More money in your pocket
Did you go into business to become RICH?
If the answer is yes, then this is for you.
Imagine sitting on the beach in the Bahamas, sipping Mai Tai's, and running your business remotely, knowing the money is flowing into your bank account and filling your pockets every day.
Most business owners start out with an uphill battle to firstly Survive, then to Thrive and (hopefully) ultimately to Fly.
Building the business to the point where you can leave it, even for a few days without it falling apart, is a major and successful achievement. But how do we get our business to that point?
There are 3 major components to building and growing a business to bring about the "Money In Your Pocket" dream
Having systems in place can help to reduce the burden on doing everything yourself. This means much of the business runs through a series of repeated daily activities that keeps the wheel turning. Products / Services are continually provided to a constant stream of customers on a daily basis.
Without having to re-invent the wheel, the Systems within the business are designed to automate the sales and orders, as much as possible. The quicker and smoother that products and services are delivered to the customer, then the faster the cash will flow into the business.
Three things you will need when SYSTEMISING your business:-
1) A Standard Operating Procedure (SOP) for every task, job, position and process within the business. Work through each step and "Flow" of your business from the Front Door to the Back Door and Top Floor to Bottom Floor. See your "SOP's" and "Work Flow" as individual tasks combining to make a whole, like each piece of a giant jigsaw puzzle that creates a big picture when all put together.
Standard Operating Procedures list down the step by step actions that need to be taken to complete a task. Any information that would be part of completing the task is helpful to include in the SOP to ensure the normal procedure is followed by anyone who is charged with that task.
Having Standard Operating Procedures allows for new recruits and seasoned team members to follow the same process every time. It reduces the risk of mistakes, and ensures a consistent Customer Experience every time.
2) A Spot Check System for regular monitoring of the business performance
Spot Checking is an important part of maintaining ongoing business success. Imagine you appoint a new Sales person or Service Technician. How would you know if they were doing a good job, or even saying the right thing to your customers? Unless you went and asked the Customer "How Good was my worker?" you may never know unless you Spot Check
It may be as simple as contacting 3 customers from last week and seeing if they are happy with the service they received. Or checking 4 products / orders at random before they leave the factory floor for accuracy. You could also spot check the Profit Per Job margins to make sure that each job is bringing money in rather than costing too much. This is as simple as calculating 4 invoices against the Cost of Goods to see if the profit per job is High or Low.
Spot Checks can be simple and quick, but give vital information about what is happening within your business in a flash. Having several Spot Check requirements on different areas within the business will give any owner a full overview of how efficiently and effectively the business is functioning. Spending 1 - 2 hours a week or even 15 minutes a day can make a significant impression on you as to how well the business is going.
3) Support and Train your TEAM. Ensuring that everyone is committed and on the same page allows for the entire team to work together making the business very efficient and effective. Having Team Members that are disruptive or non-cooperative will slow down the systems that are in place and can also create a culture that is poorly focused, negative or even toxic. You may have systemised your business operations, however now we need to train the team to FOLLOW the System.
Investing time and energy in your people is a great way to bring them all onboard with the business goals and objectives.
Creating an environment that brings out the best in people, respects and rewards great efforts and contributions will be the best investment in the businesses future and bring about a workplace that fosters loyalty and commitment from within
Having good systems can keep people on track, especially when there is clarity around what is required of them, and how they can work productively to meet the job requirements or their position responsibilities.
Self Satisfaction for each person within the business comes from knowing that they are doing a good job and having clear parameters to work from is essential. Your team will know exactly what is expected from them to meet your work requirements, they will know clearly when and how they have failed, and where and why they have succeeded, these will form the Scorecard of their Key Performance Indicators.
A good part of systemising the Team Performance is celebrating success and guiding them through challenges, for each member. If you are still searching for the Perfect Team to grow your business, then now is a great time to jump in and get the "Grow Your Peak Performance Team". Click Here to request your FREE Guide.
