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7 Essential Secrets to Build a Business That Works – Part 4

The last three weeks I have written about the first five essential secrets to build a business that works…

To recap:

  1. Essential Secret Number One – You Must Have a Vision
  2. Essential Secret Number Two – There Are Only Four Ways to Grow a Business
  3. Essential Secret Number Three – You Must Have a Strategic Plan of Action
  4. Essential Secret Number Four – What you Measure, You Can Manage
  5. Essential Secret Number Five – Creating a Difference

 

This week, I will write about…

Essential Secret Number Six – Performance Standards

The secret is that most businesses have no standards. They just do it the way they learned in the past. It is not by design.

Consequently, there is no consistent pattern of performance that a customer can expect.

As a result, they experience something different every time.

This problem gets bigger as the business grows.

The solution is to create simple performance standards – created with your Team – that you can use as a tool for performance.

Even better – share them with your customers – and let them be the judge of how well you are doing.

Performance standards make it easy to manage your business – because now you can see when they are being done or not.

Performance Standards must be written down so that people can memorize or refer to them and new employees can be trained in them.

They must be simple and easily duplicated.

They can be managed.

For example – we have a very detailed set of performance standards to answer the phone.

One of the standards is to – “answer the phone on the second ring”.

This is a Performance Standard that is based in physical reality. It either is being performed, or not being performed. You can observe it and measure it in physical reality.

It is not an emotional, feel-good motherhood statement.

When anyone is not performing to the standard, it stands out like a sore thumb…

Performance Standards are designed to:

  1. Create consistency in the outcomes you are committed to produce.
  2. Give you a tool to train new people with.
  3. Create a culture that is bursting with energy and awesome service.
  4. Be measurable.
 Essential Secret Number Seven – Systems

If you’re not working on your business, you are working in it.

The secret is to work on your business and create powerful simple systems that work. A great business has a system manual – it is the blueprint for “this is how we do it here.”

After you have your systems created, outsource everything you do not like or are not good at. That means the bookkeeping, the administrative work, the emails, the phone calls, the event management…. all of it!! Leave yourself the fun, inspiring and important work.

Systems, like Performance Standards, are designed to create a way of doing things in your business. This “way of doing things should be unique and designed to create high-quality outcomes for your customers/clients in your products, services, aftermarket service, and delivery.

The system is your business. Your business is the system.

Think of a franchise, like McDonalds. When you invest in the McDonalds business franchise, what you are truly investing in is their systems.

A business that is not dependent on systems, is by default dependent on you, and on your people.

The more time you spend working IN your business the lower the value of your business.

Why?

Because potential investors will see the amount of time you are putting into your business. They want to buy a system that will give them a consistent rate of return based on their investment, not their personal time investment.

Thank you for reading…

 

7 Essential Secrets to Build a Business That Works – Part 3

The last two weeks I have written about the first three essential secrets to build a business that works…

To recap:

  1. Essential Secret Number One – You Must Have a Vision
  2. Essential Secret Number Two – There Are Only Four Ways to Grow a Business
  3. Essential Secret Number Three – You Must Have a Strategic Plan of Action

This week, I will write about…

Essential Secret Number Four – What you Measure, You Can Manage

A few weeks ago, I wrote about The Balanced Scorecard.

A few decades ago, business analysts thought the magical number of things to measure in a business was seven, plus or minus two.

Because of Business Dashboards you no longer must retain those seven essential numbers in your head.

We can expand those.

The things you choose to measure should not be more than three or four within four separate areas of your business:

  1. Marketing
  2. Operations
  3. Finance
  4. Human Resources

In other words, twelve to sixteen maximum.

The numbers you measure must have these characteristics:

  1. One key person is accountable for a number. Usually, this is a departmental manager.
  2. The number must motivate and result in a change of behavior and/or activities undertaken by a department.
  3. The number must be owned by the person responsible.
  4. The number must be tied to the performance evaluation of the person responsible for that number. They should be rewarded for positive performance.
  5. The activities related to the positive outcomes related to this number must not conflict with results in other departments, nor overall corporate objectives.
An Example of “What You Can Measure, You Can Manage.”

Most businesses want increased sales, yes?

One of the most leveraged ways to grow a business is to get existing customers to come back more often.

Yet, how many of you measure the actual transaction frequency of your customers?

First you must find the number.

In any given month you only need to find two numbers:

  1. The number of active
  2. The total number of sales transactions.

If you have one hundred customers actively buying and 1,000 transactions that month, your average transaction frequency is ten. (1,000/100).

