As Albert Einstein famously said, “Insanity is doing the same thing, over and over again, but expecting different results”.
We all know this, right?
So, what do we have to do differently this year?
This slide is animated, click to reveal each item.
We have these four choices:
*Click*
Do nothing.
That was a nice session, yes I know I should probably do some things differently.
But I don’t like change, it seems all too hard.
I’m OK.
*Click*
Retreat.
I go back into my business and try a couple of things.
I don’t have the support of someone to help me, I have a couple of bad days in the business, so I retreat.
*Click*
Take normal amounts of action.
I do a few easier things here and there and I get a few instant results, some quick cashflow improvement, but I haven’t really fundamentally changed my business, so those quick wins evaporate along with the quick cash.
*Click*
Take massive amounts of action.
I want to fundamentally change my business because the business is here to serve me and not the other way around.
So, how does the old saying go?
If you do what you’ve always done, you’ll get what you’ve always got?
Is that really true today?
Invite feedback from the audience.
Someone will probably say that it is true.
Ask the question differently, ‘Do you think you’ll get what you always got, or do you think you’ll get less?’ People will then nod their heads in agreement.
I think we agree that to get a different result in your business, you have to make some changes.
But change is not easy.
Let’s have some fun.
Everyone please stand up.
Sit down if you didn’t make any New Year’s resolutions this year - this is the same as having no plan in your business (having a plan is essential).
Now sit down if you haven’t shared your resolutions with someone else to help hold you accountable to them.
Sit down if you have broken them at all this year.
Be honest.
So, as I expected, not many of you left standing - for those of you who are, congratulations.
What I’m going to say today will resonate very well with you I’m sure.
For those of you who sat down quickly, you really need to hear what I am saying today if you really want to have improved results this year.
The Five A’s of Change:
1.Awareness.
I know if I don’t do this (make the changes in my business that I need to), the business will be impacted and my profit will drop.
2.Acceptance.
I accept that for me to grow my business, I must free up my time and empower my team.
3.Action.
The action I will take is to get my Business Plan in order so I can keep on track this year.
4.Accountability.
I need someone independent to hold me to account or it just won’t happen.
5.Acknowledgement.
I have some bad habits to break - I need to give myself and my team positive reinforcement when the changes are actioned.
Using a nearby city, demonstrate the roadmap concept:
If you want to get to City, which direction do you travel?
Wait for a response, someone in the room will get that this is a trick question.
How can you answer that question unless you know where you are now?
That is your point A.
What does point A in your business look like now?
For example, if your overdraft is $50k now and you want to have $50k in the bank in 12 months then your journey from A to B is to increase cashflow by how much?
That’s right, $100k.
What is it that you want to achieve this year?
Remember your business is there to serve you; not the other way around.
What do you want to have?
Think about your ideal hours of work, holidays, and cashflow.
Now consider how many hours you currently work, how many holidays you’ve had in the last year, and how much profit you are making.
You need to know this before you can develop your roadmap to where you want to be.
Now that you know what you want to have, you need to develop your one page Business Plan.
Your Business Plan needs to cover:
Your core purpose
Your target customers
The numbers you need to achieve to get what you want (more on this soon)
The main projects you need to put in place to achieve what you want - the individual actions you need to take to get each project across the line; who’s doing what, and when
Who is the best person to help you create your Business Plan and make sure you do what you said you’d do as a result of that plan?
They simply MUST be independent and they must hold you accountable to the plan so they’ll come down on you if you don’t achieve your goals as opposed to giving you the ‘there, there dear it’s ok’ line.
That’s soft coaching, and it doesn’t work.
This slide is animated, click to reveal each item of the budget.
When working out your budget, start with the profit you need your business to deliver to you and then work your way up to determine the required sales level.
For example:
*Click* You need a Profit of $150, 000
*Click* You have Overheads of $350,000
*Click* That means your Gross Profit would be $500,000
*Click* And that gives you a GP% of 39%
*Click* Which means you need Sales of $1,282,000
Of course you will need to develop this in more detail.
You then need to break this down into monthly targets.
Our most successful clients do a month by month forecast every year.
