This week, I met with two very determined business owners that could not understand why their company was not making money.  The bad news was showing signs of trouble for almost a year, yet they forged on continuing to do the things they had always done.  When I asked them why, they told me that their ‘hope’ was if they ‘waited’ long enough, the economy would turn around and lift their business to profitability.  As they sat in front of me, however, they were now faced with closing down if things did not get better in the next 2 months.

TWO MONTHS!  They waited almost 12 months thinking that what they were doing was enough to right the ship.  Now as they are taking on water, they decide to reach out and get the help they need in hopes that it is not too late.

The Landscape Has Changed:
Our latest economic typhoon is not the first our country has ever experienced and it won’t be the last.  In terms of severity, it definitely has been rough.  Just about all mainstream businesses have been hit with declining revenues, loss of customers and a steady stream of financial blood oozing out of the front door.  Not every business, however, is doing poorly.  The fact remains, over 90% of all small businesses fail before their 5th year in business regardless of the economy.  It’s not what you think you know that keeps you moving forward, it’s what you take action on.

In my role as a small business coach, I see this scenario played out over and over.  Business owners that do not engage in the most effective revenue generating activities, i.e. sales and marketing will eventually lose to those that do.  But it is not necessary that you know how to do they things well, just that you realize you need to do them.  My two acquaintances had never stopped to think that because they really did not need to market themselves 5 years ago, they could get away with it today.  Indeed, the business owners who have always participated in marketing now find themselves totally confused by the changes in the marketplace and the way to effectively market them.

Neglecting Change Can be Painful
So why do so many people who clearly need the help and are losing money every month that they don’t get the help, so willing to wait in hopes that things improve on their own!  It has to do with ‘gradual decline’.  When your circumstances change rapidly, the shock will usually get you to take action to rectify the problem- ex. your house catches fire!  But when the change comes on slowly, people tend to acclimate to the change while they ponder what to do about it.  Sometimes the problem goes away; sometimes you perish with the problem.

Growing any business requires a strategy.  Everything you do needs to be clearly defined, well thought out and focused on specific goals that deliver the results you want.  If this is not your strength or you find that the game has changed so much that you no longer know what to do, don’t ‘wait’ and ‘hope’ for the surroundings to change- initiate the change yourself.

What Are The Benefits Of Doing Things Differently?
Let’s put it in terms that most business owners understand.  Let us say that 2 years ago, your business was pulling in $20,000 per month on average.  However, over the last 18 months, the monthly declines have now put your business at $12,000.  You are losing $8,000 each month. This is actually very common right now.  What would you do or spend to get that $8,000 back?  If you knew your business was capable of doing $20,000 a month and there were similar businesses doing this much, how long would you wait to start working your way back to the level you once had?

You can also make the case that with some business segments going away; you may have new opportunities for growth.  If you think that are opportunities to grow by $10K to $20K per month, would you be willing to get some help from a business growth professional to get there?

It all depends on what you want and what you are willing to put up with if you can’t figure it out on your own.  One of the biggest growth industries today is adult education.  Displaced workers and managers are spending thousands of their own dollars to get more education in ‘hopes’ of landing a job.  Business owners who are struggling now should be doing the same thing to maximize the business investment they have worked so hard to create.

If ’Hope’ and ‘Wait’ are part of your current business strategy, stop and think about what it’s getting you.  Then, take some action and get the help you need.  The investment will do wonders for the equity in your business.

Originally posted 2010-04-20 17:51:45. Republished by Blog Post Promoter

Are you trading time for money?  When you started your business, did you envision a day that your business would support you and run without you doing everything?  Depending on the business you have, you may or may not have considered the need for expansion at some point.  Solo-preneurs abound in every industry and usually have to carry the ball until revenues allow for hiring staff or moving into a bigger facility.  Unfortunately, many people at the solo-preneur level don’t plan their next moves and get stuck in an endless cycle of trading their time for money. 

If you always imaged building a business that was not dependent on ‘you doing it all’, there are a few things to think about now in order to prepare for expansion that supports more business without breaking the bank in increased costs of operation. 

1.                   Get clear about what your dream looks like:  

Unless your business is a temporary strategy for making money until your dream ‘job’ comes along, you need to think about where you want to take it.  Take some time to write out your vision for your business in as much detail as possible. Include the revenue you want, the kind of customers you want to work with, the organization you will need to support it and the rewards you will get to support your personal life for your efforts.  Give your vision to someone who knows you and ask them to critique it and if necessary, refine it. 

