When was the last time you sat down, took some deep breaths and thought strategically about your business?

bushbreath

The incredible truth is that most business owners do not take any time out to work on their business. Most are way too busy working in the business that they do not STOP regularly to work on the strategy.

“It’s no wonder the statistics for bush business failure are so high”

If this is you the good news is it’s never too late to start working on your business. Try these simple steps to insert “Strategy Time” into your busy schedule.

  1. Go back through your diary and Colour Code the events you have in there. One colour for Administrative type tasks (RED), one colour for revenue generating activities (BLUE) and another colour for when you actually do work on the business (BLACK). Now that you have done this, count up how much time you spent on the business and compare that to admin and revenue type tasks.
  2. Look at all of your non-strategic tasks and objectively and ask yourself if you really need to be doing that task yourself or could you delegate it to someone internally or potentially outsource it.  Some people find it hard to let go but the more ruthless you are at this point the better off you will be. Its better to over delegate than it is to under, but I’ll talk about that in a future blog.
  3. Now set a goal of getting to the amount of time you should be spending on the business, preferably weekly. I like to spend a third of my time working strategically but that might not suit you. Pick a goal and now start planning out the next 4 weeks and add in one third of that  time into each week. eg if you goal is to get to 6 hours per week then add in 2 hours to each week for the next 4 weeks. Add in an additional third into the next 4 weeks after that and in the third month aim for the whole goal.
  4. Once you have reached your target determine if it is enough or if you need more still and then repeat steps 2 & 3.

“A business owner works hard in their business for a wage, an entrepreneur works strategically to build a legacy.”

Which are you?

Advertisements

Probably the most common issue I see with business owners is they take on too much responsibility in the day to day running of their business. Often necessary when you are starting out but should not be plan going forward.

“Nobody does it as well as I can” they all say.

All well and good but what happens when you can’t be there, you’re sick, you want to go on holidays, you get busy…

The true value in a business is if it will run just as well without you.

Here are a few simple steps to help you achieve this.

  1. Break up your business into major areas such as Sales, Finance, Admin etc
  2. Create a process map for each of these sections so that you (or anyone reading it) can follow it.
  3. Now look at each of the sections of your process map and observe and document how you do it now.
  4. Look at your self documentation and objectively determine if there are any improvements that can be achieved.
  5. Now test the document and see if it works (you do it)
  6. Now hand it to someone else and see if it still works, preferably someone who has never done that process before.

Test the process, measure the results, refine and test again and ultimately LET GO.

Once you get the hang of letting go, also known as delegation, you and your business will prosper.

What’s your biggest barrier to letting go?

“WHAT !!” I hear you scream. “Have you gone insane? How is that even possible?”

In this economic climate, all I hear people saying is that we have to get out and sell more.  Does that sound familiar?

“I have one word for you

….LISTEN”                          Listen more than you talk

Spend some time with your existing customer base and instead of telling them about your new offering, start asking questions and listen for a bit. You’ll be amazed at what they tell you.

There are ample opportunities for you to provide your customers with exactly what they are looking for, if only you knew what that was.

Here are a few ways to help this listening process along:

  • One on One:Call them up and arrange a time to buy them a coffee. Make sure you don’t do all the talking, have a few exploratory questions prepared so that the conversation keeps flowing. This is a time consuming option but you are most likely to get the best responses.
  • Survey:Setup a survey and send them to your customers. Don’t make it too long. You can get to a heap of targeted people quickly but expect many not to respond. Think about adding an incentive to reply to up the response rate.
  • Web Polls: Put a poll on your website. Make it highly visible and make sure you have a great question as typically you can only ask one. The is an effective way to get heaps of responses in a short period of time. The audience is not as targeted but statistically you might get the largest number of responses.
  • Email:My least favourite but still an effective way to get some answers. Personalise the email to the recipiant and make sure it is relevant enough that the person is likely to respond. Again, you might not get as good a hit rate but it is fast and inexpensive to do.

