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Posts Tagged ‘Growing Your Business’

The Myth of the Ever-Growing Small Business

takeabreak1Small business owners can have a bit of a one-track mind: gotta grow, gotta grow, gotta grow. I was meeting with a client the other day, tweaking her sales formula and updating her scheduling process. She has been on a rampage growing her business and told me about all the work she had scheduled for the summer. There was something in her voice…she sounded a bit wistful. So when she asked me, “What’s next? What do I do next?” I said, “Maybe rest.” Her reaction astounded me.

The relief was apparent on her face, and she said, “You mean I can take a break? I don’t have to always be growing and expanding?” She, like so many small, growing businesses run by energetic owners, thought that business growth needed to be at a constant incline – up, up, up. I drew an incline with a short plateau, and then an incline again. I explained that growing a business is much like physical training; intervals of hard training interspersed with short rest periods, allowing the body and mind to rejuvenate and to be restored. Growing a business takes energy – mentally, emotionally, and spiritually – and your energy stores need to be filled.

Scheduling a slow-down doesn’t necessarily mean coming to a complete stop. Here are some examples of how clients have used intentional slow-down periods:

  • Update a customer service delivery system
  • Step up the service to existing clients
  • Write
  • Creating a new service offering
  • Fun, even playful, networking events

Is it time for you to plan a slow-down? If you’re tired or envy those who tell you about their summer plans, consider how you could benefit from slowing down a bit. Understand the potential consequences of not slowing down, and build a safety net if necessary. Define an end-point so that your business slow-down doesn’t become a business melt-down. Then, go float in a river, hike a mountain, or just read a beach book.

Follow the Yellow Brick Road: How to Determine the Shortest Path to Revenue

yellowbrickroadThere is an awful lot to get done in the early stages of a business: there’s the product or service development, your online presence, customer definition, marketing message, videos, blogs, networking, and the building of your business systems. And, oh yeah, eventually you actually need to sell something. It’s easy to get bogged down and we sometimes forget that what we really need to do is generate revenue. I love clean systems and on-point marketing, but there are times you just need to ask:

What’s my shortest path to revenue?

My clients know that I like to cut to the chase and get right to the core, and this is never more true than when a business needs or wants more revenue. I once chose to work for a company that was close to bankruptcy because I wanted to see if I could help turn it around. They had some pretty cool products in development, and when I asked about how we would cover expenses in the next few months, I heard a lot of “well, if this happens….” Or “when we figure out this issue….” I don’t think I was making friends in those early days, because I would say “that sounds great, but what do we have to sell tomorrow?” “Which customers are most likely to want what we have right now?”

Being short on revenue is one of the most frustrating stages of business ownership and owners often feel powerless: that there’s nothing else they can do. We have to cut to the chase and ask key questions:

  • What’s the shortest path to revenue?

 

  • Is there a shortcut to revenue (without shortchanging service or quality) we can take?

 

  • What steps can we bypass to get straight to revenue? Perhaps eventually we will add additional features or build out the missing elements, but when it’s crunch time you need to take the shortest line between where you are and what will produce revenue.

 

  • The objection I usually hear is that it’s not ideal, it’s not what was planned. Taking a shorter path does not tie us to that path for ever, it’s just a path we choose for a period of time.

Keep building new products and services, keep filling your pipeline, but by determining the quickest path to revenue can keep you afloat while your are building your business, making changes, and growing your customer base.

3 Reasons You’re Afraid to Ask for Referrals – and What You Can Do to Get Over It

We all know that personal referrals are one of the best ways to grow our small business; new customers that come by the way of a referral become customers more quickly and stay with us longer than others. Satisfied customers appreciate our company values, we’ve reached them on a level deeper than a product at a price. When those same satisfied customers refer their friends and colleagues to us, chances are that those friends and colleagues also appreciate those values. They become happy, ideal customers and the referral cycle continues. So why aren’t you asking for referrals? Here are the top three reasons small business owners don’t ask for referrals and what you can do to start asking today.

  1. Fear of rejection. I get it, it’s scary to ask someone to recommend you. We fear that our customer will say no, but think about it; if they don’t want to refer you, they just won’t do it – they won’t actually say no to you! If you sense some hesitation on their part, that’s a great opportunity to correct a misunderstanding or dissatisfaction they may have had with you in the past. Your effort to resolve some old issue for them, or just to listen about it, will win them over and they just may become raving fans.
  2. You don’t know how to ask. Take 30 minutes to create several  scripts you and your staff can loosely follow, and that you are comfortable with. When you’re comfortable asking, you will come across more confident and natural, and the request more likely to be received well. Worry less about what the “experts” say about how to do it, and ask in a manner that works for you.
  3. You may have tried to ask following a well-intentioned marketing seminar, but lacked the follow-through. What you need is a system, an easily repeated step-by-step system. The best systems are well-defined and automatic. Consider these:
    1. Have your Google+ review link printed on your invoice. This is fairly passive, but may be a “safe” first step for you.
    2. Follow-up transactions or at regular intervals with an automated email satisfaction and review request (there are some slick systems out there that point happy customers to your review page, while less than happy customers generate an email to you. Let me know if you’re interested in learning more and I can point you to some business partners who can create this for you).
    3. If you’re interested in a more low-tech option, define who will ask for referrals and at exactly what point in the customer interaction. Once you’ve defined the “right” words (see #2), you and your staff all need to know where responsibility lays for asking. Walk through this process in a staff meeting, as a multi-step process may be best.
    4. Best bet: do all three!
    5. You haven’t figured out what the referral reward ought to be. Don’t let this hold you up! Think about the last referral you gave and why you gave it. I doubt it was for the Starbucks coupon; it was more likely because somebody asked or reminded you, or because you wanted to help a friend. Humans give referrals because we like to help.

