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So here’s one of those great questions to stop ask yourself just before you spend time or money on something:
By asking yourself these three questions each time you’re about to spend time or money on something in your business, you can greatly increase your profitability and the acceleration of growth. All too often I find people doing things that just aren’t going to make any measurable difference!
What we’re really looking at here is the difference between costs and investments. A cost is something on which you spend time or money with little or no chance of getting anything useful back in return. An investment is when you use your limited resources of time or available cash with the aim of getting back more than you put in. Spending time and money is how many business owners manage to work really hard and make no money. And the difference between a slow or fast growth business depends upon how well they choose their investments. If you invest £1000 in an advert that return £1,100 of profit it’s probably going to take a very long time to grow the business. So you might want to add a supplemental question “is this the best way I can invest my time and money?” because there are always options if you look (see my earlier blog about having the best ideas). Sometimes you have to invest defensively, hence the second question was about whether you need to invest some time or money to keep what you’ve got.
A prime example is spending on existing customers. Too many businesses take their loyal customers for granted, enjoying regular orders and assuming that if they just keep delivering, they’ll keep getting the business. But I’d suggest that every now and again you need to look after those customers and, if you truly value them, you’ll want to demonstrate it by doing something for them above and beyond what’s expected. In this situation you might not see an increase in sales from your investment (though often you will), but if you don’t make the investment... you’ll regret it when they stop buying. It often amazes me when I see businesses spending 100% of their budget on gaining new customers, and 0% on retaining the ones they already have. But that’s a topic for another day.
Finally, the third question I recommend asking is about you values - doing what’s right. When I suggest to business owners that they should write their business values they’re sometimes unsure what to include. One test I ask them to apply is “If voluntarily upholding one of your values cost you money, would you still do it?”. For example, if you state that honesty is one of your values, then if a supplier accidentally over-delivered to you (you order 5 items, they deliver 6, but the delivery note and invoice show 5) – would you tell them? If you wouldn’t - don’t fool yourself into thinking that honesty is one of your core values. A core value is something that matters more than money. So you get the idea, sometimes you might choose to spend your time or money even though it’s not going to give you a financial return. If you’ve asked yourself those three questions and can’t give a firm “yes”, you just recognised one of those opportunities that you should say “no” to – even if you’re under pressure to go ahead, even if you’ve always done this before, even if it seems interesting. To save yourself even more time you can teach these questions – or your version of them – to your team.
Over the years when I worked in larger companies and had what seemed like an endless queue of people at my door, offering me inventive ways to waste time and money, I would avoid giving them an answer. Instead they’d get the three questions and they’d need to think about the answers. After a while I’d train staff to ask themselves the questions and only come to me if they firmly believed “yes” was the answer. In which case I’d aim to go with their decision, and state it clearly that we were going with THEIR decision – encouraging them to take responsibility. If it did turn out well, I’d make a point of saying “well done on that decision” in one way or another. If it didn’t go well... you might think I’d criticise them. Actually it would mean I’d made a bad decision in allowing them to proceed, so I’d take responsibility but seek to understand and help them understand what went wrong. Once you’re clear on your own process for making decision – whether it’s using the three questions presented here or your own versions – you can teach it to your team and gradually they’ll be making the same decisions that you would. Isn’t that what you ultimately want?
By: Rob Pickering
Whether in personal or business life we rely on those around us to help achieve what we want, so it’s important to make it clear. Ask yourself if those around you actually know what you want? And when you’ve said “yes, of course” or “well it’s obvious” test your assumption by asking those people to tell you exactly what they think you want. There is of course an assumption here that YOU know what you want!
Whether in personal or business life we rely on those around us to help achieve what we want, so it’s important to make it clear. Ask yourself if those around you actually know what you want? And when you’ve said “yes, of course” or “well it’s obvious” test your assumption by asking those people to tell you exactly what they think you want.
There is of course an assumption here that YOU know what you want! If you don’t employ anyone directly, think people like your web designer, accountant, or other paid advisors instead for the following. The key to success, theirs and yours, is knowing exactly what would represent success, in clear measurable terms.
If you employ someone to do telemarketing, how many calls do you expect them to make in an hour or a day, and what results would you consider to be poor, acceptable, good or excellent? If you employ a cleaner what do you expect to be done and to what measurable standards on a daily, weekly and monthly basis? If you employ a salesperson, how much revenue or profit do you expect them to achieve, what balance between different types of products or services should they sell, and what mix between existing and new customers?
Most people get a positive feeling from achieving or exceeding goals. But without clear goals it can feel like a never ending chore. The motivation goes, teamwork erodes and job satisfaction plummets.
Imagine sending out two football teams on the pitch but with no goal posts. They could run around the pitch and pass the ball and tackle their opponents to a high or low standard but it doesn’t really make much difference. You need to be able to keep score - we all need to know how we’re doing, measurably. No score = no satisfaction. Make sure that you’re being clear with people about what you want in clear, measurable terms. Then give them positive feedback. If you believe that achieving a good standard of work is what you pay someone for and therefore it’s not worthy of comment, I can pretty much guarantee that you’ll soon have a poor level of performance as a result! Earning the wage is not enough.
As the leader of manager in business or life, your role is to keep people motivated toward the goal. You’d be amazed how well people respond to being told “well done” and “thank you” even if they’re doing what you’re paying them to do. But you can only do this if you’ve set the measurable goals in the first place. Once you’ve got measurable goals in place on a short-term basis, and you’re recognising their achievement, you’ll find the positive effect starts wearing off after a while. It’s because once we know what we’re doing in the short-term, day to day, month to month, our mind starts to question “but what’s this all for?”. You need to set and measure progress toward long-term goals and it needs to be inspiring to you of course, and also to those helping you achieve it. Again, the fact you’re paying them to show up is not enough.
The more inspired people are by the goal, the more productively they’ll work - and enjoy doing it too! If I were to come in to your business and randomly pick members of your staff “What’s are the main business goals this quarter” and “What are the main business goals for this year?” - would they know? Would they be able to tell me? And would they be able to tell me exactly what they personally need to do as their part in achieving the goals? If you want everyone pulling together in the same direction - you need positive answers to all the above. But as motivating as it is for your team to know your goals and be playing a part in achieving them, they need more.
They need to know their own medium and long-term goals too. In quiet moments they’ll be wondering “Do I still want to be working here next year?”. Do you know what THEY want? Have you asked them, and have you helped them determine a positive path forward with you? Tell them what they would need to do in order to get that next promotion, pay rise, bonus, or even a huge “Well done” from you. When they know exactly what they have to do, there’s a chance they’ll do it. Until then, there’s no chance.
By: Rob Pickering
Many people who believe they own a business are in reality self-employed. Now, if you’re self-employed by choice it’s fine by me. However, make sure you fully realise the risks and negatives:
If you have all the above covered and choose to stay self-employed that’s great! It’s good to be doing exactly what you want to with a secure future.
But if you’re working alone and don’t have all the above covered, you might want to build a business. Our definition of a Business is a profitable commercial enterprise that can work without you.
If you’ve set up a limited company and call yourself a Business Owner, just consider whether you really own a business or you’re actually self-employed with a business name. The vast majority of ‘businesses’ consist of one person and don’t meet our definition, don’t have all the above points covered, and the owner runs in circles trying to do everything. Many tell me confidently that they don’t ever want employees. The reason they don’t want employees is because either they can’t afford them yet, or they don’t want the responsibility. Isn’t that interesting? If you employed someone and, as a result, the business made less additional profit than was being spent on the employee... it would be a bad choice of employee! Let me be clear - the reason you employ staff is so that the business makes more money.
Say you spend £25,000 per year on a new employee, you’re going to want to see the business generating £50,000 or more additional profit per year as a result. This might seem obvious, but I continually speak to people who haven’t got their head around this and think that an employee is a cost they can’t afford. In terms of employees being an extra responsibility or hassle, I understand, but it’s often a feeling or a fear that comes out of a bad experience or misunderstanding. Someone recently commented “I’m not sure I could generate enough extra business to cover the cost of one employee, let alone a team!”. My question in response was “would they be working for you, or would you be working for them?”. I admit there are plenty of bad employees around who will sit and do nothing unless you’re hassling them. But if that describes someone who works for you - why did you employ them and why do you continue to? Deal with it, you get what you tolerate. When you think of employing someone, consider whether there is potentially enough business out there that your company can gain to more than cover their cost?