Remember, the key here is to STOP SELLING and LISTEN and you might just surprise yourself as to how much more people will buy from you if your products or services meet their needs.

Is your list of to-do’s getting longer and out of control?  

I bet mines bigger than yours

I bet mines bigger than yours

Well you’re not alone. Most of us are getting busier yet we do not seem to be getting through as much as we used to.

Here are 5 quick tips to get you back on track.

  1. Stop doing tasks and start focusing on the result.  You are more likely to achieve the related tasks if you know what the end result will be.
  2. Set a specific time-frame to achieve this result.
  3. Know what tasks you need to do and what task others will be contributing to the result.
  4. Priorities the results to those that will give you the biggest gain. In a business this should almost always be geared to more profit.
  5. Share this philosophy with others around you.

Focus on the results and you might just get that list manageable again.

If you have any tips on managing your time better I’d love to hear them. Please feel free to comment.

The Global Financial crisis has had an impact on every business I read about or encounter, some worse than others. So what should you do in your business to ensure you are around to enjoy the growth that occurs after any downturn?

Don’t Panic: Too many companies have battened down the hatches, stopped spending and are bracing for the worst. You certainly have to be more prudent in these times but if everyone keeps to themselves, the crisis only worsens because money doesn’t change hands and inevitably, someone falls out the bottom.

Review your Outgoings: Take a good look at the money you are spending and make sure you know exactly where your money is going and take this opportunity to trim your costs. There may be savings to be had in every area of your business, even spending which is vital to your business such as your telephony costs. During this period, if you have a little cash left over, if possible try and build up a piggy bank and put some money away to cover the dips. Remember, cash is King.

Put some extra effort into your existing customer base: Make sure you don’t neglect those who are spending money with you. Take the time to make sure you are provided they a good quality product or service and that the customer satisfaction level is higher than average. Last thing you want is for your clients (and their money) to go else ware.

Improve your Processes: Take a good look at how and why you are doing things the way you do. Step through each major process and see if there are any steps you can remove, make more efficient or delegate to a lower cost resource. This will help make your people more effective short and long term and potentially difer or remove the need to add staff when things pick up again. ( = more profit)

Focus on your strengths: Review your strengths and weaknesses as an organisation and use your strengths as a way to differentiate yourself amongst your competitors. Pick something that you are particularly good at and use this as your value proposition to prospective clients. If you can stand out from your competition you are more likely to get noticed ultimately leading to more sales.

If you can spend some time now looking at each of these areas it will not only improve what you are doing today but help immensely when things get busy again.

What other strategies are working for you in these interesting times?

After talking to many of my friends and assoicates that run small businesses two things are clear. All of us want regular payments from customers and all customers pay in different ways and time frames. This means tracking them and finding signs or problems is hard and time consuming.

After years of running businesses here is a summary of how I bring in the payments faster and more regular with some clear actions.

Invoices paid faster and more regular

Invoices paid faster and more regular

Being in business you will generally be dealing with business of roughly the same size. With only 50% of small business around after 5 years and only 30% around after 10 years, (small business trends failure rates of small businesses has more information) its critical to know what is going on before it effects you.

First, you need to list customers by profit and revenue. It will most likely become clear that 70% or 80% of your business comes from 20% of you customers. Why is the percentage always 80-20? If you know drop me a line. This is where you need to focus your time and effort, if you can bring in 80% of the revenue on time or earlier you’ll be doing well.

Action: ask your accountant or bookkeeper to rank your customers by revenue in the last year. Ordered by highest revenue customer first.

Once you know this you need to work out the average payment terms for each customer in the top percentage. What “top percentage” I hear you cry, start with 10% and see how much time this takes then increase it until you get to 70-80% of the revenue or ask your accountant for the top 80%. Your accountanting package will be able to provide this report.

Action: ask your accountant or bookkeeper to draw up the list of average payment terms for the last 12 months and the last 3 months. The payment term is the time from when you delivered the invoice to when the full amount was paid.