Hands up/drop into the chat those of you who do one.
Fantastic.
And how do you feel once that forecast is finished?
The response will usually be that they feel good, relieved, that they are in control of their cashflow.
In time you should be able to do this yourself, but of course we can help you if you want us to teach you how.
This slide is animated, click to reveal the manufacturer's and retailer's KPIs.
Now you know where you’re going and what you want to achieve, it’s time to set up your dashboard.
The dashboard on your car shows you how fast you’re going, how much fuel you have left and the temperature of your engine.
It gives you an indication about whether you’ll make it to your destination.
It’s the same in business.
The things on your business’s dashboard are Key Performance Indicators, or KPIs.
Essentially, they’re measures which tell you if you’re on track to achieving your plan.
Your dashboard should show the top four or five measures which drive most of your business improvement.
Focusing on a small number of KPIs allows you to capture, monitor, report and improve them on a regular basis.
Your most important KPIs will depend on the type of business you have, as well as your goals.
*Click* For example, a manufacturer’s most important KPIs might be:
- Gross profit percentage
- Cost of rework
- Work in progress days
- Debtor days
*Click* A retailer’s KPIs might be:
Sales
Gross profit percentage
Average client spend
Transaction frequency
It’s important you determine which KPIs you should be measuring, set goals for improvement, and establish a dashboard to regularly monitor how you’re progressing.
When you set goals, do you have someone to hold you accountable for what you committed to?
What are the consequences for you if you don’t achieve your goals?
Do you have a soft coach or a hard coach?
Remember The Five A’s of Change?
One of them was accountability.
You simply MUST have someone independent hold you accountable to your actions and there should be consequences for inaction.
Having your spouse hold you accountable generally doesn’t work; independence is key.
Note: This slide is animated.
Click to reveal each of the four actions.
To summarise, if your business is the vehicle that delivers to you what you want in life the top four things you need to do to make sure you get to your destination are:
Set an annual plan.
Set an annual budget.
Set and measure your 4-5 most important KPIs.
Have someone independent hold you accountable to your plan.
Note - this slide is animated, click to reveal each segment of the flywheel.
Before we get started on the 7 ways to grow your business, it’s important for you to understand the marketing flywheel.
This concept shows how to attract, engage and delight customers and demonstrates that you shouldn’t just focus on gaining new customers, but that you should focus on delighting your current customers.
*Click*
First, we have strangers; people who haven’t heard about our business.
We can do some marketing to introduce our business to these strangers, who will then become prospects Click, who have the opportunity to buy.
When those prospects make a purchase, they become customers Click.
And if we treat them right, these customers will become our promoters Click.
The more promoters we have, the more people we have to speak to strangers about our business, so the cycle continues.
*Click*
In order to attract prospects to our business, we need to provide value before we extract value.
Think about what they’ll get from doing business with you and the problems you can solve.
*Click*
To convert prospects into customers, we must engage them by making it as easy as possible for them to buy from us.
Our marketing is what attracts and engages prospects and turns them into customers.
*Click*
Our sales processes should ensure customers continue to be engaged and are followed up with really good service.
*Click*
Delighted customers will share their feedback with strangers, creating more prospects, customers and promoters.
*Click*
The level of service we provide determines how we delight and attract current and future customers.
The aim is to keep the Marketing Flywheel spinning as fast as possible, converting more strangers into prospects, and prospects into customers, and providing such good service that those customers become promoters.
Following this process is essential to growing your business.
The first way to grow your business is to increase your customer retention rate.
It’s much cheaper to make sales to existing customers, in fact statistics show that it’s six times easier and cheaper to make sales to existing customers than it is to new customers.
By delighting our customers, we make them want to return, therefore increasing our customer retention rate.
What do you do to delight your customers?
Follow the FGG Principle to delight your customers - Find out what they want, Go get it and Give it to them!
The second way to grow your business is to generate more leads.
The best way to generate more leads is to delight your customers so they become promoters and provide you with more leads.
You can’t purely rely on your existing customers to do your marketing for you, so you must attract strangers using your marketing strategies and by providing value.
This may be a free download on your website or a free trial or consultation.
Show them the problems you’ll solve if they engage you in a service.