Next, consider who’s going to get that extra business. Do you need to prioritise employing a salesperson or marketing person to get more business before or at the same time as an employee that will generate more work or handle more admin? Then, when you’re interviewing and certainly when you recruit someone, make certain that among other goals they know exactly what they need to be generating to keep their job and maybe to achieve a pay rise or promotion. If you have work that isn't yet or never will require a full-time employee, consider the alternatives.
You could employ someone part-time, or you could use a Virtual Assistant (VA). Using a good VA can be an excellent solution because you can contract as little as an hour at a time as needed, and get the specific skills you need at the time. What takes you three hours might take a good VA only an hour, so the saving potential is excellent. The necessary skills to manage employees are relatively easily learnt - there are hundreds or probably thousands of books on the subject and endless training courses. But first you need to start with a clear understanding and belief that you employ people to generate more profit for the company and that you don’t do the work for them. If someone has to work late... it’s the staff. If someone needs to get more money in to pay the bills... the staff need to do it. Your job is to set the direction, employ the team, make sure they know what they have to achieve, then make sure they’re constantly motivated and achieving the goals.
By: Rob Pickering
Hands up everyone who’s involved in selling? Yes, it’s that old trick question. You and every person in a business are involved in selling. Anyone who isn’t clear about their role in selling is possibly sabotaging sales! Think about when you deal with someone in an organisation. When you visit an office and speak to the receptionist, a poor attitude will make you less likely to do business. A good attitude and an awareness of what they can do to make you WANT to do business makes a difference.
A delivery driver with a bad customer attitude is creating a risk that the client will go elsewhere. Conversely a delivery driver that’s aware of his sales role will look for opportunities and report back to their organisation when they see one. I could continue with every role in a business. Everyone can help generate sales and retain customers longer - or they can do the opposite. Everyone is in a sales role whether they realise it or not. So I have three questions for you to ask yourself:
A good response at this point is “Great ideas, I’ll get right on to it. What do you recommend we do?”. The responses I usually get fall into the categories of Blame, Excuses and Denial, including:
Don’t forget the sales team Far too many organisations employ sales people and assume that they’ll automatically get better and do their jobs to the maximum by simply doing it every day. Last week I was told “John’s my best salesman, he’s got 12 years’ experience”. I asked whether that was 12 useful years of experience, or simply one day’s experience repeated 2880 times over 12 years? The point is, without time to reflect and learn a repeated experience does not necessarily lead to better performance. On the contrary, it often leads to sloppiness, boredom and poor results. Even high-performing sales people need motivation and training. Investing in sales training is one of the best returns on investment available. How much will you invest in sales training this year?
By: Rob Pickering
It’s important to add value for your customers, but they have to know about it to appreciate it. What value are you adding, and if I surveyed your customers would they know about it and what value would they put on it? This might connect with your USP (Unique Selling Proposition) or your Guarantee. It’s all about standing out from your competitors and ensuring that your customers value what you provide so much that they continue to buy from you rather than anyone else.
Many businesses understand and add value. Some do it naturally and some go out of their way to do it deliberately. But either way, it’s pointless unless customers actually understand. You need to ensure customers recognise the value you add. Let me give you a little example. Most of you will be familiar with buying a printer for your computer at home or in the office. You go online or visit your favourite retailer, make a choice and buy. Either way, you get the printer on your desk, unpack the parts, plug it in and off you go. And if all else fails you read the manual.
How much did you appreciate the value that the retailer added in this situation? Let me give you another version. You unpack the box, go to plug the printer in and there’s no cable. You search, but there isn’t one. So you now have to contact the supplier and discover that the data cable is not included! Now you have the hassle, cost and delay while you get the cable. In the situation where the cable was included you probably wouldn’t notice because it just seems obvious. And the problem is... the retailer had the cost of the data cable - or the loss of the extra sale - and yet they gained nothing because you didn’t even appreciate the value they were adding! Good customer service dictates that the retailer should check that you already have the cable you need, or to offer to sell it to you, so that you’re not surprised and inconvenienced. But for you to value their service, they need to point this out to you. Ideally I would have the retailer ask the question and highlight “You wouldn’t want to get all the way home and find you couldn’t use the printer and have to come all the way back again!”. Now you appreciate them adding value - either the value of their service in meeting your true needs or the value of a free cable. You can only value something if you know about it. And here a cable that costs the retailer very little becomes worth ten times more to you by preventing hassle and delay. Chances are you’ll buy from that supplier again, and maybe recommend them. In your business what value are you adding and do your customers know? And how much hard cash value do they think it’s worth?
What else could you do so that they appreciate and value what you do?
Focus on these questions and see what you can do to make improvements. If you have staff, why not set aside 30 minutes to brainstorm ideas? And survey or ask your best customers - “When you buy from us, what is it you value most about dealing with us?”. Whatever that is... make sure you’re telling new prospects and even telling existing customers to help them appreciate it. If it’s as simple as “Our customers just like dealing with us...” then at least say that on your website, in your advertising, in your email. Don’t just compete on price, add value - and be sure that you’re doing it in ways that your customers recognise and value what you do.
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Running a business well and securely requires that you know your numbers! You have to be able to plan for cashflow and avoid the unexpected. It’s also about forecasting the numbers so that you can plan for growth.
Anyone who’s had the experience of working as a senior manager in a company of 50+ staff will probably have had exposure to “Management Accounts” and to good financial practices. It doesn’t necessarily mean you know how to operate them, but at least you have an idea of what’s involved. But a huge number of business owners lack this experience and accounts are a bit of a mystery. Whatever the past experience, the majority of business owners are not on top of their business financially. Many think it’s just them and everyone else must have a clear understanding. It’s a cause of embarrassment and sometimes fear - the accounts and indeed accountants are to be avoided in case of difficult questions that could expose a lack of knowledge. If this is describing you... it’s time to grasp the nettle and know your numbers.
80% of businesses cease trading within the first five years... and it’s often down to poor financial management. But it’s not as mysterious or difficult as you think, and once you’ve mastered it, your business can perform much better. Let’s get one thing clear first: the purpose of annual accounts. The Government requires every business to submit annual accounts reporting on profit. Guess why? It’s so that the Government can collect taxes. Your annual accounts have little to do with telling the business owners what they need to know to run the business... it’s all about paying tax! So if you look at your annual accounts and wonder “but what does it really mean to the business?” you’re barking up the wrong tree. What every business owner needs is generally known as “management accounts”. This is a collection of information that helps management understand what has been happening in the business and what it means going forward so that good decisions can be made now. There’s no point waiting until your accountant tells you months after the end of the financial year that you made a profit or a loss! There’s no absolute definition of what should be in management accounts. It’s whatever is key to your particular business. But typically it’s going to be broken down under headings, for example, with fixed costs, variable costs, cost of sale, income (revenue) and the resulting Gross Profit. This should enable you to see on at least a monthly basis an estimate of your profit, and allowing you to see clearly how you achieved it. Your external accountant might be able to provide you with monthly management accounts, but it’s additional to doing your annual accounts for tax purposes and they will want to charge you extra. I would put the task of manual accounts with your bookkeeper, whether that’s internal or external to your business.
How to create management accounts If this is new to you, or in need of improvement, approach your trusted adviser. Call me or email me if you’re in doubt. But basically I recommend by starting with a spreadsheet broken down into the sections as described above as row headings. Each column should be a month, starting with the first month of your financial year and continuing for a full year, with totals for the year. Near the bottom will be a calculation of Gross Profit - your sales revenue minus your cost of sales. And right at the bottom will be an estimate of the net profit - all the revenue less all of the costs. What you want to see is how much profit you’re making each month. You should start with estimates in every section as a forecast of what you expect, then replace with actual numbers as you know them each month to see the reality. (Or keep forecast and actual so that you can see the difference!). I always aim to have completed management accounts for a month by about 5-10 days into the following month. So after each month is complete you can see whether you achieved what you set out to, and if not, where it was different. This is the key point - by knowing this you make management decisions. Without it, you’re running blind - potentially off a cliff. Know your numbers so that your business is safe and so that you can make the right decisions to maximise the profit.
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Do you have a 5-year business plan? I know from experience of asking that question that only a tiny proportion of small businesses (under 25 staff) have anything resembling a one year plan, let alone a 5-year plan. Or even a clear goal such as the size of the business, number of employees, types of product or service, or anything else.
Without clear goals and a written plan, it’s really difficult for you, your staff, your suppliers and other stakeholders to understand what needs doing and to help you progress in the right way. Part of it is about vision and leadership; it’s human nature that we follow natural leaders - when we see someone being inspiring, we get behind them and push them further ahead. But try inspiring people with vague goals - or no goals at all - and you’ll find it difficult. Your company vision is also part of the ‘identity’ - how people understand and perceive the company - your brand. It’s hard for staff and customers to get excited about a business that has no clear identity. Think about any successful business and I bet you can describe what they do and what they’re all about. And if it’s something you believe in, you’ll probably recommend them to other people.
