You’ve no doubt hit some business challenges if you’ve been operating for a few years or more. Some challenges give you grief and stress, while others can cost thousands.
The more years you’ve owned a business the more challenges you’ve probably experienced too.
Your business can strongly effect your state of mind, and also your whole family and personal life. Owning a small to medium size business is definitely the most challenging role you can take on in life, so wouldn’t it be great if it could just become a whole lot easier?
The truth is, it can! It can definitely become easier. It can become less stressful, less risky, more fulfilling and even very exciting!
The excitement comes from applying a strategy and seeing a very rapid improved result in days or weeks.
I believe business success is about making measurable progress, feeling like you’re getting somewhere, that things are improving and a better quality of life is starting to kick in more and more, especially as you hit the mid-forties and fifties in life.
When our businesses aren’t making progress, despite working long hours years, that’s when we may ask the question – “Is this as good as my life as a business owner gets?”
While speaking to thousands of business owners in public seminars for over 18 years and mentoring business owners, there were 4 major challenges that kept coming up.
What was very interesting is that these same 4 challenges didn’t correspond to a specific industry, they came up for service business owners, manufacturing, retail and whole business owners, no matter if their business was at $700,000 revenue or $7,000,000.
You may relate to these same 4 challenges, if you’ve owned a business for 3 or more years.
The Big 4 Business Challenges relate to…
1. Cash reserves
2. Employees (finding good ones, retaining them, working reliably without supervision)
3. Lack of time (to work on the business)
4. Growing your business – (knowing what strategies to use and executing them)
The good news is that there are permanent solutions to all 4 of the challenges and it doesn’t take 5 years to learn these solutions, nor even 12 months. It also doesn’t cost tens of thousands to learn the solutions either.
There aren’t any instant fixes for these challenges, however you can definitely see very measurable improvements in all 4 in 3 to 8 months. That’s not long considering how long you’ve been in business and how many more years you also intend to be.
What Are the Solutions to the Big 4 Challenges?
The solutions were slowly identified over many years and it became very obvious over time that business owners benefited from learning about 7 topics that methodically conquered each one of the challenges.
The 7 topics of business ‘mastery’ to conquer the challenges are…
1. Building Your Vision
2. Team building and recruitment
3. Measuring and KPIs
4. Business growth planning
5. Systems for profit growth
6. Selling and marketing
7. Management – to leverage and grow
These 7 topics probably don’t all appear necessary but as months go by and these 7 topics are learned and certain strategies related to them are implemented, the 4 business challenges soon start to fade away. In hindsight it will become obvious that all 7 are required because “hindsight is 20/20 vision.”
Let’s now look at WHAT each of these are about in a little more detail and importantly WHY each of these 7 are required in a business success formula.
1. Building Your Vision
This is probably one of the most overlooked or ignored ingredients of success, yet its the most important of all.
Napoleon Hill, the famous author of Think and Grow Rich certainly found that to be the case and he begins his book with a chapter on vision/dream building.
Clarifying WHY you are in business and WHAT you are aiming to achieve in 2 and 5 years is super important because clarity leads to confidence.
Confidence of your destiny is a trait of all leaders who inspire their team to achieve the vision they describe.
For you in your business its very important to share your vision with your employees, which leads to topic or step 2…
2. Team Building and Recruitment
All success in life and business is a team effort. No one ever achieved anything great without people preparing them, teaching them or supporting them and the ability of a leader to build a team greatly dictates the leader’s likelihood of success.
The best ‘strategy’ to turn employees into a team is to hold a “team meeting” once every week with every employee.
Your team need to talk about their role and how to improve it and what they need help with. That’s stage one.
By speaking about their own role will they feel “recognised”, “appreciated”, “respected” and “valued” and these are all especially important for your team to be involved in changes necessary to improve your business. The more your team feel you care about them, the more they will care about your customers, your equipment and you. Caring is a trait of effective leadership that makes the team want to do more and achieve more individually.
Clients have reported some amazing results just from running weekly team meetings. Some have seen over $3,000/month in net profit increase due to one idea an apprentice shared in a team meeting. A mechanic reported a 50% productivity boost in the first week after holding his first team meeting, and a 50% increase in output for the same wage cost is a BIG net profit (and cash flow) increase.
With team meetings running weekly, within a few weeks its very important to introduce “scores” to your team, which leads to the next step…
3. Measuring the KPIs
If every single business decision you made was with 100% certainty, would that make a big difference to your business in the coming months and years?
Measuring various activities of the business identifies numbers to base future decisions on and the more numbers the more confidence with decisions.
Essential numbers for management, to measure and constantly monitor every week (for service businesses) include…
- The number of leads/quotes generated each week
- The number of sales acceptances for the week, and the total dollar value
- The conversion rates on all quotes/meetings
- Where all new leads came from by way of lead source
- The total productive income for the week (partly finished jobs and finished jobs)
- The wage cost for the week
- The gross margin for the week – productive income minus wages divided into productive income
- Cash banked for the week
- Number of debtor days
The reason why these numbers are very beneficial to measure are because these numbers can and should be shared with all team members in the weekly meetings.
In sport you “keep score” and these KPIs are the “score” of your employees work, so that’s why they need to see them.
Confidence in your decision comes from trusting evidence to base your decisions on, and what can you trust more than numbers?
Sharing the gross margin on all jobs for the week and individual jobs that each employee worked on, creates very strong accountability because you can’t argue with a number!
You’ll feel far less stressed and pressure by measuring it and discussing it every week too.
4. Business Growth Planning
This topic is about identifying the best strategies to increase profit margins and to increase income.
The number one best strategy to increase net profit margins is – raising your prices.
