movements within your business and how those movements affect the decisions you wish to make.  This includes maintaining management over your receivables, your payables and your collection procedures; and

d)       Reporting Mastery – the habit of regularly producing reports on income, costs, margins, receivables, payables and cashflows

Each of these fundamentals of Financial Mastery are a good place to start to gain control of your business and work towards the next steps to success. As your business grows, these numbers will change, so you will want to review and update them regularly to know where they are at daily, weekly, monthly and annually. It may seem like a lot at first, but if you get in the habit of reviewing them regularly and default time into your schedule (Time Mastery), it will become a simple routine task.

 

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Marketing, Sales

The first step in the sales process is prospecting. A great strategy for both prospecting and for moving prospects through the sales process is developing Strategic Alliances. Here are some tips to help you form and leverage Strategic Alliances:

1. Identify potential Strategic Alliance partners

The best partners for a successful strategic alliance are businesses with related specialties that sell to the same decision makers (target market). Any size business can form a strategic alliance. For example, an ergonomic specialist and a designer can have a great strategic alliance. By seeing how design is affecting functionality, the ergonomic specialist can recommend some design solutions based on education that the designer has provided. To act on the recommendation, they have to bring in the designer. Similarly, the designer, when doing a design, can bring in the ergonomic specialist to review how these people live and use the space to ensure the design incorporates functionality consistently with their behaviours.

How do you find these partners? First of all, ask yourself, “Who do I know today that’s in a contingent business to mine,” and, “Who else has the same target market as I do and sells to my primary decision maker?”

If no names come to mind right now, then consider these options for finding strategic alliance partners:

  • Attend networking functions to find related businesses
  • Read your local business paper to identify people in adjoining businesses
  • Ask your customers about other suppliers they work with and respect

Remember, all you need to get started is just one other business to partner with. You can add more strategic partners over time.

2. Get to know each other

You need to invest time upfront to really understand each other’s product/service offering. Also, since your reputation is at stake, when you bring in someone else, you need to be confident in that person’s ability to do the work, take care of the account, act ethically, and so on.

Don’t rush this process or you may be sorry.

3. Pick an initial project to work on together

Do something low risk, like put on a joint seminar. It is also a good chance for you to see each other in action. In doing this type of project, divide up the work according to your expertise.

4. Expand the relationship

Once you become comfortable, you can begin to do more together. For example:

  • You can begin to confidently bring each other into meetings with clients. You know that your work only covers certain aspects of your customers’ needs and that you now have trusted resources to help out with other areas.
  • You can co-market in other ways. One way is called Host Beneficiary. In this relationship, the host invites their clients to receive some service or product or information from the strategic alliance partner (the beneficiary), who then has the opportunity to be introduced to a new population of prospects.
  • You can feature each other in your e-newsletters, websites and blogs, etc.

If you’re still trying to go it alone out there, consider forming a Strategic Alliance with other companies. If you choose the right partners, it will make a huge difference in your business.

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Business Management, Systems

In any business, it is critical that tasks are performed in a consistent and timely manor. To accomplish this, work processes should be put in place to be followed for each area of your business.

A work process is made up of a series of steps/tasks/activities and has a beginning and an end. In business, everything is a process – hiring process, order taking process, product/service delivery process, etc. They start with input (materials or information), and by a series of steps/tasks, you produce a product or service.

As your business evolves, it is necessary to update and improve processes to meet the growing demands of your current situation.

First understand, before you change

If you want to improve your processes, it is best to get a complete understanding of what you are currently doing. Start by documenting or mapping your processes. Bring together the people who know exactly what the steps of each process are, and document them. One effective way to do this is to use sticky notes on the wall or a board. On each sticky note, write out each individual task required for each process. Place the sticky notes on the wall or board and move them around until you are satisfied that you have documented each of the current steps. The advantage of using sticky notes is that you can move them around until you are satisfied that you have the correct steps in the correct order. Then draw it up… type out the process into a document, create a process chart in PowerPoint… you could even go so far as to use software programs like Visio.

Improving the Process

Now that you have a complete understanding of the “As Is,” you can work on the “Should Be.” Brainstorm with your group. This is where you want to utilize the experience of your team to determine what can be changed and improved. Remember to document who will be responsible for executing each step of the process and the time frame each step is to be completed in. This is a great opportunity for you, as the business owner, to look at each task and determine if it is something you still need to perform or if some (or all) tasks could be delegated to others. Once you have agreed on the best changes and improvements, record it and be sure to communicate the new process to everyone on your team.

With your new streamlined processes, the improved productivity will show up in your bottom line.

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Business Management, Personal Development

Are you looking for new customers, but they just aren’t coming in the door… try using what we call in the business coaching world “The Law of a Vacuum!!”, and see what happens.

To describe what the Law of a Vacuum is, have you ever moved into a bigger house with a bigger garage, bigger basement, more cupboard space, more storage space… what happens? Those new spaces that you didn’t have enough ‘stuff’ to fill when you first moved in somehow fill up.