As a business you’ll probably know by now, that unless you are a retail or pay immediately service, terms of payments are just a guide and late payment penalties just annoy customers. There is an acceptable payment period that each customer has. This is the report you have just created.
Now four easy steps to get your invoices paid more regular and faster:-

  • Communicate, communicate to the top 20% regularly. Deliberately written twice as its such a key point. Monitor the top 20% of customers and their payment terms.When a customer reaches 60-70% of their payment term, for example: if company ABC normally pays within 30 days when they get to 20 days phone them. “Hi Jane, I’m just checking you received my invoice and are still ok to pay and have no questions about it.”

    Then follow the conversation with, “when do you think you’ll likely to get to pay it?” or “have you included it in the next payment run, and when would that be?”.  This is where you will hear any complaints or delays to payments, the first red flag.

    Ring again when the customer is 110% overdue so in this case 33 days. “I just noticed your invoice is still outstanding, was there a problem or did you just miss it?”

    Continue this line of nice polite reminders every few days, until its clear you have highlighted a potential risk of no payment or better yet been paid.

  • Send them statements regularly. This is a list of the invoices they have outstanding and how long. Your bookkeeper can prepare this from your accounting system then all you need to do is email it. This will help the disorganised customers people.
  • Create a watch list. List the companies that have regularly paid over the terms.Ring every single person on this list and find out why they normally pay out side the terms. This should be a polite conversation, “for my understanding of your payment process…..”.

    This could be that they only pay invoices on the last Friday of the month and you always send the invoices on the first Monday or they are forgetful / disorganised. Either way it will highlight hopefully if they are having troubles paying or another reason that you can quickly adjust. For example invoicing 1 particular customer on the last Monday instead of the first Monday of the month.

  • Ask for part payment, or move to a “milestone billing” model. A milestone billing model allows you to bill smaller amounts more regularly,for example a website designer may bill 3 times for 1 project, 1) the design phase and prototyping, 2) full website running and live, 3) SOE, Search engine optimisation adjustments and fine-tuning.

    You do need to apply common sense splitting a $100 invoice may be a pain rather than a benefit. To implement this, on your next proposal or contract simply state on the invoice schedule.

And just because I’m on a roll, an extra one,  a 5th way to get your customers to pay invoices faster and more regular.

  • Offer discounts on early payments. I have added reluctantly, however I don’t like this as a method as it eats into your profit margin. It might be good if you absolutely need cash quickly.

That’s it, four easy ways and two actions. Please write in the comments below any other ideas you have or progress you have made.

The Silver Bullet you have been looking for.

The Silver Bullet you have been looking for.

Have you been searching for a silver bullet that will kick start your business and make you a million dollars?

You are not alone. People spend years looking, try a few, maybe make a few bucks, maybe loose a few and then go looking again. Does it really exist??

There are thousands of examples of people out there who have found that million dollar idea so what did they do different to you or I?

In my view there are 4 major factors, one or more of which seem to be in play for every example I have come across.

  1. Timing: right time right place
  2. Unique Idea: Unique, interesting and popular.
  3. Execution: Methodical, calculated and consistent execution.
  4. Funds: enough capital to keep going even if its initially a loss.

For most of us, the thing we can most control of these four is the execution. Building processes to run your business, breaking the process into sections, measuring each one and them improving on the process.

For example: Instead of just going out there and trying to sell your product or service with no real methodology, create yourself a sales process. Break it into a number of small steps (not just 1 or 2, maybe 10 to 14 steps) set guidelines and expectations around each one of these steps and start to measure them. After a little while you will know if each step works or needs refining.

Test, measure, refine, test, measure, refine (never stop this cycle, it can always be better)

Do this in the major areas of your business and you WILL see results. It may not be the silver bullet you were looking for but I bet it will make a significant difference to your results.

What do you see as the major influencing factors for the Million Dollar ideas you have seen out there?