Tag: business owner

8 reasons your business is not growing, and it has nothing to do with sales, revenue, or profit

8 reasons your business is not growing, and it has nothing to do with sales, revenue, or profit

There are 30.2 million small businesses in the US, accounting for 99.9% of all businesses in the country. Even though they account for 99% of all business;

  • They employee less than half of the American workforce
  • The average annual business revenue is $46,978 
  • 86.3% of small business owners make less than $100,000 a year in income

It begs the question; what is holding back your small businesses from reaching its full potential and becoming multi-million dollar businesses. This series will discuss 8 reasons why your business may not be growing and the action you can take to fix it. Today we will discuss numbers one and two.

  1. Cash Flow
  2. Dependent Model 
  3. Supporting Relationships (Trust) 
  4. Waste/inefficiency
  5. Leverage 
  6. Lack of curiosity 
  7. Vision with a plan 
  8. A mirror 

Cash Flow

Cash flow is considered by many to number one business killer. There is a saying cash is king when it comes to your business; there is no more accurate statement. For those that don’t know this term:

 

The term cash flow refers to the net amount of cash and cash equivalents being transferred in and out of a company. Cash received represents inflows, while money spent represents outflows. A company’s ability to create value for shareholders is fundamentally determined by its ability to generate positive cash flows or, more specifically, to maximize long-term free cash flow (FCF). FCF is the cash generated by a company from its normal business operations after subtracting any money spent on capital expenditures (CapEx). (definition provided by Investopedia)

 

So how do companies get into cash flow trouble? 

  • Accounts receivable; you have provided service but have yet to receive the cash. Again, this usually comes down to your payment terms and your ability to collect whenever possible try to get full payment before or at least at the time of completion. 
  • Paying Bill First; we all hate owing people, but many businesses do not take advantage of the same payment terms. For example, if someone offers you net 30, 60 payment terms, take advantage of them and wait until the last opportunity to complete payment without accruing penalty. Also, consider renegotiating for a more favorable term.

There are many other ways to develop cash flow problems, but these are two of the biggest. Please take the time to review your cash flow statement & balance sheet see how your cash flow looks. Then, consider setting goals to improve your cash flow as a tool to increase the value of your company.

 

Dependent Model

Now that you have begun to conquer cash flow, the next step will be to make an independent business model. But, of course, you’re probably asking yourself what the hell does that means?

It means creating a business model that does not rely on you as the owner to push the buttons, pull the levers, provide the basic service. It is the philosophy of shifting from working in the business to working on the business. 

There are several reasons why owners struggle to make this transition; we will discuss a few today but remember there are many more, and it is up to create time to do the work and discover your cause and correct it. Today we will discuss the sphere of control.

This is a big one for most owners. At some point, you will get to the place where you can’t be everywhere at once and can’t interface with every client. This can be very tough because this usually means you need to hire middle management. It requires a different set of skills than the ones you have hired before but usually comes with a dip in profit. So what can you do about it?

The first step is to get organized and answer these two questions:

 

What do I need them to do?

Where is the information they need to get the job done stored?

 

Simply put, to create a stable sphere of control, you need to have a documented process with clear expectations, responsibilities, and most importantly, the information to be successful. The standard term for this is SOP’s (Standard Operating Procedures).

Creating your companies SOP’s or engaging these new hires in creating the first version can significantly reduce the mistakes, miscommunication, and headaches that occur.

I hope you have begun to see your opportunities to improve your business. As always, our fractional COO’s are here to help with these and all of your other operational challenges. Thanks for reading, and remember the best time change was yesterday, so you better change today. 

Decoding Word-Of-Mouth Messages

Decoding Word-Of-Mouth Messages

Title Photo

Today’s lesson will talk about how word of mouth messages are delivered and how you can influence those messages.

There is a simple hierarchy of how to make WOM most effective

  1. Be an expert talking to an expert
  2. Get that expert talking to ICA (Ideal Client Avatar)
  3. Then get the ICA to talk with other ICA’s

 

When experts talk about your products or service, you will usually receive an amazing rush of sales and new customers, so obviously, this is one of the best things that can happen. However, you can also help facilitate this by offering free products to experts to review.

