Nothing prepares you for the rigors of real-world Business Ownership. Business school has its place, but it won’t teach you what to do when your bank balance is about to go into negative, whilst your biggest client owes you money which is three months overdue. Or why is it that my business is making more sales, but I’m not making any more money?
This is a collection of proven initiatives – tested in the real business world. Some are practical. Some are mindset shifts. All are real.
Let’s skip the theory. Here’s the real curriculum.
1. Most businesses are too complex.
Over time, systems, processes, and staff are added to your business with the best intentions. However, everything soon starts to become complicated and intertwined, and you lose track of the few important things that actually produce the results in your business. It becomes very difficult to make smart strategic decisions.
True genius, is being able to simplify your business. When you do, watch how much better your decisions become.
Clarity = Power
Power = the ability to Act
Engineer and inventor Colin Chapman once said "Simplify, then add lightness."
2. Differentiate or Die
Q. What could you charge if you had no competition?
Success in Business is determined by how successfully you give Customers a reason to discriminate in your favour.
In business, there’s always a competitor who can sell your product or service for cheaper, better, more efficiently, faster, or in bigger volume than you. The trick is not to be a “Me too” provider.
Find a way for your business to be different, and market this difference. You’ll almost never compete on price again.
3. Meeting Agendas
Meetings are expensive for any business- regardless of size. So make them count. Never have a meeting without everyone having the agenda sent to them beforehand. No agenda – no meeting. And if you want to take your meetings to the next level, send an agenda which states what you want the meeting to Cause, not just cover.
4. Profit is made $1 at a time.
Constantly looking for that silver bullet idea that will double your company’s profits, usually means you’re likely to miss the small changes that make all the difference to your businesses growth.
Q. Do you think you’d be able to reduce your costs (COGS & fixed costs) by 1%, increase your prices by 1%, and increase your number of sales by 1%?
Most business owners would say Yes.
Q. So what difference do you think these three small changes make to your bottom line (net profit)?
A. 24% increase (approx..) to your net profit.
Don’t take my word for it, do the calculation…
5. Systemise the norm, Humanise the exceptions.
Set up systems in your business based around what normally happens most of the time. This will allow your team to work efficiently for 99% of what they do. Then when the unexpected does happen, allow your people the freedom to deal with it.
Don’t try to systemise the exceptions – it overcomplicates everything.
6. Hire Slow, Fire Fast
Business success is ultimately based on who you hire, and who you don’t fire.
Take your time with recruitment - NEVER offer a candidate the role at the first interview.
Conversely, if you know you have an employee who is just not right for your business, the sooner you get them ‘off the bus’, the sooner your business can start moving forward again. Putting it off, costs your business more and more money, every day.
And don’t forget - The biggest cost of a bad employee, is never their salary.
7. Have your Employees train each other
Ask one of your employees to conduct a training session. Not only does the business receive training without bringing in costly external trainers, the person doing the training receives the best education. Teaching a task to someone, means we have to get it clear in our own mind first. The best way of learning something inside-out, is to teach it.
8. Ordinary things, done consistently well, produces extraordinary results
Turning around performance in a business almost always comes down to doing the basics, and doing them consistently well over time. You self-sabotage when you’re always looking for the next silver bullet, the one massive thing will change everything. We do this, because we want quick results. Unfortunately, business doesn’t work that way. It’s not designed to give you instantaneous feedback and results, either good or bad.
The easiest step is virtually always something simple:
Something you already know
Something you used to do years ago.
Something you or your team do sometimes, and know you should do more of
And if you keep doing it, and keep doing it well, watch what happens to your business.
9. Big Cars and Fat cigars.
One of the best pieces of advice I was ever given is:
“Look after your Cash, your Staff, and your Customers, in that order, is the key to a long term business.”
When you’re business is going well, you tend to think about rewarding yourself, rather than saving cash for that inevitable rainy day.
Business success, is as much about what you spend, than it is about what the business makes. Owners need to be conscious of what they spend. A new car, a new toy, a new employee (overhead), you probably don’t really need right now. Just because you can, doesn’t mean you should.
Remember, even once you’ve paid your suppliers, your employees wages, and expenses, only around 50% of that money left in the bank is actually yours. Please don’t go and spend it all…
10. Most businesses undervalue their worth
When you undervalue your products or services, customers will do exactly the same.
If you haven’t increased your prices in 12 months, then do it. Every business is different, so how and how much is up to you – but you need to do it. You’re unlikely to lose any customers. Even if you do lose a few customers, you will still be better off financially.