At this stage, don’t worry about how you will get there or the things you don’t know how to do to support it.  What’s important is to visualize the end game. If you do, you will strive for what you want.  If you base your vision on what you have and know today, you will most certainly fall short regardless of your effort. 

2.                  Check your mindset about your role in your future vision?

Most of us have a preconceived mental picture of our role in our business. In the beginning, we are the business.  We find the customers, we deliver the service or sell the product and we provide the support in between.  As the business shows signs of growing, our roles will change.  If employees are involved, contractors hired, or systems invested in, are you prepared to delegate more?  Are you willing to share what you know (training others) in order to serve more customers and keep the experience consistent or are you more comfortable keeping your system close to the vest.  In order to expand your business, your mindset will have to go from ‘primary doer’ to ‘owner of what the business provides’.  It’s a subtle difference but it’s absolutely essential to transition from ‘I am the business’ to ‘I own the business’. 

An excellent book that drives this concept home is ‘The E-Myth’ by Michael Gerber.

 3.                  Get real about the commitment required:

Building a business today has been tougher than any time in the past 3 decades.  And while many business owners are staying the course and making their companies work, it takes a level of effort and desire rarely displayed in a job working for someone else.  Giving yourself time to build your business correctly means understanding the financial commitment involved as well as the approach needed to build a sustainable operation.  Get help from people who can help you figure these areas out so your commitment is backed by confidence in your plan.  Many times, a simple business plan can provide the starting point.  Spend additional time projecting your costs and sales so you will be prepared to go the distance.  You will also want to spend time developing a growth strategy for your particular business so you can stay on track and focused.  

Your commitment will be easier to maintain if your vision is meaningful and your support is solid enough to last during the ups and downs of getting to a level of sustainability. 

4.                  Critique your business model for growth potential:

One of the biggest challenges any solo-preneur gets into is creating a business model that is not sustainable.  Think of any service business operated by one person who charges by the hour.  If this person wants to have a $500,000 per year business but charges $50/ hr. (market rate) for their service, there’s not enough time in the day, week or month to get there.  Ask yourself, can my business be duplicated effectively by people I hire so my revenue can grow beyond me?  Can I create other services that don’t rely on an hourly billing? 

If you have no way to replicate your efforts in a manner that’s consistent and affordable so you can take on more clients while ensuring the same, high quality experience, your business model may need an overhaul.  Be sure to consider the cost of hiring and training as well as any investment in equipment or facility necessary as a way to insure your fees will produce a profit that supports your ultimate revenue and profit goals. 

5.                  Set measurable benchmarks for each definable step:

This is where the ‘rubber meets the road’!  Expanding a business should be a planned event, not a solution for an immediate crisis.  I have several very competent, dedicated clients who found themselves with more business than they could service.  Not having a plan to expand their businesses, they simply stopped marketing because they did not want to disappoint new clients.  In all 3 cases, we laid out a set of definable points where new business support would overlap increased revenue and decided what would be done to migrate up to the next level.  Was it hard?  Yes, in a few cases, the risk of committing to a new employee or a larger office was stressful.  But following the plan that was designed to handle this transition is what got them all over the hurdle. 

If you plot out your various revenue streams (areas you repeatedly make money) and project increased revenues compared to the cost of services more customers, you will be able to spot the natural transitions and be prepared for them before they hit. 

6.                  Be willing to invest in yourself and your operation as your business get bigger:

Moving up to a greater level of business performance is one thing; staying there is another.  The most successful businesses today all found a way to automate various parts of their business so they could continue to focus on the future. Remember to automate your systems as well as your processes.  Training new employees can be a huge time drain if you don’t have your process well documented so your new person can quickly produce the same outcome.   

Likewise, invest in systems that will efficiently duplicate rote tasks or allow employees to handle a greater volume of work with minimal errors or disruptions.  If you invest carefully and in line with expected growth benchmarks, the challenges of incorporating new processes into your business’s routine will be much less disruptive. 

Finally, if you plan to growth with your business and take on the role of a business owner who oversees the entire company, look for support for yourself.  After all, planning not to do it all in the future still requires that you know how to get your organization to its final destination.   

More Business Growth Resources:

If you would like more information on various topics having to do with small business growth strategies, tune in to Steve’s weekly Radio Show on BlogTalk Radio- ‘The Small Biz Growth Show’.  Each Tuesday at 11:00am (PST) and Thursday at 1:00pm (PST), Steve and his co-host, Cash Miller, discuss specific business building topics that small business owners can take action on.  http://www.blogtalkradio.com/the-small-biz-growth-show  

If you need help to figure out where your best sources of growth are, sign up for my free business growth guidebook and learn where to look and what to do to improve your revenue, clients and overall health of your business.  http://www.growthsourcecoaching.com/business-growth-strategy-guidebook.html

Originally posted 2011-09-19 12:36:33. Republished by Blog Post Promoter

Getting things done continues to be an overwhelming challenge for most small business owners. Sometimes, the list of tasks seems to be beyond attainable and appears to have no end! It’s not that these things don’t have merit or that someone important is asking you for them, it’s just that there’s not enough time in the day- right?