 

This is an EXCELLENT example of a referral program - it's easy for your customer, and offers them a tangible, useful reward.

This is an EXCELLENT example of a referral program – it’s easy for your customer, and offers them a tangible, useful reward.

A well-defined referral system drastically increases the number of referrals, as long as you are (reasonably) comfortable with the actual request. Invest 30 minutes to define your system, and be on the lookout for new ideal customers coming through your door!

Increase Profit Without Increasing Business

Do you know which products or services are profitable and increase profit?  Or, equally important, do you know which ones are costing you money?

Chances are you offer multiple product or service lines, and you probably know how much revenue each brings in (if you don’t, let’s figure that out first). Do you know which ones are the most profitable?  Offering products and services that contain a healthy margin is essential to any business.  Here is how to get started analyzing your current offerings and how to decide if a future offering will make the (financial) cut.

Step 1. Determine the Purpose:  Deciding to offer a new product or service ought to begin with the basic question: what is the purpose of adding this product or service? The answer might be to make money, but stop and think about it for a minute; other valid reasons may be to increase sales of another product or service or to satisfy your customers and clients by making their lives easier, which increases their loyalty to you. You may want to be the “one stop shop” for your customers in your field; recognize that, and define your products and services with that vision in mind.

increse profitStep 2.  Support your Goals:  Once you are clear about your goals, it’s time to learn which product and service are meeting those goals. I once interviewed a large department store that’s policy was to only enter a new product line if the depth of that department could stand as an independent store in a mall. Can your products or services survive on their own, or do they rely on other products or services to survive? Let’s walk through an example:

Business: hair salon
Services Offered: hair styling, massage, and nail care.
Products Offered: hair and body care products.

Step 3.  Allocate Costs:  Each product or service should be recorded as a separate line item within the bigger category. For example: hair coloring would be a line item within hair styling and shampoo sales would be a line item within hair products, (which is within hair and body products).

Costs associated with each product or service should be recorded individually, within the bigger category: payroll for hair stylists is a cost of offering hair coloring as are the associated products.

Step 4.  Determine Profit:  To determine the true profit from each product or service line, allocate incremental overhead to each. True cost accounting would tell you to allocate a portion of all overhead costs; I think you get a clearer picture by only considering incremental costs.

Step 5.  Review and Act:  Review your stated goal for each; which products or services are not meeting your goal, which ones increase profit? Chances are you have products or services that are not meeting your stated objectives. Take a closer look to see where you can make adjustments. If you can’t, and your goal stands, it may be time to cut the product or service line loose. If you do, you just may be surprised by how much time and energy you save without losing any profit.

Employee Benefits that your Team Really Wants

Understanding what employees want in benefits can seem like shooting at a moving target; there are more studies and surveys than there are potential employee benefits. These studies have a lot of great information in them but there’s a catch: they didn’t ask your employees. The only way to find out what is most important to your employees is to ask.

SurveyMonkey.com is simple and anonymous for employees to use. The free version allows you to ask up to ten questions with a variety of question formats. If you have few employees, try having an open dialog with employees to prompt in-depth answers; consider asking employees to give you their thoughts in a more free-flowing format. This style is best for discovering benefits that don’t come off the shelf.emlployee benefits

Stop and think about what employees really want, with or without a survey; it comes down to the basic wants that all humans desire – control, to make an impact, and appreciation.

  • Control. Employees want to be in control of their schedule, when they work, where they work, and how and when they can take time off. Open communication allows you to both achieve what you want.

Employees also want to be in control of their approach. This can be a tough one for entrepreneurs to swallow since there is a control-freak lurking somewhere in us. If you hire up (Read more about hiring up: http://avisionofyourown.com/tag/managing-employees-small-business/page/3/), you have hired an expert, someone more skilled at their job than you could be. Why would you try to control how this hired expert completes their tasks? If you’re still skeptical, create a safety net by asking for drafts, agreeing on a timeline, or having the employee explain their approach first. Do this a couple of times, then let them do the job you hired them for.

  • To make an impact. Humans like to contribute, to give, to know that they make a difference. While we generally think of this in philanthropic terms, it’s true in all aspects of our lives including our working lives. Allow your employees to contribute, to use their talents, to feel valuable.
  • Appreciation. Let your team know that you appreciate them; be specific, timely, and usually, do it in public. It can be as simple as a heartfelt thank-you or a handwritten note with tickets to a show or dinner. If you ever received a handwritten note from a boss, I bet you saved it for a long time and may even still have it. Give that same gift to a well-deserving staff member.

Talk to your employees about what is most important to them through a survey, an impromptu conversation, or a scheduled quarterly/semi-annual review. Incorporate these basic human wants – (control, to make an impact, and appreciation) into your organization – and not only will your employees notice, but they will appreciate you more and be motivated to work harder. Happy employees means happy customers, an attractive bottom line, and a less stressful personal life.

Helen Dutton, A Vision of Your Own, has provided business and personal coaching for small business owners since 2000, providing online and face to face coaching for entrepreneurs, small business owners, start-up businesses as well as established businesses across the country. Clients come from New Hampshire, her home state, but she has also acted as a mentor to business owners in Atlanta, Chicago, Los Angeles, the Denver area, and closer to home in the Boston area. Helen helps her clients develop their small business ideas, create marketing plans, improve operation efficiency, build customer service systems, build management and leadership skills, and develop confidence as a business owner. Helen provides business tips and resources through her blog and her newsletter, where you can also find business templates to help your business prosper.