The third way to grow your business is to increase your conversion rate.
Do you measure how successful you are at converting leads, quotes and proposals into sales?
Do you regularly review why you aren’t converting more?
You should be monitoring the conversion rates of all members of your sales team.
If some are performing better than others, find out why.
Are you using the right people in the sales process?
A key to successfully converting sales is to ensure you’re dealing with a decision-maker.
Don’t deal with gate-keepers, get straight to the people who can make things happen.
You should also offer a range of options so that the question becomes ‘which option should I buy?’ rather than ‘should I buy?’.
The fourth way to grow your business is to increase transaction frequency.
As I said earlier, it’s much harder to sell to new customers than it is to sell to existing customers, so it makes sense to encourage those customers to buy from you more often.
You can do this by sending reminders, introducing VIP cards or offering special deals to existing customers.
The fifth way to grow your business is to increase the transaction value.
This doesn’t necessarily mean increasing your prices.
Think about how you could add more value to your customers.
Could you provide them with a range of options?
Is it clear what your business offers?
Don’t assume they already know - tell them!
Follow the ‘would you like fries with that?’ concept.
Adapt this to your business.
Try not to offer a discount unless the customer has purchased an add-on.
The sixth way to grow your business is to reduce your variable costs.
These are the costs which increase as sales increase, such as direct labour, cost of materials and sales commissions.
Implementing better systems to accurately record time and materials used, as well as implementing strategies to reduce rework and wastage will help reduce your variable costs.
The final way to grow your business is to reduce your overheads.
These are your fixed costs like phone, power, rent, office supplies.
How often do you review your overheads?
It should normally be done annually, however if you haven’t already reviewed them as part of your recovery plan, you must do so now.
Go through your annual financial statements or your Xero reports and identify overheads you could potentially reduce.
You may be able to negotiate better terms for your utilities and rent, or reduce the amount of office supplies being used.
While we’re on this subject, let’s talk about accounting fees!
We’re telling you to reduce your costs, so if you think we are a cost, then you should cut us now.
But if you want to work with us as a strategic partner in your business, then you need us now more than ever.
Think of us as an investment rather than a cost.
Our goal is to save you more in tax, or help you grow your business way more than any extra you may pay in accounting fees.
So to summarise...The 7 ways we have covered are....
Now to work through an example to demonstrate the effect of these changes.
Open the Value Gap Calculator to a scenario you have already prepared.
Use the Sample data with Details Sales Drivers toggled on, the sections with: Are your sales predominantly from repeat/ongoing customers?
and Do you know your lead generation and conversion rates?
Both toggled to YES.
Ensure you have practised using it so you are confident demonstrating how different small changes can have a big effect on the example business.
Decide in advance which of the 7 Ways you will tweak and know in advance what the finished result will be.
Keep your changes real and achievable.
If you create an example that looks unachievable or farfetched, clients will recognise this.
Talk from a position of experience if you can - you can use the example below or create one that resonates with your audience and their related industries.
I’m now going to show you what happens in a business when you have a Business Plan and you set some goals around your KPIs (those 4-5 key drivers that will help you improve profit and cashflow).
What I’m actually showing you is the 7 Ways to Grow Your Business, in action.
This case study I’m about to show you is based on an electrical contracting company.
Of course, it all started with a Business Planning session, culminating in their one page Business Plan.
We identified three Key Performance Indicators that we had to improve.
The first driver we worked on was retention rate.
In the Profit tab, increase the retention rate by 10% to 60% in the calculator as you speak.
The easiest way to grow your business is to reduce the number of customers you lose each year.
For this company their Core Values were not established and therefore not a driving force to guide their team.
We set about developing core values and their definitions to act as framework by which everyone operates.
And ensured that the customer base aligned also.
We also put in place a regular client contact schedule by phone along with an emailed survey following each job - to seek their feedback and ensure they continue to be more than satisfied with the service and the customer service surrounding it.
The next driver we worked on increasing the number of new customers.
This can be achieved via two of the 7 ways to Grow - generating more leads and increasing the conversion rate.
A lead is an opportunity to present a proposal to someone.