Expert opinion can also bring about new ideas that help to fuel new products, services, and operating systems within your company. If you take the time to change or develop the opinions of even a small group of experts, you will have the opportunity to help your market explode.

There is a standard word-of-mouth delivery system that, in most cases, takes a few years. But, you can speed this up into only a few weeks. The traditional approach is:

  • First impressions from an expert
  • Organized trial of your products or services
  • Pooling peer experiences

 

It’s important to know exactly who is advocating for your products and service. Take the time to find out who they are and reward them. While you may already have a customer service system for filing complaints, do you have one for compiling praise? Most likely not. If you take the time to show these people appreciation, they will help take your products and services to the top. 

Some of the ways you can show them appreciation are:

 

  • Invite them to a customer appreciation dinner
  • Offer to videotape their testimonials
  • Ask to interview them for feedback to improve with
  • Offer them a premier customer membership
  • Ask them to join a referral incentive program

 

There are lots of things you can offer your biggest fans to help spread the word about your products and services. 

Conventional media has been around forever, and while it can still be effective, it’s lost a little of its luster over the last few years. There are a few reasons for this:

  • Expensive and doesn’t necessarily return results
  • Boring, lacking something fresh and new
  • Too short of a time slot to offer enough information

 

While these are all true, there are ways you can make conventional media work for you. For the information to be effective, it needs to be presented in the right sequence, come from the right sources, be relevant to the target customer, be credible, and be delivered at the right time in the medium. 

We’re going to switch gears a little and talk about the two phases of the product adoption cycle. Traditional media is great for taking you through the information stage, where you can offer the information you need to your potential customers. Still, it’s not so great for measuring the results of those efforts. 

Without these results, you can’t fine-tune your marketing and, therefore, can easily miss the boat and lose potential customers and waste a whole lot of money. Once a consumer has the information they need, they’ll go through a verification process as they analyze whether or not the purchase was a good one. They generally get their information through:

  • Direct experience with the product
  • Interaction with peers using the same product
  • Experts’ experience
  • Scientific journals and other resources
  • Independent reviews and opinions

 

You can accelerate this process by:

 

  • Providing your own demos and free trials
  • Offer them indirect experience through the experience of others
  • Offer a good, true story that can be passed around 

Once you have the ability and can work through these concepts, you will be able to target your customers much better. If you need help with any of this along the way, try our FREE test drive to gain access to our experienced business coaches.

5 Killer Mistakes – Part 1

5 Killer Mistakes – Part 1

5 big mistakes that will kill a deal are:

  1. Not meeting the client’s expectations
  2. Mishandling a client crisis
  3. Taking on more than you can handle
  4. Putting all your eggs in one basket
  5. Up cash creek without a paddle

Any one or a combination of these can not only kill the partnership but can take down your company as well. We’re going to take a bit of time to talk about each of these; in this lesson, we’ll cover the first two.

Not Meeting Client’s Expectations

You must give your clients exactly what you promised during the negotiation portion of your relationship. If an event does happen where there is no way to meet the client’s expectations, not only do you have to find a way to fix the situation, but you also have to find out where it all went wrong. 

A couple of things could have contributed to this problem:

  1. Bad salesmanship. This could mean the salesperson was trying too hard to seal the deal and didn’t listen to the client’s needs.
  2. Lack of communication. This breakdown occurs between the salesperson and your operations department.

To avoid these mistakes, you need to put a clear plan of action into place that all of your sales staff needs to follow:

  • Think before you speak.
  • Give yourself a break.
  • Perfect your process.
  • Pre-format over-deliverables.
  • Stay hands-on throughout the entire process.
  • Define success.

 

Mishandling a Client Crisis

Crises will happen, but how you respond and fix them will define your company and interaction with your clients. You need to react quickly and effectively. This will help you gain even more trust and confidence from your client.