There are numerous ways to do so – without a risk of lowering your profits – because if you had no risk, wouldn’t you raise your prices?
- By 5% to 10% immediately on all services
- By 5% to 10% on some services now and other slowly over time
- When you’re the busiest (so you reduce the risk as when you’re busy people don’t like to wait)
- In combination with other strategies to overload your business with too many sales to handle
Which one of these looks the most attractive to you?
The key to keep in mind is, it doesn’t matter if you lose some sales after a price rise. What matters is your net profit after the price rise.
In our Business Growth Calculator tool, you can see the exact figures relating to a price rise, and how much income drop you can accept, based on a percentage price rise. The allowable income drop and net profit increase figures surprise nearly all business owners when they see the facts supplied in this tool.
Business growth planning is about focusing on 7 specific “growth driver KPIs”. Not all may be available to your own business, so its a matter of working with whichever ones are.
All it takes is 5 to 12 well executed strategies over 6 to 12 months to DOUBLE the net profit of your business, and the Business Growth Calculator can show you the figures and proof of this claim.
It’s not uncommon for clients to see $120,000 to $598,000 more in net profit (which is double to more than quadruple in some cases) in 4 to 8 months during the Academy of Business Mastery, despite them thinking it wasn’t possible when they started the course.
When it comes to growing your business, it’s important not to just focus on one TYPE of strategy – such as lead generation.
Consider conversion rate strategies because this figure has the potential to increase your sales income by 20% to 367% because in 1 month because that’s what’s been achieved with previous clients dozens of times.
Conversion rate increases are one of the fastest ways to increase profits there is and there are literally dozens of strategies to increase conversion rates if you own a service, retail or manufacturing business that sells to new clients.
With a business growth plan with your top 5 to 12 strategies identified to increase income, net profit margins (and cash in the bank), it’s time for…
5. Systems for Profit Growth
Systems are extremely beneficial for every business. They provide the structure (along with team meetings and KPIs) to grow your business fast.
The best way to make systems is with videos, to screen capture your monitor (where relevant) using Camtasia or Screenflow (for Mac’s).
Using this software (or smart phone for recording) you can create a 20 minute training system in about 25 minutes (with a bit of practice). A video is far more popular and effective at training an employee on tasks too.
By training employees with systems – as soon as you hire them – you get to see what their attitude is like in days, not in months. Poor attitude employees don’t do what you ask, are half-hearted in their work, don’t care about quality or being reliable and can cost thousands or tens of thousands with mistakes, lost clients and rework.
An excellent recruitment system, with a good attitude attracting ad, qualification questions, personality profiling tool (like DISC Profiles) and final selection criteria is a profit increasing system. Our own clients LOVE the system that is included in our Academy of Business Mastery.
There are 9 types of systems in total to create and essential ones include job descriptions and an Org Chart to visually display all employees’ position and authority. And with systems in place you’re ready for rapid business growth – such as doubling your revenue in 1 to 3 months, with…
6. Sales and Marketing Strategies
This is one area it’s surprising how little business owners invest in for their own education.
Why spend thousands on a new website, with no education on marketing or what the (15) essential ingredients of a well built website need to have?
A basic $500 education on marketing can save you thousands in wasted money on a new website, on ‘trying’ advertising platforms that will be a complete waste of money and generally double or triple the responses (leads) from any or all of your spending.
An education on selling techniques, from answering the phone to building rapport with people face to face can and has doubled and even tripled the sales income of countless business clients over two decades – from just one day of training. It’s a very worthwhile area to invest in training on.
Marketing is the same. Its something that is paid for by businesses, but rarely invested in for educational purposes.
For example, do you know what Google Search Console is?
This tool is rarely mentioned by website developers, SEO experts, or any other marketing service providers – and business owners are seriously missing out on learning powerful ways to increase leads and sales by using it.
It’s a free tool that reveals some incredible insights into exactly how well your website is performing. It can be used to identify facts before and after a test, to see how well a tiny change of your website performed, such as the Meta-Title on your homepage. A small change that takes only seconds can make a very significant difference/improvement to the traffic to your site.
There are 3 to 10 excellent, cost effective or free lead generation strategies available to every business. One of the best is “strategic alliances” tapping into “host beneficiaries”. This very little known strategy is one used by Profit Transformations to generate over $1,000,000 in sales in the past 8 years alone, and the cost for it has been a grand total of $350.
This strategy was originally learned by paying for a marketing education with Jay Abraham, way back in 1992. The ROI on that education has been spectacular.
Training isn’t expensive, ignorance is.
The final phase of growing a business, to conquer the major challenge with time completely, is…
7. Management to Leverage and Grow
If you’re happy with where your business is right now, you don’t want it grow any more, and the amount of holidays you take, and how much your pay yourself are all great then fantastic! Don’t worry about working on your business.
If you’re not happy with where it’s at, then you have to back that thought with action. Don’t “try” to find time, make a decision to MAKE time to work on your business, every single week.
How many hours? 4 is a great number to aim for. It will seem impossible to begin with, but you can do it if you make it a priority to improve your business.
Every super successful business owner who has the choice to work or not worked ON their business and made time to work on it.
Which days and which times will you work on your business? Decide on that, then lock it into your calendar, just as you would to visit a client who was going to spend $50,000 with your business.
Working on your business is worth far more than $50,000. It’s worth more like $100,000 or $500,000 a year in net profit increase, because that’s the figure our clients often see as an improvement due to working on their business to implement our strategies and systems.
Success in business really is a choice, a choice with what you settle for with your VISION.
By implementing strategies on each of the 7 topics above, you can definitely conquer the “4 big challenges” of business.
Success is a choice that turns into actions and results. The question is what is your choice of your future life as a business owner in 1 year from now?
The opportunity is knocking.