In business, one of the most important factors is having a plan. If you go on holidays or try to build a house, you wouldn’t do that without a plan. Why then do we leave our income up to fate?
I would say, more than 70% of business owners I talk to don’t have a plan for their business and its direction. Let alone how much profit they make or need to make from their business each year.
They operate in survival mode and it isn’t until it gets to a desperate situation that I see them in my office; usually with credit cards maxed out or they are at the stage of emotional turmoil.
Business does not have to be that hard! Business is about being smart and knowing what is and isn’t working. Here are a few key things you need to be successful in business.
- Know your numbers and what drives your business. Which products or services makes profit, which products do you have as loss leaders, how much do you need to sell every week or month to pay the bills? What does it look like to achieve your ideal income?
- Who is your target market and how do you market your business to them? What works and what does not? What is it that lets people know your brand and what actually sends customers to your door? I could have my business in every magazine, on the back of every bus and on every radio station. However, I don’t because I measure what does and doesn’t work for my business. Don’t follow everyone else. If you are not measuring statistics for your business, your target market and your product you will not know what is or isn’t working.
- How do you convert your customers to sales? I see many small businesses with no sales process. It doesn’t matter how good your marketing is….if you are not making sales you are not getting income into your business. Make sure there is a conversion strategy in your process. Many businesses come to me with a list of potential clients but there is no process around how to convert them to becoming customers.
- Do you have the right people on the bus? Don’t hire your best friend or a friend of a friend unless they have the skills that you need and the right attitude. Hire skills that compliment your skills. That is one of the keys to our business. For those that know Renee and I (Melanie), our skills are not the same but we compliment each other. It makes for the perfect pair as where one is weak the other is strong. To do this though you have to be prepared to admit where you are weak so you can hire the correct people. Give your staff key performance indicators (KPI’s) and job descriptions. My experience is that it is genuinely in our human nature to do a good job. Often though, staff need direction to know what is a good job and what they can do to get there. Don’t assume they know. That one difficult conversation could be all is needed.
- Leave your ego at the door. I heard recently that most businesses fail due to the owner! If you are not managing your business, who is? Are they managing it as you would? In my career as an accountant looking at many businesses, the businesses run by the owner of the business with a vested interest generally out-performed those businesses operated by the staff with no leadership or direction. You don’t have to do all the doing; you just need to provide leadership and guidance.
- Systems, systems, systems. Look at the success of McDonalds with their focus and success with systems. Through systems, you are able to delegate and ensure that services are delivered the same way every time and efficiently every time. If the system is not working, you change the system. It will also protect you if a staff member leaves and in many cases add value if you were to sell the business.
- What is your exit plan? None of us are invincible. If your plan is to one day sell the business, the strategy you would undertake is different to if you wanted to close the business down. If this is your family’s main income source, what happens if you are injured and can’t work or if you die? Can the business go on and still provide the same income? Will your business partners want to be in business with your family members?
By focusing on these key areas of your business, you are more likely to be successful and have a business that you enjoy and gives you the financial rewards that you deserve.