To create an increase in your sales figures, you set a Target Number of eleven for Transaction Frequency.

What will you do to increase this number? What activities will you undertake?

Perhaps you implement loyalty cards, or start a weekly newsletter, or increase your awesome service levels with Team training.

With this new Target Number for Transaction Frequency of eleven, you now have something to measure the success of your efforts against.

Essential Secret Number Five – Creating a Difference

There is a saying: “when you have a niche you get rich, and when you don’t have a niche, life’s a b____!”

What a niche does is effectively eliminate the competition.

Because when you are specialized you have narrowed the market.

You can serve specific people, not a generalized amorphous mass.

Okay, so let us say you have a niche. The other key thing here is to start to differentiate your service in ways that wow people and sets you apart in interesting, memorable ways.

In most industries the inputs – the people you hire, the suppliers you deal with, and so on, are the same for everyone.

Everyone is dealing in a flat structure, and it is almost impossible to differentiate yourself on this basis.

The way to create a difference is to initiate awesome service standards.

The ones to build into your culture are little things that show you care.

For example, when we had an accounting practice in Victoria, BC, we ushered our clients into a small conference room and offered them a leather-bound menu offering them cappuccinos, organic snacks and teas from around the world. They loved it!!

We became known as the cappuccino accounting firm!

It set us apart, showed we cared, and let people know we were a high-class firm.

And it all cost extraordinarily little!

Thank you for reading…

 

7 Essential Secrets to Build a Business That Works – Part 2

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:

  1. Banks often saw the poor financial reports of their clients to whom they loaned money.
  2. The banks depended on impeccable financial reports for their monthly loan evaluations.
  3. 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:

  1. Loyalty cards (yes, they work!)
  2. Newsletters and other points of contact to get your customers to come back more often.
  3. Events and special occasions to bring your customers back more frequently.
  4. 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:

  1. Bundling products and services into packages.
  2. Scripts (“would you like a muffin with your coffee?”) work. Identify what they are for your unique business and build them into your plan.
  3. 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:

  1. Performance Standards for each aspect of your operations.
  2. Systems on how things are done.
  3. A flow-chart of operations including potential bottlenecks, and your production/service capacity.
  4. How to outsource functions for higher quality and less costly outcomes.
  5. 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:

  1. Quarterly and Annual Budget for your next fiscal year.
  2. Three-year Forecast.
  3. Breakdown of variable cost of goods sold/services performed.
  4. A detailed Fixed Cost budget of your overhead.
  5. Budgeted profit for which you are aiming.
  6. 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…

Framing – A Powerful Linguistic Tool to Shape How People See Your Business

What is framing in linguistics?

Here is an online definition – “framing is a process whereby communicators, consciously or unconsciously, act to construct a point of view that encourages the facts of a given situation to be interpreted by others in a particular manner”.

Here is my more streetwise definition – you use words in a way that directs people’s thinking to the outcome you are trying to create.

In other words, you say things in a way that resonates with the other’s deepest longings and desires.

In business, you are framing your business all the time. On your website, in your sales pitch, in your emails, in what you say when talking to clients and prospects.

The challenge I see is this…

Most Communication (what you are framing) Are Motherhood Statements

“We provide better products and service than the competition”.

“We make better widgets than any company in this region”.

“We have been in business 35 years”.

…you get the idea…

These statements do not inspire anyone to act! They do not resonate with what the customer is looking for!

Weak Framing Sounds Like This

Framing in business helps us fill in this gap:

“I buy the products from this business because _______”.

Using the above fill-in-the-blank sentence, I will fill in the motherhood statements above.

“I buy the products from this business because they have been in business for 30 years”.

“I buy the products from this business because they make better widgets”.

“I buy the products from this business because they provide better products than the competition”.

Framing connects the dots from what you want people to think about your business and the subsequent actions they will take.

Does anyone think that framing your business using the kind of weak statements above will inspire prospects to take action?

No, right?

An Example of Strong Framing

I know that I have effectively and powerfully framed our business if a client says this about us:

“I buy the services of CPLUS because they took the burden of accounting off my shoulders for a Fixed Fee. On top of that they coach me by the numbers every month so I run a better business”.

Framing Re-Directs the Conversation

When you take control of the conversation about your business you direct people’s thoughts away from the competition. You shape outcomes.

Your business becomes the solution to the problem they are seeking to solve.