Think about your own business and consider how clear you goals are and what the company stands for. If I randomly picked on any of your staff, would they be able to tell me clearly the top 5 company goals? If I randomly picked some of your customers and asked them what your company stands for - would they be able to describe it the way you want to be described? Would they sound interested, satisfied, impressed, even excited about it? Think also about your ‘extended team’ - you know, all those people that you’re paying but are not actually employees - your accountant, bank manager, web designer... How would they describe your company, but also do they know what your goals are? If they do, are they involved in helping you get to where you want to? When you get your extended team to understand your goals and fully behind you to get there, you’ll get there a lot faster.
Here are a few suggestions for Action to take:
Having a clear vision for the company becomes a blueprint against which key decisions can be made. For each decision you should ask yourself “does this take me toward the goals, away from the goals, or make no difference?”. It’s surprising how many companies have no clear vision and struggle to make decisions. Getting the vision clear and communicated creates clarity and promotes fast growth.
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A great way to drive ever better performance is to know and monitor your personal best performance as one or more measures. For example you might focus on a number of sales in a month, a number of calls in a day, the number of products manufactured, number of orders shipped, and so on.
When we focus on something that we want to improve, and measure it, then monitor it regularly, we can improve it. Break it down into the steps that create the achievement and look at what you can do to make small improvements here and there. I remember that years ago in a start-up software company I not only did programming, I packed boxes too! If I had a stack of boxes to pack I would naturally start to time how long it took to make and pack each one and try to make each one more quickly than the previous one. I’d get into production line ways of thinking - what order did I need the components laid out in, which way round did each need to be placed... anything to shave a second here and there. In sales I would be testing and measuring - what were the words I could say to get through to the person I needed to speak to? What was the best way to describe what I was offering to get the best conversion rate in the shortest time? How many calls... and how many successful calls... could I make per hour?
So if you look at your own performance in business, what measure would represent your most important personal best performance? If you find you think of one and shy away from it because it feels too difficult - that’s probably the one to choose!
Create a measure so that you can express your Personal Best (PB) as a number, or two or three numbers if that’s what it takes. Write that number large and put it on the wall in front of you, or on a sticky note on the corner of your screen, or wherever else you’re going to see it frequently. Underneath it put a target of what you want to achieve as your new PB, and a deadline such as by the end of the day, week or month. Many people need someone to hold them accountable. We find it too easy to set goals and then sweep them under the carpet when we don’t feel like working on them. In which case a coach would help - that’s one reason why athletes and successful business leaders work with a coach, to keep them focused on the goals they’ve chosen. Your coach could be a business partner, friend or partner. Tell them your PB, your goal, and your own deadline. If they say anything along the lines of “no way you’ll do that!” go find yourself a new coach, you need someone who tells you that you can do it and will be supportive. Someone to ask difficult questions and push you into action when you don’t feel like it and to cheer from the sidelines when you do.
If you have a team of people working for you, get them focusing on their PBs. Make it all about their personal achievement, not about doing it for you. Allow them to pick a PB that interests and inspires them. Now imagine how much better the whole company results will be when everyone is beating their own personal best performance.
Who do you like being around? Who makes you smile when they walk in the room? Who says things that make you stop and think? Who is it that makes your life richer and more enjoyable when they’re around? And who - when asked this question - will name you? When you walk into a room do people smile and feel pleased that you’re there? Think carefully about this, you might take actions that change your life and those around you for the better.
The good news is that anyone can become this kind of person. It starts with a recognition of who we are being, and that it’s a choice, or more accurately a continual series of choices. Next comes a thought of who we want to be, then a decision that we will be that person. Someone who inspires and brightens the lives of others. Consider the alternative for a moment: Who do you know that is constantly complaining, finding what’s wrong in things and people, living a life based on blame, excuses and denial? How much do you enjoy being around them? Probably not much. It’s hard when it’s someone we’re likely to be around through work or social life. Sometimes we’re not even conscious of it and the negative effect on our own motivation. We all have a choice about who we are BEING.
We can choose to smile, to make kind remarks, to demonstrate small kindnesses, to be generous of spirit. We can choose to take ownership of our own lives, to be responsible for our actions and to be accountable to ourselves. Whether at work or at home, we have an impact on those around us, and we can choose what impact we want to have. Know yourself and the impact you have, and choose to be the inspiration that those around you will appreciate. It’s about pausing long enough before acting to decide what you want to achieve, and then choosing your appropriate response.
It was Victor Frankl who said that “Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”.
This is what sets us apart from animals. An animal will respond instantly to a stimulus - poke an animal with a stick and it will probably immediately turn and attack. As human beings we often follow the same stimulus and immediate response, but alternatively we can use that “space” as Frankl called it, to pause, even for a fraction of a second and choose whatever response will achieve our purpose. When you are aware of this space and start using it, with practice it becomes easier and more natural by the day. Each time you get out of bed, or walk into a room, or respond in a conversation - use that ‘space’ to choose the effect that you want to have on people, and act accordingly. Even in a heated argument you can learn to create the space and bring about a result you want. Be the person you want to be, the inspiration that those around you will appreciate.
Going back 20 years before LinkedIn, Facebook, Twitter and when even websites were relatively new, most marketing involved printing something. Oh, and colour laser printers were still a dream so you did have to print thousands of anything to make it cost effective. Marketing on a zero budget was pretty difficult if not impossible.
We’ve come a long way and now if you’re not using social media marketing then you should be planning to. Let’s get something clear - I’m a total believer in digital marketing. If you don’t believe it, talk to me and I’ll tell you why and how. But while some people are yet to really get into digital methods, other companies have, in my opinion, gone much too far! Whatever happened to printed brochures? Ask for a brochure these days and you’re liable to be told “it’s all on the website, you don’t need a brochure”. Last weekend I was considering a sizeable purchase and was given this line by the salesman. When I said that actually I’d rather prefer a brochure that pulls all the information together in one place to review and to easily show to someone else, he agreed and said that their marketing people won’t let them have expensive brochures any more.
There’s a time and a place. If you don’t have at least one or two really nice printed brochures, I’d like you to ask yourself if your leads might be more plentiful or your sales conversion rate higher if you did have one? A good place to start is one that shows the range of products and services that you offer. You’d be amazed at how few of your customers and prospects really know the range that you offer, or the options they could choose. And while they might spend 30 seconds flicking through your brochure, they won’t all proactively log on to your website and browse around it. You’ll get some of the leads and sales, but not all. Wouldn’t you rather have them all? Or would you rather your competitor gets those? Picture the situation selling to public sector or larger business clients. There’s often more than one person involved in a purchase.
Imagine they’re considering three options, each from a different supplier and one of those is you. The engineer who desperately needs the product goes to his manager for approval because it’s above his authority level. He explains the need to his manager who understands and asks about the options. The engineer puts on the desk two nice brochures from your competitors and a scrappy black and white laser printer bunch of stapled sheets for yours. Obviously you didn’t give him that - your information is the most complete and most details and is on your website. But your prospect realised he’d better print something to present it to his manager. The good news is that you save thousands per year printing brochures! The bad news is you lose tens of thousands in sales per year. Another key point about good printed material is that it tends to hang around and be seen. If someone looks at your website then closes it, they’re quite likely to forget about it. If you give them or mail them a good brochure, they tend to leave it on their desk for minutes, hours or days.
During that time it’s continually catching their eye and reminding them to take action. And if they think someone else in their company should see it, they’re likely to pass it along. Emails are also good for being passed on, but you know what it’s a like, you close it and aim to come back to it but forget. In most situations a printed brochure is more likely to generate results than an email or phone call - and remember you can use them all: email, phone, send brochure, call/visit. An experienced printing company these days will have a digital press. They’ll be able to print as few as one single copy of a very nice full colour brochure.
A run of 100 can be economical, but remember it’s all about return on investment: as long as the design and print costs less than you make in increased sales, it’s worth doing. And often, when the sales are higher value, a single extra sale can justify a whole lot of print! But the quality has to be good. Whether we like it or not, we do tend to perceive quality in relation to the brochures and packaging, so invest appropriately. Make sure your marketing plan includes digital print along with the rest of your digital marketing in the right balance. If you don’t know what’s possible, call your local digital print specialist and find out. Maximise your leads and conversion rate.