Tradition Time Management Can be Detrimental to aSmall Business Owner
Time management approaches have been sout after by small business owners for decades. The whole industry reached a ground swell about 20 years ago with the advent of the Franklin planner, the Day Timer and a while host of other systems to capture the focus (and investment) of busines people everywhere. Unfortuneately, none of these systems really changed the small business owner’s ability to make better use of the time they have or get better results from the businesses they own. Why… becasue time management as a concept is an illusion! You only have so much time and it cannot be managed like others things because you can’t stop it, reserve it or allocate it to someone else. It’s the most valuable resource you have and you can’t replace what you lose or make more if you waste it.

What does work is the concept of knowing what you need to spend time on that produces the greatest return in your business. Get really clear about what you should be doing to drive revenue, attract more of your best clients and let others do the things that are not your best fit. Let me explain-

Joseph M. Juran was on to something
There’s a universal concept called the Pareto Principle. You may know it as the 80/20 rule. It was first introduced into business by business management expert- Joseph M. Juran and named after Vilfredo Pareto. Simply put, 80% of all activity, results, accomplishments, etc come from 20% of the source. If you belong to a networking group, chances are that 80% of the work is being done by 20% of the members. In the retail grocery business, 80% of a store’s volume comes from 20% of the item selection. And, in most businesses, 80% of your revenues come from 20% of your clients. Likewise, 80% of your profits come from 20% of your product or service offerings.

Juran observed that Vilfredo Perato’s principle had application in the business world as well. In just about all business situations, you can apply this principle. It’s as dependable as gravity! But what does it mean for using your time better?

It’s About Focusing on Results
In most traditional time management systems, much of the focus goes to managing your schedule. Although priority is given to tasks, the main priciple involves getting more done in a given day or week. Unless the business owner has objectively assessed where their revenue, clients and profits come from, there’s no asurance that the things you schedule are the right things for you to be engaged in. As an example, if book keeping is a low prioity task and something you are not good at, why even spend time on it. The best thing you could do is outsource it.

Look at your business and using the Pareto Principle, write down the activities that will produce 80% of the results that grow your bsuiness. If you missed ‘sales and marketing’, you should rethink your business approach. Sales and marketing are the only activities that generate revenue. Everything else (although important to some degree) is an expense. And when it comes to generating the needed sales and revenue, who will be more committed to acheiving this than you- the owner of the business.

Separate the Important from the Minutia
To get a quick handle on this issue, go back and look at your schedule for the last 2 weeks. If you have no schedule, the problem is obvious. If your schedule has only appointments with other people and there’s lots of open space, it also reveals a lack of focus on the important areas. Now, you might say, “I don’t use my calendar for everything I do”. Herein lies the problem. Read on.

Look at all the things you spent time on and the time you spent and create a list with 2 columns; one for important activities like sales, marketing, management, client visits, etc and the other column for evrything else. You’ll quickly see where most of your time goes and why you may not be getting what you want from your business. If your calendar is not detailed enough for this exercise, spend the next 2 weeks writing down everything you do in 15 minute increments. It sounds tedious, but the learning you’ll get will be a major game changer!

Take Control of The Growth Aspects of Your Buisness
Once you figure out where you spend your time, think about the things you should be focused on to acheive growth in your business. Things like evaluating who your ideal clients are and where they can found; who your best referral partners might be; what networking groups or events you need to attend; developing a compelling referral program for your current clients or creating an ad campaign that drives more traffic to your website. All of these activities lead to reveneue generation and deserve time on your calendar.

If you have employees, think about how to give them direction and let them perform with scheduled check in meetings to monitor performance. Look at things in your bsuiness that others could do (inside or outside your business) and get them off your desk. Ask yourself this question everytime you are faced with doing a task. “Who else could do this?” (and if no one knows how) follow up with “who can I train to do this?”

Whatever type of business you are involved in (solo-preneur, partnership, management, multi-divisonal organization, etc. this approach to using your time to get the most important things done is a ‘life changer’ in terms of how you look at your business the goals you want to reach.

In the end, you’ll be much happier and feel the power of getting vitaul, growth related initiatives accomplished that produce more revenue, good clients and profits for your business.