Building Businesses

“If it doesn’t add up, don’t do it.”

Brought to you by Business Coach David Guest

Business is all about making a profit, so if your business strategies aren’t adding up to business profits, don’t do it, or do it differently.

To be a business – that is, ‘a commercial, profitable enterprise that works without you’, your business must give a good return on investment plus a full wage for every hour you spend working in your business. You can then pay someone to do your job and the business profits are not affected.

The quote ‘if it doesn’t add up, don’t do it’ can be applied in all areas of your business. Advertising is a prime example. If an ad is run and does not get an immediate response, there is no point in keeping that ad running. It is wasting precious time and money.  Change the ad or where it is running.

Increasing your team must also add up in dollars. Perhaps a business should consider setting training and operating systems in place so juniors can be hired to follow the systems, rather than hiring seniors who have the head knowledge of how it should be done.

Alternately perhaps the business should look at new machinery or technology instead of more team members.

If you want to buy a business the figures also must add up – or have the potential to do so.

Make a list of the criteria the business must fill and make sure this list is filled before you commit yourself. Many people buy into something believing it would fulfill their needs, to discover the figures were inaccurate or did not add up. If you are not sure, get help. Two heads are better than one, and prevention is better than cure.

A great idea when looking at a business is to check the industry average and see how your business compares with the average. Given that four out of five businesses go broke in the first five years, you may want to be better than average.

Finally, the bottom line where your figures must add up is in net profit margin. To get this figure a business must add all expenses, including an appropriate wage for all the hours put in the business plus interest on the capital you put into the business. This will give your real margins.

‘If it doesn’t add up, don’t do it” must be applied regularly. Don’t wait until the end of the financial year to find if you have made a profit. Business is work, but it should also be fun.

If you would like to learn more about how to measure your success call David Guest on 1300 728 466.

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Want to Know How to Sell… All you have to do is ask?

When it comes to sales your customers quite literally have all the answers.

Have you ever answered a question with a question? Would that be making a difference to your conversion rate? The answer to the latter is most definitely yes! Asking questions not only increases your conversion rate, but builds rapport with your customer and ensures that the sale becomes their idea and not yours. 

Ask sinage

Asking questions also means active listening. You can ask questions about your customers work, business, kids or hobbies but make sure that your are listening with sincere interest. It may even be helpful to note down some of the answers – such as the names of their kids, interests etc for future communication. By asking questions and listening, you are building rapport and attaching importance to their conversation.

Also, by asking questions you are remaining in control of the conversation. Once you find yourself doing all the talking you are no longer in control. Just remember that the person asking questions sets the direction for the conversation. If the customer is dominating the conversation by asking you questions make sure you answer the question with a question. However, try to vary the questions that you ask. You may remember from looking after your own children or babysitting that being asked “but why?” over and over again tends to get a little monotonous.

Questions can guide consumer interest, discover a need and give accurate information.  There are two commonly known types of questioning – open ended and closed questions.

 

Building Rapport and Qualifying

Open-ended questions are an excellent way to ensure customer involvement in the conversation and are key to identifying not only what they need but a lot about themselves.  You can use open-ended questions to build rapport, to find a need, to discover a customer problem and find the right solution. In journalism there are six key questions used in the interviewing process which is as equally useful in sales – who, what, where, when, why and how.

Here are a few example of open-ended questions which are very useful:

  • Who are you buying the product/service for?
  • How often would you use the product/service?
  • What features were you looking for in this product/service?

 

This type of questioning yields a lot of great information from your customer and helps you determine which product/service is uniquely suited to them.

Closed questions tend to get one word answers “yes” or “no”. They can be used to gather information quickly – not unlike a check-list. Using closed questions can also confirm a buying detail and help confirm the sale.

By using questions you are encouraging the customer to communicate, building rapport, establishing their needs, directing the conversation, diffusing tension and inviting discussion.

Learning the art of questioning and listening is the key to increasing your conversion rate and well on the way to creating a continuing customer relationship.

 

By David Guest

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The Big Game of Business

When I talk to business owners, we often get into the conversation of how much should a business owner expect to make?