Some simple tips can help you deal with any client crisis:

  • Take responsibility and apologize, no matter who is at fault.
  • Act swiftly and effectively.
  • Step in and take control of the situation.
  • Never point fingers or place blame.
  • Stay in constant communication with your client.
  • Stay calm throughout the situation.
  • Keep your eye on the ball.

Now that you know the top two mistakes you can make to kill a big fish deal, you’ll know better how to avoid making these mistakes in the first place and learn how to put a plan of action into place in case of a crisis.

If you need help with any of this, don’t wait, email me at doogie@ideasactionsuccess.com

Next time we’ll talk about the 3rd and 4th killer mistakes you can make in working with big fish clients.

One Fish two, Fish, I can’t stop thinking about the Big Fish.

One Fish two, Fish, I can’t stop thinking about the Big Fish.

Title picture

In the last post, we started our series on catching big clients, or “fish,” that will sustain your business over the long run. Today we’re going to take that a step further by talking about understanding and thinking like a big fish company and how that can help you plan your approach and find success.

Before you can start landing big clients, you have to make sure your entire team is on board with your approach and vision. There are six keys to finding big client success. They are:

Six Key’s: Big Fish Mindset

  1. First Impression: Never give them a reason to doubt your abilities. Plan your interaction and be prepared to listen, learn, and act to solve their problems. Make it about them and not you; be patient. 
  2. First Priority: Your fish must always feel like they are your priority. Return calls and emails promptly and find solutions to their problems or questions as quickly as possible. Over-communicate on the process; let them know your thinking of them.
  3. Flexible: You need to be flexible in your negotiations. If they need a particular service or for you to customize a product, say yes for the benefit of the long term. A little hassle now will be a big payoff later.
  4. Long-term: This goes along with the last one a bit. As you are approaching and negotiating with big fish, you need to think about the long-term benefits for your business. If you go for a one-time big score, you will lose their interest.
  5. Have Fun: Work should be fun, even when trying to land big clients. Going after the big fish should be the most fun. You are sharing your vision with new people and including them in your future success and likewise. People work better in a fun, happy environment. Your passion will also be contagious and pull the fish into your vision even more.
  6. Put them first: If you take just a little bit of time and offer your clients ways to save money or time by introducing them to potential business partners, this will show you are invested and interested in their business. Strive to find the balance between your business needs and your client’s needs.

Now that you understand the basis of the Big Fish Mindset. You might be asking, great, how do I develop a vision for my entire company? There several tactics to employ, but here are a few of my favorites. 

  • Engage your team in defining who is an ideal “Big Fish Nothing gets a team to share a vision like having them be a part of the process design.”

 

  • Write the vision and goals everywhere. Create signage that reinforced the company vision and goals. Everyone loves suitable bathroom reading materials. A fun poster in the stalls can go a long way. Plus, this is a great way to reinforce company values.

 

  • Training, Training, Training: Constitnantly reinforces the goals and objectives while teaching your staff the skills to achieve them. Get help and provide resources for your team to be successful. May I suggest starting with a lesson on the “Big Fish Mindset.”

 

  • Score Board: create a way to share the progress with your entire company. It is a great way to show each person’s contribution to the whole. Plus, it can be a great way to track and evaluate your process. 

 

  • Strategy eats tactics for breakfast, holds frequent meetings to make sure your strategy is working, and adjust the tactics to achieve your goals.

 

  • Create a communication policy, be very clear with your team about how quickly you expect your staff to get back to customers. In addition, create shared language and terms around communicating to clients and other team members. Defining these parameters will solve a lot of problems down the road. 

 

  • Reward in public, coach in private. As often as you can, praise your team. Find a reason to thank your team and appreciate their work. If they’re not performing, pull them aside and ask a straightforward question. What do you need to be more successful?

Including a big fish mindset in your overall company vision and experience will allow you to achieve more as a business owner and organization than you could ever imagine. It will enable you to start thinking long-term and give you the ability to invest in your people, process, and profits. Include the tactics in your strategy, and your company will begin landing big fish in no time.

If you need help creating the system, process, and developing the strategy big-company mindset, contact us today to work with one of our coaches or check out our resources and tools. 

The best time to start was yesterday, but today will do just fine.