The business has to make a profit for each job as well as overall. As a rule of thumb, it is ideal to aim for at least 35% margin for Gross Profit and 10% margin for Net Profit. That means for the business owner, 10% after all expenses are paid but before Tax (NPBT= Net Profit Before Tax) is a good place to be, and it will be worthwhile to put in efforts in growing the business. The more sales = more profit (in Theory)
There is a fine line between what is value and what is worth.
To find out if the business is profitable enough, often business owners wait and just look in the bank account at the end of the month. How do we know which jobs are profitable and which are not?
How does a business set it's pricing to be the right amount to charge.
1) Undertake a Mystery Shop on your competitors. It is helpful to know the industry standard or a comparable price on your product or service. Research either online, or make an anonymous call to some of your opposition to find out what they would charge for a Service Call or a particular item with specifications to match your core line product. Don't feel ashamed or scared, doing your Due Diligence or Market Research is critical to knowing where your business sits, and what sort of demand that may be out there for your product or service.
2) Work out how much of each sale is Money In YOUR Pocket. This can be like working out your Break Even Point or Contribution Margin. There are several ways to do this, and here are a few examples:-
Work out Sales vs Cost of Goods to find the Gross Profit
Find the Net Profit per product x Total Volume
Multiply Staff Wages (unit of time) x 3 to estimate Sales Target / Charge Out Rate
3) Once the profit per product / service has been comfortably resolved, the third step is to Increase DEMAND for your product or service. Driving sales and finding new customers to grow the business is an ongoing requirement for any business. While some businesses find customers easier than others, there can be a lot of trial and error when it comes to spending money on advertising only to find out no one is responding, or the sales have still declined.
Where do your potential customers go to shop? What do they look like? What are they thinking? Who do they talk to? How can we capture their attention? How can we entice them into loving our product or service?
Knowing who your ideal customer is helps greatly in making sure the marketing material is geared towards their needs and wants, likes and desires. Have a detailed profile written about who IS your "Ideal Customer". Follow the samples of marketing outlined in our next Business Development Session to build a great network of strong loyal customer relationships that will bring repeat business, quality referrals, and be happy to promote your business to everyone they meet.
Businesses that can leverage off their product or service through a scalable and expandable method of delivery, can reproduce the same product or service through multiple streams at the same time.
For example, a product line in one shop can be easily distributed to 100 shops providing the supply has enough volume to send out or scale upwards. Alternatively, having a Virtual Store online for distribution as well as Physical Store Front, can expand your reach to potential customers, far beyond your local neighbourhood, city, State or Country.
Think "Multiply" in the form of Outlets, Product Lines or Formats, Customer Service Points, or even Digital Reproduction, and you can begin to see the possibilities that can help grow your businesses reach exponentially.
With great Systems in place, and enough Profit to grow, your ability to replicate the business over and over again is the key to removing yourself from the daily grind and reaping the fruits of your hard work.
There are so many businesses that have multiplied on a great scale, just take a look at the McDonalds, Jim's Mowing, Donut King, Real Estate Agencies and many other Franchise systems. There are various styles in expansion and replication such as Agencies, Licensees, Multiple Store or Virtual / Digital Shop front.
To maximise and leverage your business, try to keep the overheads low but distribution volume high. The benefits of Online are the very low overheads with an extensive customer reach that is not restricted by any geographical boundaries. For business, the Internet opens so many doors, and allows us to transact business in many different forms that just were not available 5 or 10 years ago.
As an experienced Business Consultant, I am awed at the rapid changes in technology that has allowed us to evolve to a global integrative workforce. With the competitive Virtual Assistant space, bringing highly skilled staff to the boardroom table, at very low cost. Utilising these online platforms, essentially allows a business to farm out tasks / jobs to overseas, for a fraction of the labour costs, that traditionally would skyrocket expenses, and shrivel the Profits of even the most savvy businessperson.
There are many ways to increase the scalability of your business, and in our Guide to "Multiplying Your Business" module, we explore the many ways businesses can Maximise, Monetise and Systemise their existing business.