Sales pipeline management is about keeping track of your prospects all the way from interest to sale, and managing them efficiently from one step to the next. Work out how much each lead costs you, on average, to generate. For example, take your entire spend on marketing for the year (staff/time and spend on advertising, website, etc) and divide it by 12 to get your monthly marketing spend. Now look at how many leads you get per month (if you don’t know... estimate). Now divide your monthly average spend by the average number of monthly leads. This is how much you paid to buy each lead. Often this shocks people the first time they do it, and they insist it can’t be right. It is. Now that you know how much those leads are worth, you’ll want to make sure that you’re looking after every one of them.
I often find that half the leads a company gets are just frittered away. They’re left ignored for long enough for them to go cold and then put in a pile or left in a list and never seen again. Even more common and more of a delusion is the situation where a lead is followed-up, but then no next action defined. Consequently they fall into a black hole. If you take away only one point from this, it should be:
It’s easy to think at the time of speaking to a prospect that you’ll give them a call tomorrow or next week or next month, and honestly believe it. But believe me when I say again - unless you set an actual date for the next action - ideally in your diary with a reminder - it won’t happen. Most leads are squandered this way. The key to all of this, especially in a business with more than one person handling leads, is to operate a formal sales pipeline. This will probably need to be in a database of some kind, a CRM (Customer Relationship Management) system, or a spreadsheet at the very least. But even though you’re likely to need a CRM system, I think that it’s good to start with a simple spreadsheet. This allows you to create column headings, ie the information you will keep about each lead, in a very flexible way. Once you’ve got that working for a few months, then move it into a CRM system. These start as cheap as free and then the sky’s the limit. Some of the information you need to keep is obvious:
Then come the pieces of information specific to the current buying interest and the current situation:
Then you need to know some information about the progress with this lead right now:
And finally the most important points:
Now I usually recommend that the first column in your pipeline spreadsheet, or the main sorting order in your CRM system, is the NEXT ACTION DATE. Basically you don’t need to do anything until this date. The whole point of operating a pipeline is to look at it and know which leads you need to follow-up on today, and do it. If you create and operate a sales pipeline including the above information, you’ll maximise your sales, and perhaps just as importantly, your prospects will be looked after and feel that you care and are efficient. Hopefully at least some of you have noticed a very important piece of information missing from the above? OK, I was testing you. What do you think is missing? You need to track the source of every lead, eg where they heard about you. You need this vital information so that you know which marketing is working and what to do more of and what to stop. What else would you need to record in the sales pipeline for your business?
If I say “Sales script” it probably creates a negative emotion for most people. That’s because most of us have experienced a really poor cold-caller following a script to the letter and not listening to our responses: Caller: “Good morning, how are you today?” Customer: “Terrible, my dog died” Caller: “Excellent! Now the reason I’m calling today is....” Set aside any sales script related negativity, because you wouldn’t read from a script and use it badly - would you! However, scripts are vital to maximise sales and achieve consistency.
Imagine you have three sales people selling exactly the same product to a list of prospects. One of them continually achieves twice the level of sales that the other two do, but why? It’s easy to say “he’s a better salesperson” and you’d probably be right. But it would be foolish to simply accept that, rather than examining the detailed reasons. If you were able to get the other two sales people doing exactly what the best one does... the total results would be significantly better! Are you doing that? Sit and watch the best salesperson. How do they initiate the greeting? What words do they use, what’s their attitude, what process are they naturally following? For starters they’re probably speaking confidently, enthusiastically, smiling, and being friendly. They’re probably asking questions and listening to the answers rather than just talking. How do they get the prospect interested, how do they judge the speed of progress, and importantly - they probably ask for the order. How do they end the call and what do they organise as the next step if the prospect was interested?
These are just examples of what to look at - sales calls are actually very complex processes that “good” sales people do naturally or learn to do naturally. And I’d argue that anyone can learn to do it, if they want to and have the opportunity. Set about observing your sales people - or yourself if it’s just you. Write a bullet point list of all the key steps you follow within a sales call. Especially list the key questions that you’d want to be asked on a call. When completed, consider this your sales script.
Each of your salespeople should be trained on this until they’re able to do it to an agreed standard. It’s no use just telling them or giving them a copy, they need practice to convert the knowledge into skill. In reality you’ll probably find that you need to create a number of different scripts for use in different circumstances. The steps and the questions are likely to be different between calling with a special offer to sell versus a regular account management relationship call, so use an appropriate script. When you introduce a new member of staff into your sales team, these scripts will form a significant part of the training process. Not only will you be able to get a new starter trained faster, they’ll also be more effective and more consistent with the existing team. But allow some scope for each person to modify what they say so that it sounds natural for them. Are you using sales scripts in your sales team?
Businesses of all sizes need to create a sales process. This should be a written series of numbered steps covering initially sales leads all the way through to an eventual sale. The majority of businesses I meet have operated for years with no documented process. Predictably the results are varied and it’s hard to know what is working and what isn’t. It’s also difficult to train new staff because there’s no process to train them on.
Use the following as a guide, but add or remove steps as appropriate for your business. I find that once someone sees an example, they can soon create a version for themselves.
Step 1: Greeting: Use a consistent greeting, eg when answering the phone say “Good morning XYZ Electronics, John speaking, how may I help you?”. Have versions for calling out, visiting clients, using at a trade show, etc. Consistently do it the best way.
Step 2: Permission: It’s rude to suddenly start asking questions, and your prospect will react poorly if you do. So ask permission first, eg “Would it be OK if I ask you a few questions so that I can better serve your need?”.
Step 3: Understand the prospect’s need: What would be your initial three questions to ask every prospect to pre-qualify that they might want your product or service? Then what are the follow-up questions? Enter these directly on your database system or have pre-printed sheets for recording leads.
Step 4: What’s your solution?: Now that you know enough about the customer’s need, you can start talking about the appropriate product or service that you have to offer, referring back to how it meets their needs.
Step 5: Agreement: Check that the prospect agrees that you’ve understood their needs, and that your solution sounds relevant. If you determine the person has no immediate need for your product or service, determine if they EVER might, and if so, ask if you can add them to your newsletter mailing list and note a follow-up date, even if it’s a year or more ahead!
Step 6: Arrange a meeting: If your product is low-cost and simple you might be able to close a sale on an initial call. But in many cases all you’ve done so far is to identify a qualified prospect. We’ll assume it’s a larger sale and you want a meeting. Suggest dates and agree the time and place.
Step 7: Send Confirmation pack: You might use email or post, but send your prospect a confirmation of the time and place agreed for the meeting. What else could you send them to enhance the chances that they will eventually buy? If you don’t have anything to send, create something.
Step 8: Confirm Receipt: Allow appropriate time then call to check they’ve received your confirmation pack and they’re ready for the planned meeting. Show enthusiasm for the forthcoming meeting!
Step 9: Prepare: It’s surprising that people invest a lot of valuable time and money visiting a prospect without actually preparing. What information might you need, what documents, eg a contract to sign.
Step 10: Meet and sell: Once at the meeting, check where they stand. If they’re about ready to buy, do only what’s necessary! But otherwise go back over determining their needs, offering your solutions, and checking agreement, before closing the sale. And obviously I can’t cover the necessary skills here to achieve that! When you implement a sales process in your business you will increase your sales success rate and decrease the time it takes from interest to sale. Train existing staff to follow the process, and use it as part of the induction process for new staff. And if you have no staff at all... do still create and use a sales process. There’s much more to say about all the sales process steps that will increase your sales. Go ahead and ask any questions you have. Or book a meeting with me to review your process - send me an email firstname.lastname@example.org
Sales are often focused on very logical concepts - features, benefits, price, solutions, compatibility, ease of use... and so on. These all matter, but they’re not actually what will make or break the customer’s buying decision. Have you ever experienced a prospect agreeing with you about all the points you’re making, but then they don’t buy? Chances are that it was based on what they were feeling, and you missed it because you were too busy focusing on the logic.
The make or break is based much more on the emotions of the purchaser during the process. In fact I’d say the decisions are often only 20% based on logic and 80% on emotion - it’s that significant. Not only that, the speed of the final decision can also depend upon the strength of the emotion involved. This factor is always there in every sale, but if you’re not aware of it, or ignore it, you’re at a serious disadvantage. Fear is often a key emotion that can either help or hinder a sale. Imagine selling a power backup system, a generator that steps in if the mains supply fails. We can look at the logical points including price, specific features, and so on. You can assess how much it might cost the company in lost business if they were without power for a day?
Chances are the backup will be cheaper than that loss, so logically it can easily make sense. But what it all comes down to is likely to be fear. Yes, fear of losing money, but more than that. Fear of what the customers will think and what they’ll say and how disappointed they’ll be when let down. Fear of what the staff will say - especially if they know the decision maker has specifically chosen not to buy the backup system. If it’s an employee making the decision, they might fear losing their job.
