Have you ever walked into a business and immediately thought “this is a good business”, or “there’s something wrong with this business”? Many years ago when I worked in manufacturing industries I found I could do that.
I’ve been out of manufacturing for a long time, but over the last twenty-eight years I’ve used that instinct across myriads of small businesses. Of course, it doesn’t always happen; maybe I missed something, maybe it was just an average business, doing enough the hang together.
All of which led me to think about what makes a bad business, a bad egg, with the suggestion that the reversal of these things makes a good business.
You know your product or service ticks all the boxes, but you haven’t actually surveyed your customers to get their views. Are you relying on verbal asides, but haven’t captured them? Now I’m not looking for statistical certainty here, but rather collecting sufficient views to give a picture, or suggest a trend.
When doing business plans, I always do a customer/client survey to find out how they perceive the business, and its offering. Your opinion may not be the best one, and the response often surprises my client, and provides a valuable input into the planning workshop.
In “Ready, Fire, Aim” Michael Masterson advocates getting your product into the market place as early as possible, and then continually tweaking it in response to customer feedback – “release your product early, and release it often!” Then it will start to tick the boxes.
You are Chief Cook, and Bottlewasher! In other words, are you trying to do everything yourself; manager, marketer, operator, bookkeeper. If you are, have you the time to do it all properly? That leads to late nights and working weekends; not good for the family, or yourself. It leads to stress. And are your skills appropriate for all these roles?
The other side of this coin I have discussed several times (You may have been caught in this trap?), (How do you get your business working for you?), (Are you really in Business?) – not having the time to work ON the business.
The point is you can’t do everything yourself. You need a good team, one that can keep the business running well if you have to take a business trip, or even that well-earned holiday. That doesn’t mean employing a lot of people. Yes, you will need more employees as you grow, but are there tasks which can be sub-contracted, outsourced, or even off-shored (More Disruption, but more helpful).
You don’t stand out in the market - How often have I been told that “that’s not the way we do things in this industry?” If you are not different, how will you stand out from the crowd? You can always stand out by being very bad at what you do, but there is little value for the customer in that, and even less for you. Do one thing really well – become the GO-TO business in your market.
Part of that positioning is your pricing. Undercharging is not sustainable. There is always a market for a product or service that provides higher value to the customer, and a higher margin for you. Constant testing and tweaking as I suggest above will help you find that value point. Compete on quality, expertise and what you do really well, instead of price.
Is customer service an afterthought – I’m sure you’ve been in a situation where you have said “I’ll never go back there again”. I know good customer service is a cliché, but businesses that really look after their customers do well. Appreciate loyal customers who show you there is a demand for what you do. There is no dollar amount you can put on brand advocates. Good will translates to loyal customers.
People don’t leave companies — they leave management. This lesson goes for both employees and customers. A manager will lose staff if the employees think they’re not being listened to or valued. Customers will stop using your products or services if they are dissatisfied with them. The quality and reliability of your products and services is a reflection of management.
One of signals I pick up for good and bad businesses is the demeanour of employees. It doesn’t matter whether they are shop-floor or office. If they look cheerful and happy then there is a good chance the business is being managed well, and if managed well, it will be a good business.
Presentation of your business matters. If it is well presented, neat and tidy, then again it is likely is well managed. This also connects back to the staff. Happy staff are unlikely to allow their workplace to be a mess. This applies to the building, to the shop-floor, to the offices, to vehicles, and to how staff are presented.
When clients approach me for coaching, I find they are almost always a business with a problem, a problem that if not fixed, will see them go out of business.
They usually have “business”, although frequently not enough, but often it is the wrong business, less than profitable business.
Often they lack a management mindset, and lack control over their business. Eight times out of ten that lack of control comes down to a lack of knowledge of what is happening in the business.
For more than 28 years I’ve been helping small business owners plug the profit leaks in their business and restoring their cash flows by assisting them understand the information they need to have control over their business, how to manage and analyse it, and how to answer that critical question – WHY IS IT SO?
If you would like to discuss with me how you might do that, book a Strategy Consult here. http://www.profitsleakdetective.com/fast-track-to-cash-consult
© Copyright 2016 Adam Gordon, The Profits Leak Detective
Some profit losses are pretty obvious - so you fix them.
BUT, what if you don't know profits are leaking, cash out the door?
Possible leaks could be anywhere.
Are there some clues or symptoms that are tell-tales?