Have you ever cleaned out your closet only to find 6 months later that your closet is full again?

Those empty spaces you created with the new house, or cleaned out spaces are a Vacuum. In nature, everything grows to fill the available space.

Do you want new customers?

If you want new customers, what do you think you should do? Ask yourself this, “Do I have room in my business for new customers?” If the answer is, “No” …

Make room for new customers…

  • Go out today and buy new files and a new filing cabinet.
  • Create more files & folders in your computer systems to accommodate new customers.
  • Block out portions of time in your calendar for your new customers’ appointments.
  • Get rid of some customers you no longer want.
  • Make room for new customers wherever possible.

What if you wanted to expand your team…

  • New desk(s), phone(s), etc.
  • New computer(s), office supplies
  • New company uniform(s), company t-shirts, nametags, etc.

So, create the Vacuum in your business, and watch nature fill it.

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Business Finance

In business, cash is king, so having predictable cashflow is essential. I have heard of people working all night to deliver a product or service to a customer. But I have never heard of an organization staying up all night to deliver an invoice to a client.

To improve a business’s cashflow, typically one of the first questions I ask as a Business Coach is, “What is your invoicing process?”

Here are some key questions to ask yourself…

  • Is the invoice delivered with the goods or service?
  • How many times do I say, “I’ll send you the bill.”
  • Do I leave invoicing to the end of the month?

Many companies, particularly bigger ones, have cut off days for monthly payments. So if you miss delivering the invoice for the current months cut off date by one day, it may be 30, 40, or even 60 days before you get paid. Why let money sit in someone else’s bank account.

  • What does it say on the bottom of our invoice or statement?

If you give people 30 days to pay, they will take 40. What impact would it have if your invoices said “Due on receipt.”

To improve your cashflow, make collecting the money from your customers as important as meeting and delivering their needs. It’s important to your business.

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Business Management, Systems

Every challenge in business is a chance to examine and get better. If you have customers not paying invoices on time, your first reaction is to get on the phone and chase down the slow payers. In fact many organizations have people and departments dedicated to credit collections. But… what if you took the opportunity this challenge affords, and dig a little deeper… Now, I am not saying you shouldn’t take action to obtain payment for overdue accounts; however, putting a little time into some analysis can reveal vital information about your business. Often slow or none payment of accounts has a lot to do with the service you have delivered to the customer. To find the root cause of any problem, the exercise of asking “Why” is a great place to start digging. Keep on asking “Why,” and then “Why” again until you get to the root issue(s).

You may find many issues including…

  • A flawed sales process – you did not capture what the customer needed
  • A flawed order taking process  – you may have sent the wrong quantity
  • There may have been a misunderstanding of price
  • The delivery may have been too late for the customer
  • A failure in the production process indicated by product quality issues
  • A flawed packaging process – the product arrived broken
  • A flawed shipping process – you packed the wrong product
  • Decide if you really want to do business with this customer… are they costing time and money? Fire them. You choose who you do business with.

Examining your slow paying accounts can be a wealth of information to be used to find weakness in your business. It may have little to do with the finances of your customers, or you may have chosen to do business with weak customers.

Your customer maybe using your problems as an excuse, get better and do not give them any excuse.

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Business Management

It’s a basic business principle that the more you know, the easier it is to make decisions about what’s working and what’s not. If you are not Testing & Measuring the critical areas of your company’s performance, it is likely you are allowing money to escape from your company and therefore your wallet.

For example, lead generation is a key driver in every company, but few businesses know how many leads they get each week. Even fewer know where those leads came from. Information such as lead source, dollars spent, revenue generated, etc. is invaluable when making decisions regarding marketing and advertising.

The most effective method of tracking lead generation strategies is to develop a database that includes details such lead source (networking event, Strategic Alliance, referral, marketing campaign(s), etc.), first contact date and last communication details, sales stage, revenue generated, and next steps. These details, and more, are vital in making informed decisions regarding marketing campaigns. Through this Test & Measure system, if you see more revenue generating leads coming in from a particular marketing campaign, you know you will want to continue with it. If a marketing campaign isn’t generating leads, you need to rethink your campaign. The point is, you’ll never know unless you are continuously measuring the number and source of the leads you get. So…Keep meticulous records of where all leads are coming from and how much they spend once you’ve converted them to customers.

Testing & Measuring doesn’t stop with lead generation. There are many other areas within every business where well tracked and documented data is invaluable, even critical, for making good, sound, profitable business decisions.

The areas we should be Testing & Measuring:

  • Conversion Rates – converting leads to customers
  • Quality Control – delivery of service or product
  • Customer Satisfaction
  • Referrals
  • Communication within the company
  • Adherence to the Rules of the Game
  • Collection Process
  • On-time delivery/shipping
  • Invoicing accuracy
  • Etc…

Identify the key drivers in your company and ensure that you take the time and effort to put Test & Measure systems in place for the long-term. The information you gather will be vital to making good business decisions and growing both your business and especially your profits.

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