Last week I shared the first two essential secrets of building a business that works…
Secret # 1 is Vision. Without Vision, your business perishes. It is like a vehicle or house built without any design.
Secret # 2 is that there are only four ways to grow a business. Knowing this can super charge your business by focusing on each way with separate strategies.
As a reminder, the four ways are:
Way Number 1 – Increase The Number of Customers of The Type You Want
Way Number 2 – Increase The Number of Times Your Customers Do Business with You
Way Number 3 – Increase The Amount of Money They Spend with You in Each Transaction
Way Number 4 – Increase The Efficiency and Effectiveness of Each Process in Your Business
This week I will share Secret Number 3…
Secret # 3 – You Must Have a Plan
Your plan is the roadmap of how you get from your Vision to the result you are committed to creating.
The result for most businesspeople is a business that works. A business that works without them. A business built with their skill, yet not dependent on their skill. To use a well-known cliché – you spend the time to work ON your business so that you do not need to work IN your business.
A business like this will give you the freedom, and financial independence you went into business for.
There are four pillars to your business plan.
The first is your marketing plan.
Your marketing plan must revolve around the first three ways to grow your business, mentioned above.
Each of the first three ways to grow your business requires a different strategic focus. It requires different thinking.
How to Get More Customers (Of the Type You Want)
Your marketing plan should include how do you get more customers of the type you want.
One of the least expensive, and most highly leveraged ways to get more customers of the type you want is to piggyback on a strategic partner who may have many clients/customers of the type you want.
It is not expensive because they already have the customers you want access to. Getting this “partner” to endorse your business gives you a huge competitive advantage and brings you warm leads versus cold leads.
Paying to advertise your business in the cold marketplace is extremely expensive. It often brings you price sensitive customers who are not loyal.
I will give you an example of finding a Strategic Partner in my business. I created the idea of a Fixed Fee, all inclusive fee for businesses who needed a Financial Controller.
They were not getting the results they desired by hiring in-house staff.
I took my idea to Canada’s biggest banks. I did this because:
- Banks often saw the poor financial reports of their clients to whom they loaned money.
- The banks depended on impeccable financial reports for their monthly loan evaluations.
- They felt good about saving their clients money with our service and getting them better results.
The banks referred to us our first clients. Because their bank referred them to us, the “sales process” was minimal. They were already sold!
After those first successes I then spent most of my marketing time building relationships with banks. I went for lunches, did seminars, and called them.
How to Get Your Customers to Come Back More Often
The second part of your marketing plan must focus on getting existing customers to come more often.
Now the focus is not on winning over new customers; it is on loyalty. And in business, loyalty is expressed by how often your customers do business with you.
You plan can include:
- Loyalty cards (yes, they work!)
- Newsletters and other points of contact to get your customers to come back more often.
- Events and special occasions to bring your customers back more frequently.
- New products and services.
This is one of the most highly leveraged ways to grow your business. In fact, if you have a large customer base and your customers, on average, buy from you, let us say three times a quarter. And you increase that to 3.5 times, your bottom-line growth can be explosive!
It is also the least expensive way to grow a business because you are marketing to existing customers.
How to Increase Your Average Sale
The third part of your marketing plan must include how you increase the amount of money your customers spend when “you give change at the till.”
Your plan can include things like:
- Bundling products and services into packages.
- Scripts (“would you like a muffin with your coffee?”) work. Identify what they are for your unique business and build them into your plan.
- Adding more products and services.
As in way number two above, this focus can be very inexpensive for the same reasons. You are marketing to existing customers.
Creating scripts that work cost you only some time. Training your Team is inexpensive, as you already have a Team to train!
Your Operations Plan
You need a plan on how you deliver the best results that will wow your customers.
Plan for systems and use technology for them.
In our company all our systems are in the cloud and not on pieces of paper.
Your Operations Plan should include:
- Performance Standards for each aspect of your operations.
- Systems on how things are done.
- A flow-chart of operations including potential bottlenecks, and your production/service capacity.
- How to outsource functions for higher quality and less costly outcomes.
- Your Organizational Chart.
Your Financial Plan
Here you need a map on how you will get from where you are now to where you want to be in three years according to your Vision Statement…
Your Financial Plan/Forecast must include:
- Quarterly and Annual Budget for your next fiscal year.
- Three-year Forecast.
- Breakdown of variable cost of goods sold/services performed.
- A detailed Fixed Cost budget of your overhead.
- Budgeted profit for which you are aiming.
- The sales required.
Most accounting software packages include a budgeting feature.
For our clients we use a sophisticated software for Forecasting. We review monthly and update quarterly as required.
Your Human Resources Plan
Here you need to think about what functions can be outsourced and what do you absolutely need to do in-house.
Having to let go of employees is extremely expensive, as the longer a poor performing employee is kept on the higher the cost of letting them go. This is because of employment laws around severance pay.
The monthly costs for employees are extremely high with all the extra burdens of Canada Pension, social security, workers compensation, employment insurance and medical benefits.
Hire for attitude and train for skill.
With great systems and people hired with a great attitude (something that cannot be trained) your business will work better than only looking to hire great people.
Turnover is costly so hire carefully.
Ensure your plan includes a probationary period so you can let people go without too much expense.
Next week I will write about Secret #4 – What You can Measure You can Manage.
Thank you for reading…