Done successfully, price becomes less of a focus.

When you cannot powerfully frame why prospects should buy from you, then you are equal to everyone else.

My Coaching

Find the biggest problem people are trying to solve by buying your products or service.

Identify the biggest common frustrations people have in your industry.

It could be things like – slow delivery, hourly billing versus fixed prices, surly service, dirty worksites left by blue collar trades people.

Whatever the top three frustrations are, create systems and ways of delivering your products and services that take away those top frustration in your industry.

Finally, frame what you do using powerful, attention-grabbing words that will direct people to take action. To engage with you and buy from you.

Thank you for reading…

 

Soft Skills Equal Hard Results

These are tough times for small and medium sized businesses…

People have less cash to spend (more money is going to cover basics like food, fuel, and mortgage payments).

Credit for small businesses is either not available or unaffordable with exploding interest rates.

What to do?

Batten down the hatches and trim expenses? Hang on until the wave passes and then come up for air?

How about going the other way? What about investing in soft skills for your team?

Awesome Service Training

Many businesspeople I talk to about investing in soft skill training for their Teams resist it in one of 3 ways:

  1. They say, “we already do awesome service. We do not need it”.
  2. They mistakenly do not make the connection between soft skills training and hard-core business results.
  3. They do not see it as relevant to their business, or their industry.

First, before we get into these three objections, what exactly are soft skills?

Soft skills are training that embed Performance Standards for your Team in the service aspect of your business.

And, every business has a service aspect, even if you sell manufactured goods.

They are things like:

  1. How many rings before you answer the phone?
  2. What is the first thing every customer hears/reads when you answer the phone, enter the shop, read an email? Is it consistent, kind, filled with softeners?
Softeners

Soft skills are well named. They are often words, or scripts that soften what is otherwise harsh, cold basic business language.

Even greetings like “good morning, good afternoon, or even hello” can be considered softeners.  “By the way”, “I was wondering if…”, “do you mind if a put you on hold?”, “thank you for your patience” are a few other softening phrases.

Even punctuation marks like “…”, or a comma instead of a period can serve as sentence softeners.

Can you feel the difference between these two as an example –

Thank you,

Thank you.

Softeners in speech, emails, and phone calls can act like the honey that sweetens the harsh, cold words of language.

Is it less efficient? Yes.

It takes more time in speaking, writing, and on the phone.

Recently a business associate sent an email to one of my Team members.

It had no hello, no good morning, no greeting, no name, nothing.

It consisted solely of 5 words:

“What the heck is ____?”

This was the first email ever received from this person.

It was more efficient, yes. However, it occurs as a little abrasive and rude.

And this is another mistake people make. It is a big one. They think it is okay to speak rudely to their internal Team and then pour on the sugar for outside customers.

No, no, no.

How you do one thing is how you do everything. Customers will one day overhear rude language to internal Team members. This makes them immediately suspicious of the motives of the company’s external politeness.

Soft Skills Equals Hard Core Results

We all know that soft skills equal hard-core results. We know this is true. How?

Because we as consumers are always shopping with our wallet. Especially when it comes to eating out.

Take two restaurants with the same quality food. One place has awesome, genuinely caring, consistent service from the time you enter to the moment you leave.

The other one may have slightly better food. I would assert that the first place will have more repeat business, a higher average sale, more referrals, and more profit than the second one.

More than any other factor people come back to a business when they feel that you genuinely care for them. To demonstrate that you authentically care for your customers, you must have Performance Standards that consistently show that you do care for them. It cannot be a “once in a while” experience.

Performance Standards in action also must be done for their own end, not to get more sales, or a higher average sale.

Your customers will smell the insincerity.

Awesome service Performance Standards must be done because:

  1. It is the right thing to do.
  2. They make you feel great.
  3. They make your customers feel great (even if they do not come back).

 

Okay, let us go through the objections people have for implementing soft skills training….

Number One Objection – “We Already Provide Awesome Service. We Do Not Need It”

Does your company have documented Performance Standards for all areas of your business where customers engage with you?

If no, then I would assert that it would be impossible to create consistent wow factors for your business.

Consistency also means that the standards are the same regardless of which Team Member is serving a customer.

They are the same every day in every interaction.

When not, you can create additional Performance Standards for dealing with the break-down in a way that leaves the customer impressed with how you handled it.