By highlighting the possibilities in terms of emotion and focusing on how the buyer would feel, the chances of a sale are greatly increased. At this point, the logical factors need to be there in support. Effectively the sale is made, unless the logic lets it down. In his book “Questions are the answers” Alan Pease sets out what he refers to as his five solid gold questions that can be used to reach the emotions. He starts with “What is your number one priority?”. That can seem quite logical. Then he asks “Why did you pick that one?”. The rest dig further, and I encourage you to read the book for a greater understanding.
When we’re asked to think about the answer to a question, we cannot help but feel the associated emotion. Ask someone “What would be your greatest fear?” and you force them to think of something they’re afraid of, and experience the feeling of fear. As you’re in a sales situation, be aware of the emotions you’re causing the buyer to experience - they may not be what you’d want! Imagine walking into a car showroom and having a salesman ask “Have you ever purchased a car and then regretted the decision?”. Unless he’s got a brilliant follow-up line, he just made you afraid to buy from him! On the other hand if he asked “What’s the best thing about buying a new car?”, he’s forcing you to tell him what the hot button is for you personally buying a car, and making you feel that positive emotion, and want it! Use the above points together - focus on issues that will have an emotional connection for the buyer, then use questions that will cause them to feel the emotions. Don’t rush the process, the buyer needs time to feel the emotions. By this point you might be thinking “This is horribly manipulative and I’d never want to sell this way!”. Fair enough.
What I’d like you to understand is that it’s not a choice - I guarantee that the prospect is feeling emotions. But either you’re selling with awareness of this or you’re gambling - hoping that the prospect will feel the right way and buy from you. Look to your own sense of what’s right or wrong and do what’s best for your customer. I recommend to anyone that feels uncomfortable with selling that they think about the exchange they’re proposing in the sale. You’re asking the them to swap an amount of money for the product or service you provide. Do you believe that they would be better off having the product or service than they would be holding on to the money? If so... you’re doing them a favour by selling! Surely you need to do whatever you reasonably can to help them see that and to make the purchase? Getting them to recognise how they feel about it is just a way to help them know they should buy. By recognising the importance of 80% emotion and 20% logic, you’ll be able to increase your number of successful sales significantly.
When you look at the sales leads you’re generating, chances are the best leads come from referrals. Yet when I ask business owners what their referral strategy is I’m often met with a blank stare. Let me be clear: A referral strategy does not include “If I wait long enough and stare at the phone, someone will eventually refer a prospect to me”. But what do we mean by 'good quality' leads anyway?
The quality of leads can be measured in three ways:
Leads generated by someone clicking a website and being forced to enter their contact details are typically very low quality ‘cold’ leads. They’re usually a long way from being someone ready to purchase. It’s good to have this kind of activity going on in the background, but generating business today or next month is better achieved with higher quality leads. At the other end of the scale comes referrals from trusted partners. A prospect who’s referred to you is most likely to be genuinely interested and be ready to buy from you the soonest. But are you getting as many referrals as you could? A poor strategy is to wait for someone to spontaneously refer a prospect to you! As the Chinese proverb says: “Man stand long time in field with mouth open, waiting for fried duck to fly in”. In other words... get off your seat and do something to make it happen!
Existing customers should be the first place you should look to for referrals. They know what you do and they know first hand how well you do it and why someone should be your customer. But they’re not consciously thinking about who they know that would be your next good customer. Yes, you actually need to ask them. When did you last ask your best customers for a referral? Typically you find that happy customers would be delighted to refer people to you, they just need prompting - regularly.
Strategic alliances are the next great way to generate high quality referrals. In your industry, what kind of business has the same or similar customer base but doesn’t compete with you? These are people you could initiate a strategic alliance with and introduce each other to your customers. If you do it loosely you’ll probably get results, but if you do it in a planned way you can get regular good referrals (and give them too of course).
Business networking groups are another excellent way to give and to get referrals. Google your local area to find business networking groups and visit one new one each month and you’ll find a few that suit you. There are people in groups I attend who get more than 80% of all their business via referrals from the group! If you’re not in such a group - perhaps you’re only experiencing 20% of the business you could be getting. One point of advice - you’ll get as much as you give.
Suppliers are often overlooked when it comes to sources of good referrals. They probably have people asking them where they should buy, and they’re probably recommending someone - make sure it’s you! Guess what their biggest frustration is? Having been in this position several times I can say confidently that the biggest frustration is knowing that the company I recommend is going to serve the referred prospect in a really professional manner. Assure your supplier that you’ll look after any referrals well. Make it easy for all of your referral partners by giving them more than just your name and phone number. And I don’t mean just a business card... but a pile of those would be a good start. Create something that would work well for a partner to hand to a potential prospect, or better still, an introductory voucher that has some genuine value. Feedback counts - for every referral someone gives you, start by saying thank you, and give them feedback updates so that they know you looked after the person you referred. That way they’ll refer again. Creating a referral strategy that works for your business is an incredibly effective way to generate high quality leads regularly.
Many of the things you need to do that make all the difference are not obvious. If you’d like me to analyse your current strategies and help get you on the right track, call me now and ask for a 2-hour business diagnostic.
The main way that recession holds back businesses is not about banks and lending, it’s about attitude and beliefs. If you think there’s a recession and that there is less business out there - most people batten down the hatches and go into hibernation. But it’s probably the worst thing to do.
Take marketing for example - what happens in a recession? Businesses cut their marketing spend because they feel they should cut their overheads, ready for a reduction in sales that they think is inevitable. But the whole point of marketing is that it’s about investing and expecting a greater return. You invest £1,000 and get £2,000 of additional profit. Then you take as much of that extra profit as you can and reinvest it in marketing to make even more profit. The more frequently you do it, the faster the business grows. If the recession is a reality, the £1,000 investment might now only generate £1,500 of profit. So that means you need to work harder on marketing and do even more!
Cutting marketing makes no sense.
It comes from fear, but rarely from a decision based on facts or calculations. If the marketing investment suddenly generated less profit than the investment - that could justify cutting it, but really it’s just a sign that you got the marketing wrong and need to re-think your strategies. What worked before is not necessarily going to work during a recession mindset. Often in large companies the news of recession initiates a series of actions such as imposing spending limits, reducing budgets, freezing recruitment, and so on. If you did this without a recession what result would you expect? Zero growth at best! And sure enough, growth reduces and everyone concludes what? Good job we cut our costs because look how much our sales dropped due to the recession.
Most of the effect of a recession is psychological. As human beings we are ‘meaning-making machines’. Our brains provide us with an ability to make connections between things we see happening and then we decide what it means. At its best this leads us to fantastic scientific and other discoveries. At its worst we leap to foolish conclusions and make crazy decisions. We tend to look for what we expect, so when we’re told there’s a recession - that becomes the cause for things. In a time when we’re told economic growth is high, we hear that a business has failed and we know it must have been a bad business idea or poorly run. If a business fails during recession - it must have failed because of the recession. When we see sales drop - it must be due to the recession. No! It’s because bad decisions are being made and the right actions are not being taken! In life we there are some things we can control and some things we cannot. Sometimes we might be able to make a small effect, but not enough to make a difference. Time and energy expended on things we cannot significantly affect is wasted. Focus on what you can change. I recently organised an event and invited people to attend. The response was very poor.
Someone I know and respect told me “Don’t worry, it’s not you, it’s the recession; people are attending less events and have less money to spend.”. I hear views like this regularly, and they may or may not have any basis for truth, but what matters is how we react? I decided that recession or not, what CAN I do to make a difference. If I believed what I’d been told, I might have cancelled the event. Instead I looked at what I could do differently and additionally. I changed to different messages and different channels and enlisted support from people around me. The results increased dramatically. If you think we’re in a recession, think about what you need to do differently and take appropriate actions. If you think people aren’t buying as readily - work harder to convince them. If you think the market is more competitive - compete more. If you don’t know how to market or organise finances or achieve sales at the level you need to - get out of your seat and attend seminars and training! Recession is not a time to do less, it’s a time to DO MORE.
What actions are YOU taking to grow your way out of recession?
“Never wish your job were easier, wish you were better” - Jim Rohn I like that quote, but I don’t consider ‘wishing’ to be a viable strategy! You have to work at being better. Gaining knowledge and practicing skills will make you more productive, and that means more profitable. Learning and training (assisted learning) make an enormous difference in a business. In larger well-run corporates, training is recognised as important and staff expect to be provided with regular opportunities to improve their skills. Yet in smaller businesses where staff have to be far more multi-skilled it’s common to find zero training.