Different business graphs with Think Bigger sign

My rule of thumb is simple… Take what you think you’re worth as an employee… And multiply it by 3…(3x)” That should be your minimum expected take home, after tax wage! For most people in business this blows their minds. They look at their current profit and realise this figure is an order of magnitude away!

So, lets look at why 3x? It’s simple. When you decided to become a business owner, you probably did it for one of 2 reasons. 

  1. You either wanted to make more money, work less hours, or just be your own boss. 
  2. Or you didn’t have a choice, you were retrenched, made redundant, or are just unemployable.

 

When it comes to setting a goal for your business, the main number you need to look at is Leftover, not Turnover. That is net profit. As an owner, this is the reason we run a business. The problem is that this number can be highly variable. What I mean is that when you have a quiet month, you will still pay the bills, the wages, even the tax man. But the first person to miss out is you.

So the reason we aim for 3x your wage is risk. And risk is something that very few people value and expect to be paid for. You see, in a job you get holidays, sick pay, superannuation, long service leave and other benefits, when you decide to run a business, you sacrifice all of that for the dream of freedom.

Now for the brutal truth…. It is nearly impossible to be self employed and maintain this type of income. The only real way to achieve 3x is to build a business that works without you. The first one will be hard, but once you’ve mastered the skill, it becomes so much easier.

One of the best kept business growth secrets is acquisition… yes, buying other businesses is the quickest way to grow yours. I call this the big game of business, and it cannot be played when you are stuck in the engine room. You see, building your business system and your team is really about giving your the time to play the big game. That is, acquiring your competitors and expanding your service by adding complimentary services. 

When you get to this stage, business growth is exciting and rewarding. One of my favourite books on the subject is “The Magic of Thinking Big” by David Schwartz.

So don’t let the day to day busyness get in your way. Start today by committing to building your leftover to 3 times your wage, and get to work on building your business system so that your business can work for you.

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The Power of Keeping in Touch

 

In my 30 years in business, nothing has ever been more effective as a sales tool than building a relationship with your prospects.

I used to send a paper newsletter to clients and prospects every quarter to keep them informed and stay connected.

In a world of blogs, tweets, social media, cookies, sticky pixels and follow me marketing, is a newsletter still an effective tool? The answer is both yes and no.  As a business owner I am constantly looking for R.O.I. on my marketing dollar. This means that a cost effective blog or email can stretch my marketing dollar further, so in terms of raw numbers, electronic media trumps paper.

The real question we need to ask is what media or channel sends the right message in the right way at the right time for our prospects.

You need to become a Welcome Guest rather than an Annoying Pest

You see, keeping in touch is not about spamming or harassing your prospects. It’s about meeting them where they’re at and leading them on a journey to understanding who you are and how you can help them. 

Too many business owners do not invest in nurturing their database and their relationships, they would rather find a quick fix through a Google adwords campaign or some other form of paid advertising. It cost 6 time more to get a new customer than it does to get an existing customer to come back.

For most, it’s easy to procrastinate. A good friend of mine said, “Don’t let Perfection get in the way of Production!”. Put your ego to the side and get your first email/blog posted, and don’t stop there. Commit to keeping in regular contact for the rest of your business life.

Take your “Keep in touch” strategy seriously by investing in building and maintaining your database through great content and regular contact and watch your marketing start paying huge dividends.

Action Points:

  1. Decide today to keep in regular contact with your clients, prospects and referral partners.
  2. Set a frequency of contact. In most cases it should be no less than quarterly.
  3. Choose your channels of choice. Email is still the best for direct contact, but you can blog, tweet, post, SMS, even use snail mail.
  4. Set up diary reminders to keep you accountable.
  5. Don’t expect any sales or leads, just do it to keep the relationship going.
  6. Create content by asking yourself “How do I add value or help my prospects?”
  7. Keep at it!

 

To find out more about the best “Keep in touch” strategies, get in touch with one of our team today.

man holding phone
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When to build your team

 

Putting a team together to build your business is exciting, but can be a fatal move.

Knowing when and how to build your team is a defining moment for the growing business.

Watch this short video and learn how to prepare your business and attract the team members you need to ensure success.
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How to think like an entrepreneur

 

Out of the thousands of business owners I talk to, there is a common thread that separates the successes from the failures.