The quick, simple way to make more money in your business is to put your prices up.
11. Update your website
It seems like too much time and money is spent by businesses on their social media marketing, and not enough on their website. Your website is almost always the first place people look, to get an idea of your business. A poor first impression, can kill any potential new customer relationship before it starts. Did you know that 60% of the buying cycle is over before a customer speaks to a representative of the business? Your website gives that crucial first impression, that can lead to a conversation. Investing money in your website is a wise investment.
12. Don’t choose Strategies, you know deep down you won’t execute consistently.
Most business owners don’t have the business they want, because they consistently select solutions they either cannot, or will not consistently execute.
Unfortunately many MBA business books will tell you to first select a strategy, and then work out how to achieve it. However, this doesn’t take into account your abilities and resources. You could select the best strategy in the world, but if you don’t have the time, money or resources to execute it (and you need to be honest with yourself), it’s unlikely to work for your business.
13. The biggest Culture Killer
Instill a non-negotiable rule in your business, where nobody says anything about another employee, that they wouldn’t feel comfortable saying to their face. Simple, but powerful.
Back-stabbing, or speaking ill of a colleague is the lifeblood of a toxic culture. It’s more damaging to your business than you will ever know. Try to instill this mindset in your business, and over time you’ll start to see the difference.
14. Why do my staff keep disappointing me?
When an employee is not performing in their role, there’s normally a number of things at play.
There are generally two reasons why employees continually disappoint the owner:
Lack of Clear and Consistent communication
No effective management system
Eg.
They haven’t been trained properly
They don’t have capacity to do all of their tasks
Something in their working environment is making it difficult to perform.
They’re not aware of their requirements, and what is most important
They’re not aware Why this is important
All of which, you are responsible for. Try not to blame. Always take responsibility for poor performance.
Disappointment is often a case of unmet expectations. They just don’t know exactly what you expect. So before you come down hard on a poor performer, find out more…
15. Have clear KPI’s for your business, but not too many
Glossy and fluffy are always safe, but Specifics and Accountability require courage. Be clear with your team on the few numbers in the business that are most important. And meet regularly to discuss them. Just be sure not to have too many – the fewer the better. Even if it’s just one or two. You’ll get much better results with one or two KPI’s, than you will looking at many KPI’s with your Team.
I know of a number of hugely successful multinational businesses, who’s Executive Teams only focus on 2-3 key metrics for their success.
16. Too much focus on Turnover
Try to avoid boasting about your businesses turnover – it’s often a false indicator. Cash, and positive cashflow, is almost always the best indicator of the health of a business.
Turnover is Vanity.
Profit is Sanity.
Cash is Reality.
17. Make more money – fire your D-grade Customers
Most businesses never do the calculations on what their worst customers actually cost them. Which is understandable, because after all, they do provide some degree of income. However, if you do the full calculation, you’ll be surprised.
Your staff spend time sorting out their issues, at the expense of servicing your good customers who pay on time, and don’t complain.
Getting rid of your worst customers, will in most cases save your business $1000’s. Do it, and thank me later.
18. Profit First
There are countless examples of business owners who have grown their annual business revenue to more than $10million, only to discover that they are earning the same or less than when their business was ‘small’.
WHY?
Because business costs always expand to fill an available space.
Rather than letting your Costs determine your Profit, try switching it so that the Profit you want, determines your Costs.
Traditional way of doing business Sales - Costs = Profit
Try Sales – Profits = Costs
This really does work.
19. Squeaky gate gets oiled.
When you have a notoriously slow paying customer, understand that these companies are always paying someone. Their business couldn’t function if they weren’t. Even the worst payers pay someone. So let that be your business, through relentless communication. Weekly phone calls, sometimes daily. And if practical, send an official letter, with a deadline for payment before legal action is taken. You often don’t need an external debt collector to be taken seriously.
Why not try emailing a few days before an invoice is due?
“Hi David, just emailing about invoice 187, which I know is not due until Thursday. If you don’t think this invoice will be paid by Thursday, can you give me a call please? Thanks..”
Try it - it actually makes a difference.
20. Excess debt
Debt gives the illusion of wealth. True wealth is assets, cashflow, and manageable (minimal) debt. Excessive debt, and hope, are the root of all financial crises in business.
21. Look after your key suppliers
Your Suppliers are almost as important as your customers. Look after them (and there are so many ways you can do this), eventually good things happen – it’s like magic.
