Tomorrow starts a brand new financial year – the perfect time to conduct a business health check to make sure you’re headed in the right direction for the new financial year and beyond.
You can conduct a 3 minute health check on our website and receive valuable insight into areas where your business might need improvement.
However, I'd like you to think more deeply about the fundamentals of your business - what we call The Six Pillars To Exceptional Growth.
These are the nuts-and-bolts basics without which no business can succeed over the long term. If you don’t have confidence and clarity around each of these pillars, your business will collapse sooner or later – most likely sooner. It’s about predictability for long-term profitability.
This is the foundation premise for your business. Get brilliant at the basics. It’s about mastery.
You have to be brutally honest with yourself when you rate yourself in each of these areas:
Exactly what are you going to do and how do you set it up so it becomes sustainable and systematised? How will you serve your clients? How will they buy from you and how do you deliver?
Think about your marketing and your finance, terms of trade, administration and your customer service in general.
What about your team development and recruiting? This is where all elements of your business must be predictable and easy to follow. Even businesses that have been operating for many years don’t necessarily have the best operations in place.
Every time you grow so do your operations. You must be preparing for future growth. Operations are ongoing. What are the key things you do in this area?
Like sport, business has a scoreboard and you must understand it if you are going to win. That scoreboard is finance. You want brutal honesty about how your business is going? Look at your figures.
You can talk big to your friends and you can tell your clients you’ve made $7 million so far this year, but your figures don’t lie. They are the final scoreboard on all the decisions you’ve made in your business.
If your figures are strong you’ve made good decisions, if not you haven’t. It’s that simple.
The three key scoreboards you need to thoroughly understand – in no particular order – are profit and loss, the balance sheet and the cashflow forecast.
If you don’t continuously look at these and understand finance – which is the language of business – you are in trouble. Business is an intellectual sport. This tells you if you are winning or losing.
How are you running your business if you don’t speak this language? Imagine a pilot who walks into the cockpit and says, ‘Look at all these dials!’ Do you look at finance and say, ‘What the hell is this?’
If so, this needs to be right at the top of your list of problems to remedy. You need to know your break even, gross profit, cost centres as a percentage, and the balance sheet – this is the most important scoreboard of all.
It tells you the truth – the cold hard truth – about every decision you have made in your business to date. From day 1.
Not many people understand that. It’s a mirror. Look into it.
For your marketing to get results you must intimately understand three specific areas: your unique selling proposition (USP), your emotional selling proposition (ESP) (connecting with your current and future clients) and your community selling proposition (CSP), for which you are building a reputation from many of your customers and advocates who are confirming and saying, ‘Yes, the product and service you need are here, and they give you just a little bit more’. (Make sure this is just a little bit more, not a lot more. If you are too generous with a client because business is quiet you have set a standard that you can’t hope to maintain, and you’ll inevitably disappoint this client in the future.)
Marketing is 24/7. It’s ongoing. It happens looooong before the first sale and waaaaaay after the latest one. You can see how this works in the diagram below. If you build your USP this will help you build your ESP, which will lead to a growth in your CSP, and this provides validation for your USP which allows you to build on it further, which leads to…and on it goes. How’s that for a virtuous cycle?
If you have generated attention and interest via marketing, now you need a call to action. You need to make it easy to buy from you with a process of multiple steps, so that when people knock on your door you lead them through the process. Remember, your competitors are lurking just around the corner waiting to snap up customers if you make things difficult.
Sales is the only activity that actually puts money into your business. Everything else takes it out. It is fundamentally important to grow this.
5. Customer Loyalty
After you’ve closed the sale, it’s about keeping them – for life. Make them advocates and raving fans. Customer loyalty is when people will not leave you just because something is cheaper or fancier or newer elsewhere – they truly belong to you. You should be building this because it’s cheaper to keep a customer than it is to find a new one. You need to keep being relevant and valuable.
Team is last because at this point you are growing with people on your team who are better than you. You are growing them for the long term. They are involved and included and as interested in the success of your business as you are. You are leading and they are following.
I’ve broken these pillars into three clusters. This is the structural approach to your business. It gets you thinking a little bit further than survival and just putting money in the bank today. If you can design it well before you execute, you have a much better chance of identifying problems as they arise and ultimately reaching your goals.
The first cluster – operations and finance – is part of managing the businessflow of your business.
- Do you have a clear understanding of the basics of finance and the numbers?
- How are you going to execute to achieve your goal of predictable workflow and predictable profit?
- How are you designing your business for the mid and long term, so that you have something to reference?
Whether you are running a fish and chip shop or a $500 million company you must be on top of these aspects of your business. You must create a systemised, process-driven business. They are key considerations in how you get things done every day.
The next two – marketing and sales – are part of your lead-flow process; how you attract and secure customers.
And your customer loyalty and team are related to your cashflow; how you keep your customers coming back so that the cash register keeps ringing. At some point there will need to be a team that does this just as well – if not better – than you do.
Getting these flows right is crucial to creating predictable profits in your business.
Think about the Acropolis in Greece. It was built on solid foundations for the long term. It has survived wars, erosion, changes in the environment, extremes of weather. It was built for sustainability. Your business must be the same. If you do it right your business will be around a long time after you are gone, just like the Acropolis. So don’t be satisfied with the same old attitude; aim to be exceptional and sustainable.
These are the six fundamental pillars you must get right in order to grow.
Know what the cut of your business is going to be and work towards it with confidence and clarity, and you will be set up for success for the new financial year, and for many years to come.
If you're lacking in any of the 6 Pillars, attend our Free 2-Hour Business Breakthrough Workshop
We offer a free 2-hour 'Business Breakthrough Workshop' for business owners (with turnover above $1 million).
In the workshop, you will conduct a full, brutally honest review of your business. You’ll assess what’s holding your business back to help you make positive changes – ones that yield immediate results.
You’ll walk away with powerful advice for achieving future business growth, and have the opportunity to ask questions and interact with our business coaches.
If you'd like to attend, register your interest by filling out the form here.
Stefan Kazakis on 5 May 2018
Responding to change is a critical part of the culture and operations of the business. You, your team and your business must be agile and flexible. ...Read more