Audit your past 12 months - out of 365 days, you had
How many days of informal learning did you do? And how many formal days learning or attending training? When I look into most businesses of under 50 staff the answer for the owner and many of the employees is none! And they’re often surprised when they realise.
If you were not thinking about your own business where it’s easy to get caught up in excuses, but looking at someone else’s business, with 132 days of holidays and 233 working days, what would you say would be a reasonable number of days to spend training? As a percentage, 10% learning how to do the work better and learn new things sounds entirely reasonable, but express it as 23 days and most business owners laugh. Last year I spent 43 days learning and in training. I don’t suggest you do that much, but what would you consider reasonable - 5 days, 10 days? If you were going to spend 10 days on education over the next 12 months, what would be your priorities? Is it marketing? Sales skills? Planning? Recruitment? Appraisals? Finance? I recommend that you create a Personal Development Plan (PDP).
Your staff should all have one too. It would highlight the areas in which someone needs training either to be better at their current role, or prepare to expand or change their role. Once you know the skill gaps, you can work at identifying the relevant training. Often business owners tell me their staff are not very good. I ask about their recruitment methods and they assure me that they’re good at recruiting - they only employ good people. Yet here they are complaining their staff are not achieving the standards they require. So what happened in between? Nothing - and that’s the trouble.
If you employ good people and then just put them to work and expect them to learn on the job, they lack any external input and their opportunity to learn is severely limited. The thing about training is that it’s never urgent. It’s easy to have good intentions and find reasons to defer. But over a period of time it becomes a serious problem that limits the business profitability, slows or stops growth, and leaves people lacking motivation and enjoyment in their work. Here’s an interesting question for business owners. Imagine you are owner and chairman of your business, looking at the return that your Managing Director is delivering from your business. Would you fire yourself and get someone better? Maybe you’d tell yourself to get booked on some training courses and get up to standard.
Training is one of the best ways to invest your time and money. Invest wisely and you’ll get a huge return on that investment. Create a PDP and decide how many days per year you need to dedicate to your improvement and that of your staff. Do it today.
If I tell you I’m good... well I would say that wouldn’t I. But if someone else tells you I’m good... well it’s probably true. There are many ways we can tell prospective customers about our product or service in the hope they’ll choose to buy from us. We can advertise in magazines, newspapers, or online. We can create brochures and websites. We can give out business cards or even meet people face to face. But no matter how well we do any of these things they fall down in one important respect: We probably won’t be believed.
Recommendations or testimonials from other clients of a potential supplier count much more than a glossy advert. So it’s important that you include positive client feedback as part of your marketing. There are many different options for doing this, depending upon your type of business. In most cases, especially if you provide services, getting recommendations on LinkedIn is a great strategy. I always check people and companies on LinkedIn before dealing with them. The LinkedIn system shows the real person that recommendations have come from and the date when they were added, both points ensuring they’re likely to be genuine. So if you don’t have at least a dozen recommendations on your LinkedIn profile - start requesting them. There are several services such as Check-a-trade, Disc Directory, and many others that gather feedback scores from customers, validate them and publish the results.
Or for companies doing e-commerce sales you could use TrustPilot. Again these systems are good because they validate feedback and create averaged scores, but even if you don’t use these, at least include testimonials with real customer names on an area of your website. Even better, include case studies that explain how you helped customers so that other prospects get a better understanding. Waiting to get good feedback is a poor strategy. Make sure that you take steps to gather good customer feedback. Send emailed surveys, request feedback a few days after successful completion of an order or work completion, provide feedback forms, and use LinkedIn’s own system to request recommendations.
Have a plan and be deliberate - perhaps aim to gather and publish one good testimonial per week, and stick to the plan. Regularly publish good client testimonials and you’ll see an increase in enquiries and a higher conversion rate to sales.
Do you have any good examples of strategies to gather customer testimonials?
To achieve the best sales, you need to do appropriate marketing. To do a good cost-effective job marketing, you need to have a plan. I doubt many business owners would argue with these points, yet surprisingly few businesses actually have a marketing plan. Why is that? Like many aspects of running a business, few business owners have ever had the opportunity to learn other than from what they have worked out for themselves. If they’ve never experienced the benefit of creating and using a marketing plan, it’s not going to be an urgent priority. “I didn’t get where I am today by having a marketing plan!”. (Sure, and to get any further you need to have a marketing plan!).
Whole books have been written on this subject so naturally I can only provide a very brief insight, but enough to get you started.
I didn’t say marketing was easy! Most people think marketing is really creative, and some of the ideas can be. But most of all it’s a numbers game and all about planning, calculating, testing & measuring. If you want some help with your marketing plan, feel free to ask questions here or get in touch.
When you set out to do some marketing, make sure you’ve got a clear idea of what you want to achieve: Know your objective and make it measurable. Some examples will make it easier to understand. Marketing methods:
...and then list goes on.
Often what happens is that someone thinks “...better do some marketing, we’ll do an email newsletter”. The resulting newsletter is usually a struggle to write; The focus is on anything that springs to mind - a complete mixed bag of information with no purpose. It usually leaves the recipients thinking “so what?”. The internal measure of success is “we did a newsletter”. But there was no measurable objective.
After a few months there’s no visible increase in leads or sales, and the ill-fated newsletter dies a death. But at least email newsletters are usually a relatively low-cost marketing method. The situation’s worse when the activity is costly, like advertising in a magazine. Here the advert tends to be a similarly lacklustre collection of information. The measure of success? “We did an advert”. Is this marketing? Well, it often passes for marketing, but it will rarely achieve much.
Few business owners have ever had any training in marketing, so it’s entirely understandable that mostly the work is off-track and the results dubious. But with guidance the results and the return on investment can be greatly improved. The starting point is to stand back and examine what needs to be achieved. Only then should you consider the different marketing methods - different ways of communicating - and choose the most appropriate ones for the objective at hand. As an example, an email newsletter can be very good for communicating to existing customers to stay in their minds and keep them returning. But it would be a poor choice if the aim is to gain new customers. Twitter would be a better way to reach a new audience and grow your customer base. Adding the two together would be even better - tweet about your new newsletter and invite new subscribers. Identify the objective, then choose the best methods to achieve it.
I’m going to share with you one of the biggest secrets to success! Actually it’s one of the few things I learnt at school that’s been of significant value in business. You can apply this principle in many areas, but I’ll discuss it here in terms of marketing.
I’m forever having people ask me “What do you think of this idea?”. For example, “I’m planning to send a mailshot to 5000 names on a mailing list - what do you think?”. My rather sarcastic answer is usually “This is by far the best idea you’ve told me in the past five minutes”. The point is - having ideas is easy. Having good ideas is harder. But all I’m interested in is the BEST ideas. How on earth can you know if something is the best idea if you only look at one idea?
If you just take away one thing from reading this, here it is: Always create a minimum of three alternatives, compare the pros and cons, and choose the best one. I can guarantee that whatever you do will be much more successful when you pick the best of three.
Often in a business there is more than one product or service available for sale. As you start planning some marketing, start by determining which product or service you aim to focus on selling. Ideally this is going to be one that represents the best all-round opportunity for the business, for example - good profit margin, low hassle, easy to sell, short sales cycle, available now. Often people dive in, randomly pick a product or service, and start working on marketing it. It could be that the marketing is successful and sales are made, but how much more profit could have been made by working on selling the item that’s twice as profitable? Think strategically. Consider different products and services and think about the pros and cons of focusing on increasing the sales of each one. Not just in the short term, but in the long-term. Which one, if sold in bigger volumes this month, is going to lead to even greater sales if it or of something else later? If you focus on selling more razors, will it automatically lead to selling more razor blades for the coming year? If you sell more printers this month, will it lead to sales of more ink and paper in the coming year? If you offer free mobile phones this month, will it lead to increased airtime sales in the coming year? But again, choose three good alternatives and pick the best of three, not just the first one that springs to mind. At school and college I studied design technology - basically how to identify a problem and design the best solution to it. The method I was taught was as follows:
The third solution was always much better than the first. But you know, once I’d worked on that first one, I was convinced it was a great idea and didn’t want to set it aside and start again! The discipline to create and review three alternatives is critical. Only when you look from different angles do you see the flaws in the first. Once you’ve decided which product or service to focus on marketing, next create three alternatives for how you’re going to market it. Look at the pros and cons of each one, ultimately calculating the ROI (Return On Investment) for each one. Only then should you go with the method that is calculated to be the best one. So next time someone comes to you with an idea and asks “What do you think, is this a good idea?”. Ask the killer question - “What are the alternatives and what makes this the best one?”.