It is all about the mindset and how they think about the challenges and opportunities they are faced with on a daily basis.

Watch this short video and learn how to play the game of business above the line…
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A fitbit for your business??

 

Moving your business from Chaos to Control is possibly the most challenging and relentless pursuit of a business owner.

The Fitbit has revolutionised personal health by giving people direct feedback on how many steps they took today and comparing it to a target or goal. 10,000 steps would be nearly impossible to count manually, but with this smart little device, we can monitor our progress at any time during the day.

How can you create a “fitbit” like structure to keep you focussed on your business goals with the ability to check progress. instantaneously?

Get to work on building your business fitbit and start moving from chaos to control today!

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Thoughts of the Week: Why You Need to Fail Faster

 

People know to think about failing as a good thing. However, nobody loves to fail and this is one of the biggest problems with running your own business. Learning how to fail is one the best ways to grow. Its not about failure, its about how quickly you can recover.

The tip of the week: Learn to fail faster. Make more mistakes, but learn from those mistakes and move forward.

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Collusion: Don’t Let Yourself Off The Hook

 

A big problem that business owners face is that they are both the owner of the business, and the number one employee!

Have a think about what that means…

If the owner is telling the employee to be more effective, and the employee tells the owner that they’re flat out and don’t have the time. And they are one and the same person… Who wins?

This is know as collusion. In a large organisation an employee would have a job description, performance standards and KPI’s,  If they don’t deliver, they don’t get to stay.

When the owner and the number one employee are the same person, they let themselves off the hook.

We see it all the time, the impact showing up as no profit in the bank account.

People end up working too hard and making no money.

Going into business means making a profit, it’s not about being in busy-ness.

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The Power of Personality Profiling

   

Last week we ran a workshop on DISC profiling. Haven’t heard of ‘DISC Profiling’? We have you covered.

DISC profiling is a really useful tool for every business and every team. DISC profiling is the result of many years of research into the behavioural types of human beings. It is a language that we can use to understand how to communicate better. It has become a useful business resource for team management, sales, customer service or any communication based activity. All leading companies will integrate some form of DISC profiling into their workflows.

 

The DISC Profiling system splits into four personalty types. Dominant, Influencer, Stable, Compliment – this is where it gets its name from. These personality types are outwardly or inwardly focused and task or people oriented. Each personality has a different mix out outward, inward, task or people orientation. I’ll take a look at each personalty type below…

 

Dominant

The Dominant personality type is task oriented and and outwardly focused – they are extraverts. These are the kinds of people who like to get things done, they are bottom line thinkers. They can be known as bulls in a china shop, but are generally high achievers. Their weakness is that even though they are extraverts, they don’t intuitively understand people or how to build relationships or rapport. However they are great at starting projects and progressing them forward so are an important personality type when building a successful business.

 

Influencer

Moving clockwise around the diagram, we get to the influencer. The influencer is is also outwardly focused, but they focus more on people than they do on tasks. Influencers are the life of the party, the centre of the influencers world is themselves. The influencers strength is their ability to rally people together, they are motivators, they are energised and optimistic. An influencer personality type is great at cold calling. The influencer falls short in their ability to get things done.

Stable

The next personality type is s – the Stable personality. The s person is still people oriented, but is actually an introvert – they are inwardly focused. The difference between the I and S personality types is that S people are very conscious of their surroundings and the people around them. Their biggest strength is their ability to support the team. Their weakness is that they often fear change. They are great at keeping your team together but if you ask them to do things differently or get them pumped up you may face problems because they like consistency.

 

Complier

 

The last personality type is the Complier. The compliance personality type is someone who is inwardly focused and task oriented, they are more reserved people. This person is generally a perfectionist, they love analysing data, and they love building things. Their strength is their attention to detail – everything they do will be done to perfection. However perfectionism is not always good as nothing gets out there.

 

 

Every person will be a mixture of these personality types, but will be dominant in one of them. Each one of these personality types have strengths and weaknesses, but when running a business you actually need a mixture of all of them. Think about the DISC profiling system as a way of learning how to communicate better. You can learn to identify personality types and change how you communicate with them to get better results. DISC profiling can help you with your team, with sales, with networking, with building rapport, and with you clients.
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