In the instance of this electrical firm, 'leads' are measured by the number of phone calls/emails received requesting work, properties viewed and quotes prepared.
Increasing marketing activity would increase the number of opportunities to quote.
And then the conversion rate is the number of those proposals or quotes that you've sent that actually get accepted.
In this case, the owner was doing most of the quoting.
We put a system in place, with follow up protocols.
We also split the quoting in two.
The owner took care of the residential building quotes and a senior electrician was allocated the maintenance quotes.
In this instance it was a combination of those factors that improved the number of customers by 12% – let's see what that looks like when applied.
In the Profit tab, increase the number of new customers by 12% to 179 in the calculator.
The next way to grow is to increase transaction frequency.
For an electrician this is less applicable as its normally a specific service required however this would be an opportunity for those in say the hair and beauty industry, hospitality or a service such a physiotherapy.
So the last driver we worked on was average transaction value.
A better pricing system identified a number of service jobs that were being seriously under-priced so by adjusting this, the average transaction value was lifted by 5% to $1,716.
Increase average transaction value by 5%.
The 6th way to grow your business is to reduce the cost of sales/variable costs which increases your gross profit margin.
If it is more relevant to your audience you may choose to adjust this rather than focusing on increased the number of customers.
So, what was the outcome of this effort and change?
Quite considerable.
Point out the improvements in the Impact Summary in cashflow, profit and overall potential business value impact.
How did they get there?
They invested in some support.
They spent a little on us, preparing their Business Plan, and they came on board for accountability coaching.
This investment is more than paying for itself in the returns.
Increase overheads by $7k in the calculator as you speak.
Can you all now see the link between the 7 Ways to Grow Your Business and the impact on your business profit and value?
By the way, we can run through this calculator with you at a planning session.
Ask for questions relating to the VGC
Remember, you have four possible actions you can take after today’s seminar:
Do nothing.
Say ‘well that was interesting but I think I’ll just box on with what I’ve always done.’
Retreat.
Say ‘wow that sounded a bit scary and a bit hard, I think I’ll go and hide back at work now’.
Take normal amounts of action.
Say ‘yes I need to do a plan but I think I’ll do it myself’.
This most likely will lead to either retreating or doing nothing!
Take MASSIVE amounts of action
Say ‘I get it, I know I need help and these guys know my business better than anyone else (they are my trusted advisor) - if planning and coaching is working for them then I simply must do it myself’.
We can all be better at business if we have the support and accountability required to improve.
Update this slide with the price for each service.
Briefly explain what is involved in each of the options and the benefits to the client if you support them in this way.
As I mentioned at the beginning of this session, don’t be a slave to your business - let us help you break the shackles and get best practice happening in your business.
A ½ day Business Planning session will give you:
Absolute clarity about what you want from your business this year - putting you back in control and removing those shackles
Clearly articulated SMART goals for the year and next 90 days to make sure you overcome vulnerabilities and challenges in your business
Prioritised actions to get you what you want
Improved confidence and motivation
Accountability Coaching will give you:
Tight accountability to make sure you stay on track to your plan
The opportunity to keep your plan alive - no hiding it in the bottom drawer!
Ultimately it will allow you to take back the control of your business
1 hour complimentary meeting:
For our clients, this will be a Complimentary Client Review; for those of you who are not yet clients, it will be a Prospective Client Meeting
During this meeting we will:
Identify your business goals
Identify your personal goals
Identify the problems and challenges that are getting in the way of the achievement of your goals
Determine a process to work together to overcome the problems and challenges and achieve those goals
Remember that definition of insanity - it’s really important to do things differently if you really want to make a difference in your business this year!
Ask your attendees if they have any further questions.
These can be submitted via the chat panel and the moderator can ask them on behalf of attendees.
We recommend having ‘dummy’ questions on hand for your moderator to ask in case people are slow to submit their questions.
When no more questions are forthcoming, click through to the next slide.
Before we go I thought I’d share this quote with you … (read quote).
Write them down, give each of them an owner and a completion date.
Remember, if you need our support, we are here for you.
We hope we’ve given you plenty of ideas to ponder and some clear next steps for you and your business.