The level of your achievement will be heavily dependent upon the people you surround yourself with. If you hang out with people who are negative about you or your ambitions, the chances of success are minimal. But if you surround yourself with positive, encouraging and supporting people - success is much more likely.
Don’t get me wrong - you still have to put in the hours, learn and improve your knowledge and skills and do the work, but then the possibilities are endless. Go ahead and dream - set yourself goals that are inspiring to you personally. If you’re going to dream, you may as well dream big! And if you’re going to set goals, set big goals! Tell people your goals and focus your time with the people who think your goals are fantastic, who make good suggestions and encourage you to move forward.
Learn to know yourself. Recognise times when you are motivated and when you are not. What creates those different feelings? Create self-awareness so that you know if you start feeling less enthusiastic and take action to get back on track. There are lots of things you can do to generate a positive feeling, here are a few ideas, try some and pick the ones that work for you:
The list could go on. Now think: How many of these things do you regularly and consistently do at present? If the answer is “not many”, are you ready to make a change in your life? Whatever you’ve achieved so far in your life is not an indicator of what you can achieve in the future - the future is entirely down to what you make it, starting today.
What is your time worth per hour? Unless you’re in a business charging per hour, this might seem hard to know or even irrelevant. But even if you do charge an hourly rate, chances are that not all your hours are billable. If you focus on using more of your time to earning a higher rate per hour, your business will be more profitable - or you’ll be able to work less hours - whichever is more important to you. income = hourly rate x billed hours
Most business owners are busy running the business and don’t bill per hour, and don’t consider how much their time is worth per hour. You should! If you like being the person who opens the mail, just be aware that you’re doing a job that should probably pay minimum wage and you’re reducing your profits by doing that. So what kind of things could you do that are most valuable? If you went looking for and found a new top-ten customer, how much will they be worth over the next few years? How many hours of work would that take and how much per hour does that work out to be? You could also look at the value of time recruiting a new member of staff, training staff to be as good (and valuable) as you, working on better marketing, and so on. Most business owners I encounter agree that these are all incredibly high-value activities... but then tell me they don’t have time to do them!
It takes a while to really get the connection - the higher the value of the work that the business owner does, the more profitable the company. I know it can appear difficult to find time for high-value activities that don’t have someone pressuring you to do them. So here’s a good approach I’ve found very successful. Look at what you regularly spend time on each week or month and make a list, for example:
Next to each activity, write what you think would be the hourly rate of pay for someone who could do that work. Now here’s the interesting part: If the hourly rate is less than you can be worth when doing your most valuable work... employ someone to do the lower-paid work. “But I can’t afford to employ someone” I hear you saying. This is the point, and this is what keeps most business owners struggling. If you choose to do work that’s worth minimum wage, that’s the wage you’re choosing for yourself. You have to pay someone else to do the lower value work so that you can do the more valuable work and earn more money for the business. Please, don’t look at all the reasons why this is “not possible”. Instead, focus on just one question: What would we need to do to make this work? It’s surprising how many hours you can gain even without taking on an employee. Modern technology has made it easier to outsource. You can outsource your bookkeeping easily. If you don’t want to lose control, use one of the cloud-based accounting software packages so that you and your bookkeeper continually can see and work with your accounts. There are lots of brilliant Virtual PAs around who can often do things more efficiently than you’re doing them!
Take action. Make a list today, identify one thing that you can outsource and ask your coach or other trusted advisor to recommend someone to give the work to. Don’t do work with a lower hourly rate than you could be doing.
“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
It always astonishes me how business owners will spend money on an advert and never actually know if it’s generating more profit than the advert is costing. I saw a great recruitment advert last year seeking a Marketing Manager. Written by the business owner, the advert read “Job description : For every £1 I give you, you’ll generate at least £2 of profit.”. That was literally the whole job spec! The reason I love it is because that encapsulates the financial purpose of successful marketing - you invest and expect a higher return.
It’s common in marketing and business generally to speak of R.O.I (Return On Investment). If you spend £100 on marketing and it generates £200 of profit from the resulting sales, that’s an ROI ratio of 2:1 or 200%. As long as your ROI is greater than 1:1 you’re on the right track. Do you know the ROI on all your marketing investments? You must! Whenever you start a marketing activity, put in place a procedure to measure the results. Let’s say decide to try a small advert in your local paper and it costs £100. Ensure that you and anyone else answering your phone, checking emails or otherwise serving customers asks the question “Where did you hear about us?”. And at the same time, keep track of how much the customer spends. Assuming your advert resulted in 10 sales of £20 each, you got £200 of sales for your £100 investment. But before you celebrate too quickly, what’s your profit margin?
If it’s 50% you spent £100 to make £100. You wouldn’t want to keep doing that! So next week change the advert - a better headline, better call to action, and place the improved advert. The second week with your improved advert you get 20 sales so you’re winning with £200 profit for £100 spent. Now you can celebrate. You tested an advert, measured the result, tested a possible improvement, measured again, and saw better results. That’s usually how it goes… but not always. If the results had been worse the second week, you’d know that what you tried was a bad idea and the next week try something different. Keep testing and measuring to see what works and keep improving your results. I often see business owners just doing the same old thing, over and over, never knowing if it’s working OR if it’s the best ROI. Use test & measure to try different advert designs, different offers. But also use it to test between different advertising media - different newspapers of course, but also internet advertising, social media, LinkedIn, Google Adwords, and so on.
Stop spending on marketing that isn’t working. Test and Measure all the time and ensure that your marketing investment is delivering the best possible return.
At the end of every day make it a habit to plan tomorrow. Most people don’t plan their time at all and many of those that do, start the day by writing their “to-do” list. It’s actually much better to do it at the end of the day when it’s all still fresh in your mind, so it takes less time to think of what has to be done tomorrow. Ideally keep a list during the day so that tomorrow’s list is mostly done anyway. Do you ever find it hard to ‘switch off’ from thinking about work when you get home in the evenings? It’s very common. We worry about things and think “must remember, must remember” and it turns into a worry! By reserving fifteen minutes at the end of the day to plan tomorrow, you get it all written and off your conscious mind. Those things that otherwise become a nagging worry that you daren’t forget about suddenly become OK - it’s already written down.
Another thing that happens is that your subconscious mind automatically gets to work on the tasks you’ve written down for tomorrow. This may sound a little odd if you’re new to the study of the subconscious! But just give it a go. When you start work the next day, everything just feels a bit easier and ideas spring to mind more readily. There’s a certain motivational feeling that’s created by sitting down at your desk and already knowing what you need to do for the day. Sure, the plan may need to change during the day, we all know that ‘shift happens’ and we need to accommodate. But at least you’re just dealing with changes, the plan as a whole is there. If you manage a team of people, make it standard practice that no one leaves without first writing their plan for tomorrow. Have them leave it on top of the desk so that you, and everyone else, can see that everyone is organised. Don’t believe this is possible? I know offices where it happens, and it works. The staff there consider it entirely normal and don’t have to be forced - they know the advantages and like the culture it creates. Go and create a great culture in your company today.
Have you ever noticed that most recruitment is based upon skills and experience, but that people are fired due to poor attitude and behaviour? Think about really great employees that have worked for you… and then consider whether you’re reflecting on their level of skill, experience, knowledge, even intelligence? Or is it more about their attitude? In most cases you’ll find it’s very much the latter. I would suggest that the things that make a great employee include:
Now consider typical job adverts and interviews. They’re full of “Must have…” requirements for specific skills and “Minimum three years experience of…”. Having observed the process managers go through when writing a job recruitment spec, they sit and think really hard about these skills and amounts of experience and create a shopping list. It’s way too formulaic.
Experience is always a criteria that I find somewhat questionable. By all means take it into account, especially as evidence that someone can actually do a particular job and will stick at it. But just remember that experience means they know exactly how to do things, without even having to think about it… someone else’s ‘right way’. Chances are that you’re going to spend months getting them to un-learn old habits (“We always did it THIS way at me previous company”). And also remember that ten years of experience might in reality be one year that they repeated ten times without ever getting better or learning anything new!
So what’s the alternative? Identify what are the absolute minimum you could accept in terms of knowledge, skills and experience. Yes, there’s usually going to be a minimum or they can’t actually do the job on day one or even day twenty-one. But be honest, the minimum is often not that much unless you’re hiring into truly professional roles.