Your Performance Standards cover:

  1. How you respond to emails (timeliness, tone, content, follow-up).
  2. How you greet customers when they come into your store or shop.
  3. How clean your store, shop and bathrooms are.
  4. How you answer the phone, the scripts on the phone, and how you end the call.
  5. In short, every single what we call “moment of truth” is designed in such a way as to leave your customers feeling cared for, served, even wowed.
Number Two Objection – No Connection Between Soft Skills Training and Hard-Core Business Results

The way to prove that soft skills lead to hard core results is simply to measure the impact over the first quarter after implementing an awesome service skills training. (This should be the first quarter after the results are embedded in your Team).

I would assert that you should see more repeat business, more referrals, and a higher average sale per transaction.

And it is important to measure those three things; however, that is a topic for another blog.

I know of a regional Australian airline that implemented an awesome service phone training a few years ago. In the first year after that training, they saw an increase of $21 million in sales. Pretty hard-core results, wouldn’t you agree?

Number Three Objection – My Business is Special, Unique

Many businesspeople I talk with are victims of magical thinking.

They believe that there is some brilliant, unique formula that will produce great results in their business.

Awesome service Performance Standards just seem too basic, too elementary for their “complex” and unique business.

Yet, I repeat, again – what has you return to a particular restaurant, hotel, shop, online business? Is it solely price? Is it solely the product?

No, it is the before you become a customer experience, it is when you are buying the service or product experience, and it is after the transaction is complete experience – i.e., the follow-up.

Every single business and organization on the planet wrap their product or service in some kind of service delivery mechanism.

Without Performance Standards It will be ad hoc, unplanned, unscripted…which means your customer’s experience will be different every time. It will change depending on the day, the person, the branch. Or even non-existent.

By delivering your product or service inside well trained and consistently applied Awesome Service Performance Standards you will almost be guaranteed of increased sales, repeat business, and higher cash-flow and profits. That is on the condition that your products are very good quality or above standard.

Thank you for reading…

Do You Make These Top 3 Mistakes in Selling Your Services?

What is the greatest thing in your business? The tools you use?

Nobody Cares What Tools You Use

Imagine you are a home builder. And, you have the absolute best tools in that industry. You have the Triple A, skookum, best-in-class power widget tools out there.

Maybe you have custom tools that no one in your industry even heard of.

Does your customer care?

No.

Sorry. No.

I can prove it. A guru home builder has the ability to make you a stunning home with a hammer, and handsaw. You see where this is going, don’t you?

It is so easy to make this mistake, though.

I do it all the time. When we started our amazing, skookum, best-in-class outsourced, online, fixed-fee accounting service 20 years ago, NO ONE was doing it.

We developed custom scanning/upload software to do it.

We were immensely proud of that, and our custom servers, and dual monitors (at a time when most considered that wasted screen real estate). So…we…talked…about…our Cool Tools.

We signed up clients, but not because of our cool tools.

Nobody Cares How Great Your Team Is

Ok, so you zip your lip on the cool tool topic. Great!

Do you think your customers/prospects want to know how amazing and skilled and peachy your Team is?

I could talk about our amazing Team for hours. Why? Well, they are simply amazing. And I am proud of them.

Prospects do not care. Why not?

They do not know them like you do. You might as well talk about how cute your children are!

They do not care. Sorry.

Nobody Cares About your Systems, Features, Price, How Long You Have Been in Business…

You can tell that headline could be 9 miles long, right?

This blog could have been one sentence long. Nobody cares – gives 2 cents – about you, or your business.

That is really the truth, isn’t it?

Selling is exactly like dating.

The person you are interested in dating is not interested in anything about you. Yet. That will come.

They want to know what difference dating you will make in their life. What experiences you will bring. The fun. The joy. The laughter. The romance. The future. The children. Ok, you get the idea…

Prospects Have One Thing. And They Are Looking to You for One Thing Only

Prospects have a problem. In many cases they do not know they have a problem.

Your job is to uncover it. Your job is to be the solution.

Talking about the tools you use, the Terrific Team you have, or any other feature is of zero interest to them.

They need to hear you say exactly what their problem is. They want you to say it in a way they can hear it. (They may be embarrassed about their “problem”).

You have to find their pain.

Empathetically.

Because emotions are involved. They want to feel great about their decisions.

Great selling can be summed up as:

  1. Find their problem
  2. Find their pain
  3. Be the solution that makes them feel excited

Do you never talk about your great Tools, Team, and Techniques?

If they ask. But keep it short and focused on the results/solution you will bring to resolve their pain and have them feel excited again.

Thanks for reading…