Focus on good behaviours and attitude. The most important one is an eagerness to learn - if someone is eager to learn and proactive about it, they’re going to progress rapidly. Make sure they can and will follow instructions (or you’ll regret it when they’re working for you!). The way to attitudes is to ask good open-ended questions and then listen to what they say AND what they mean. When prompted with the right questions, will they complain about their old boss, about their co-workers, about how their company didn’t do this or that… When they list hobbies and interests, ask about those “so what was the most recent book you read?”, “When did you last play that sport”, “Your creative writing sounds interesting, where can I look at some examples?”. You’ll soon see a picture of the real person emerge. That’s the person you could have in your organisation - will you be thinking in years to come how lucky you are to have them in your business? Or regretting the day you hired just on skills and experience?
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Why don’t we delegate more? The reasons I often hear are:
…and so on. The good news is that delegation is quite straightforward and ef fective if you understand that it’s all about a process and developing trust. Yes, it takes time, but the time invested will pay you back many times over and you’ll develop a great team too.
Stage 1: Do this task, this way, and show me before you issue it
Stage 2: Here’s the task, tell me your recommendation, do it, show me afterwards
Stage 3: Here’s the objective, work out the best way to do it, tell me when it’s done
Stage 4: When you see an issue, deal with it as you think best, report routinely
At stage 1 you have no confidence that the person you’re going to delegate to understands the task or knows how you’d want it done, so you need to be very prescriptive. You explain the task and say how it should be done, and ask to see the finished result before it’s implemented. If the result at the end of a stage 1 delegation is how you want it, and you’re confident they can do it again, you’re ready to move to stage 2. But until then you’re going to continue being very prescriptive and leaving very little room for error, and you’ll catch any errors before they really matter.
At Stage 2 you’re checking that they will go and do the task the way you want it done. “The task is this… what are the steps you would go through to complete this task?”. If they confidently get it right, they’ve learnt, so demonstrate some trust and let them go and do it and show you after it’s completed. And say that if they feel unsure, come and ask for guidance. But if they keep coming back, tell them you really want them to achieve this without checking and get them to have a go. It’s important to build their confidence.
At stage 3 you hand over an objective (the outcome you want, which might entail several smaller tasks) and ask them to work out how best to achieve it and tell you when it’s done. Again, encourage them initially to seek further guidance if they feel unsure of what you’d want. When they consistently do things the way you want several times, tell them clearly that you’re confident you’re doing things the way you want (well done!) and they’re ready for the final stage.
Stage 4 is where you stand back and watch things happen, stepping in only if the situation changes, or if you see problems occurring. Only step back to stage 3 if you really need to. If you follow the process, you WILL reach stage 4 with most people. Never take back a task once delegated! Unless, that is, you want to forever do all the work for the staff you’re paying! Yes, mistakes will sometimes happen! When they do, it’s probably because you failed to describe the task sufficiently well, or failed to mention something about how you like it done. Or maybe you tried to jump past one or more steps - don’t. Delegation is the key to your business running efficiently. Start working toward Stage 4 today!
I’m often asked for help with time management and it usually starts with “I haven’t got enough time!”. That’s interesting because we all have the same amount, but some people use it better than others. In reality we can’t do everything, and the more we focus on the things that are not done, the more overwhelmed we feel. Ironically that feeling can also reduce the enthusiasm and productivity rate to get things done!
When faced with this problem, stop, make a list of the things you need to get done. Next, apply the 3D rule. Go down the list and decide which of three choices you’re going to apply rapidly - Do it, Delegate it, or Drop it. Write your decision next to each one. If you’re a procrastinator, give yourself two minutes and also apply the rule that any you can’t decide on means the same as Drop it (that’ll scare you into deciding!). Where you’ve chosen to Delegate It, go through and write next to it the name of the person you’re delegating it to. If you find it hard to delegate to people, you probably get caught up in thinking “How will they do this?”, and unless you know the answer, you won’t usually delegate. Well, it’s possible you’re the only person on the planet capable, but often there’s someone else just wishing you’d give them the space to get on with it. But if you still struggle, The Four Stages of Delegation. Do it now… make that 3D list and clear your list of guilt today!
A principle we often discuss with owners is getting your business so well organised that it will work without you. I’m sometimes asked if this is really possible? It is! By creating the necessary systems and processes, accompanied by the staff training and motivation. But how to achieve it is not the topic here… When talking to an ex-business partner and friend of mine about his business working without him, he responded “but I don’t want my business to run without me! I love what I do – why would I stop?” It’s not the first time I’ve been confronted with this response, so I promised to think about it; here are my thoughts…
Some owners feel that their business is tiresome, or even torture! They’d like nothing better than to stop doing it – provided that they kept getting paid. But there are also people out there who really love what they do, and would continue doing it even if they didn’t have to. And maybe now is a good time to say this includes me!
Some people just love the work they do, so why would they want to stop? The point is, although we talk about getting the business to the stage where it will work without you, we’re not saying that’s what everyone should do. If your ideal is to get a little more freedom, that’s OK. But before you set your sights on that, I’d like you to think about the alternative.
Think beyond your company needing you. Imagine your business is running without you, either because you’ve got it organised or because you’ve got a great manager in there? You’d be free to ‘work’ as and when you choose. If your business were carpentry, for example, and you could think of nothing better than making wood-shavings all day, how would it be if you suddenly had the time and resources to make anything that you want to, not just what customers are willing to pay for. Or maybe you like passing on your skills, so imagine if you could now take the time to train an enthusiastic apprentice.
This brings to mind my brief career as an author, being paid to write. I like writing, but let me tell you – when I have to write something the way someone else wants it, to their deadline, and I’m trying to force words onto paper when there’s no inspiration, I absolutely hate writing! Yet here I am now, writing for the pure pleasure. Maybe you feel the same way I do – taking off the pressure can allow us to create our best ‘work’ and to enjoy it more too. Then it doesn’t feel like work. But to get to that point… you really need to have the business at a stage where it CAN run without you. It’s not about stopping work, it’s about freedom.
“Work harder on yourself than you do on your job.”- Jim Rohn INCREASE YOUR CAPABILITY & YOUR VALUE Do you work hard at your job? Most people do. A lot of people work incredibly hard and long hours. However, working hard in a job is being like the little hamster running round in its wheel, working hard but getting nowhere at all by any real measure. Early in my career I was fortunate to have a wise manager ask me “How good do you want to be in business?”. My answer was “Good”. OK, I wasn’t great with words back then! He pointed out to me that to be better than average I would need to work at my own learning and development. Which is what I’ve done ever since.
If someone works a thirty-five hour week that’s 1,645 hours each year. But if they pay little attention to personal development then they could end up at the same level, worth only the same pay, as the previous year. Some companies push training on their employees which will help some of them, but as a business owner you have to take care of yourself. Just 10% of the time learning would be 164 hours a year, or about half an hour a day. These days as a Business Coach I invest a day every week on my own development; it’s an investment. Occasionally it will be a whole day but usually it’s a series of planned hours. On average I read a business book every week. It’s easy to find excuses not to do this. “I don’t have the time!”. OK, get up an hour earlier or go to bed an hour later and gain 7 extra hours per week. It’s all about discipline. FEEL MOTIVATED The more you do, the more you feel like doing. You recognise that you’re making progress and look at things differently, with more drive and enthusiasm. Push yourself - the hardest step is the first one. BE COMMITTED It’s important to set yourself goals. I hear many people talk without commitment, with vague intentions that I know won’t happen unless they get a push. My clients know I’ll stop them in their tracks if they use the language of non-commitment. The banned words “try”, “hope”, “want”, “wish”… all indicate lip-service rather than true commitment. “I’m going to try and find a training course sometime this year” is a typical example. What I hear is “going to” means a vague intention; “try” means have a go at it, but maybe it won’t happen; “sometime this year” again means deferring any action. If you don’t mean it, don’t say it and fool yourself. Make real commitments. “I’m going to identify a training course today and book it to attend before the end of next month”. No get-outs, no ‘try”, no “hope to”… just do it. Now! Make a commitment to spend some time every week on your own personal development. If this seems hard in your schedule, start with finding just one hour per week. It’s a start and will make a difference. But I recommend daily or every other day so that the progress is more noticeable and consequently you’ll feel more motivated. If you struggle, think about when you feel most motivated - a walk, listening to music, whatever it takes - put yourself in the right frame of mind and do it. WHAT SHOULD I DO? There are many things you can do, so do what works for you and motivates you. If you don’t like reading books, try audio books on an iPod, especially if you have long journeys. If you can’t get to seminars then try ‘webinars’ where you can attend online. Here are some ideas to get you thinking:
What are you doing for your personal development, or to develop your staff? Leave a comment and let me and other readers know.