Business Suicide Strategy #3 – Not Using All 3 ‘Business Multipliers’

How many ways do you think there are to grow a business? You may be surprised to learn there are just 3 ways. Each one of these is what I call a ‘Business Multiplier’. You must use all 3 Multipliers to successfully grow your business. If you do, I guarantee your business will reach or at least get very close to, its potential very quickly even in this recessionary economy.

It is my estimation that no matter how young or old or successful (or not) your business is, you are only using one or possibly 2 of these Business Multipliers (and the ones you’re using could be improved significantly).

Multiplier #1 is Lead Generation – which requires getting more qualified leads.

Multiplier #2 is Sales Conversion – which requires generating more customers from your leads.

Multiplier #3 is Customer Maximization – which includes increasing the average sales value; increasing the number of purchases; obtaining more referrals from your customers; and finally reducing customer losses.

There are numerous proven strategies you can apply to massively improve each of these 3 Business Multipliers, and combining the power of each Multiplier you have the ability to grow your business to heights you never thought possible. Change is extraordinary difficult for most people but only through the use of the Business Multiplier can your business grow, even in the worst economy, because you take calculated risks. It is a matter of choosing for each Multiplier (depending on your business), the implementation of a well thought out plan.

The execution of business strategies is where most businesses get stuck. In particular, small businesses fail to act typically not by conscious choice, but instead by being so busy and overwhelmed by the annoying daily tasks that they work IN the business instead of ON the business. Then the undeniable result is that the big picture is lost.

Small businesses now need a surge of energy and renewed passion. Ask yourself this question, “Why did I go into business in the first place?” Reclaim and perhaps redefine your passion so it can carry you through these turbulent market changes. You must stay focused.

It has never been more important than now to correctly optimize each Business Multiplier so you get the greatest return for the least amount of money spent. Of course the skill is choosing the correct strategies and then creating them so they generate windfalls of cash for your business. Small businesses must get out of overwhelm. Turn off the TV and all the “Money Shows” giving allegedly sound economic advice. To compare this economy to the “Great Depression” is a person who has not done their homework. (That will be the subject of another article explaining how this economy is not like the “Great Depression”.)

Simply put we are facing ‘TV ratings war’ who can score the most viewers. Do not fall victim to that pattern of behavior because it leads to true paralysis in your business. TV viewing has been declining and what better way to get you to stay glued to your TV then to scare you! That being said I am suggesting to be informed, but do not operate in fear, instead make wise cost-effective choices.

That’s where business development strategists help (a fresh pair of eyes looking at the business) can make all the difference. What is demanded in today’s economy is for business advisors to immediately put in place a number of strategies that all work in harmony within each Business Multiplier.

Build a Business Plan – Are You Building Your Business Blindly?

It has been said that there are two types of business entrepreneurs: Those that plan and those that fail. So do you really need a business plan? If you’re in business to succeed, YOU BET! Even having a simple business plan gives your business a road map to achieving your goals. It gives you a daily, weekly, monthly, and yearly synopsis of your business by keeping track of client activities, your expenses, and your income. Putting your plans in writing validates your business, provides insight and clarity, helps with the tracking of you business success by monitoring the activities, processes, and goals you’ve planned for yourself.

There are 5 basic reasons why you’ll want to prepare a business plan whether you are a start up or have been running a business without one:

1. Stay On Track. Having a business plan allows you to break down your goals and realize the validity of them. Your plan will accurately predict the number of prospects you need to interact with weekly, to determine how many prospects will then need to be converted to clients monthly, giving you a visual of the amount of activity that is needed to meet your sales goal. Your plan will also help you understand the value of each client, how much each client (on average) costs you to acquire and how much ROI they bring in. Example: if you are a retailer, how many customers need to walk though the door to reach the sales goal for the day? Do you average every fifth customer buys something, so that five customers walking in equals one sale? Your business plan will help you spell out these specifics and plan accordingly.

2. Bring Clarity to your goals. Define your goals and be very specific. Set your goals for 1 year out, and then go further to 5 and 10 years out. Be flexible and willing to adjust as you go. If you are a small business, your business plan should include your personal and family aspirations as well as those of the business. Because most small businesses are a family affair, you’ll want to align your personal goals and values with that of your business. It’s important that as a business owner, you don’t forget you have a life outside of business. Therefore, by aligning personal goals with your business goals, the less likely you’ll suffer from burn out and it will keep you from missed opportunities of a fulfilled life.

3. Keeping priorities in order. Your business plan should include an activity schedule, much like you may already use in planning your daily schedule. The activity schedule in your business plan, however, will help you streamline your activities; help you to manage your time more efficiently and effectively. It will help hold you accountable to timelines and schedules that are vital to business growth.

4. Know your budget. The main segment of your business plan is the budget. Once you have clarity on your goals and priorities, you will need to know what is available to you, when, and for what activity. The danger of not having a budget is that you run the risk of quickly moving though the funds available to you keep your business operational.

5. Keep track of clients. Use a Contact Management System, in other words a database, to keep track of your clients, manage their wants and needs, and when and what they last purchased from you. This data will help create a well-organized marketing plan, help with forecasting, and give you tremendous market research as you continually work to build a relationship with your clients.

Having a business plan enables you to ask very pertinent questions about yourself, your business and the business environment (your marketplace) that you are currently in. It helps you to identify all the potential risks your business can face – the “What if’s”. By identifying a business strategy ahead of time, the easier it will be to understand your direction, your budgets, schedules, and how to market to your target audience.

Does Macro Economics Really Affect Small and Medium Sized Businesses, Say the Size of National Debt?

CHANCELLOR Alistair Darling has ramped up the national debt (to £700+bn to prevent the country slipping further sliding into a long, deep recession. In his pre-Budget report (Mon 24 Nov 08), billed as the most important in a generation, Mr. Darling gave some brief reasons and details of action in the hope to maintain employment, and inject cash into the UK economy. One tactic was Darling’s 2.5% cut to VAT from December 1 until 1 Jan 2010 to encourage consumer spending, at an estimated cost to the UK Government of £12.5bn. He focused on a capital spending programme on major (construction) projects to renovate the country’s infrastructure (motorways?). There was a modest move at the time in a positive direction by the financial markets – the FTSE 100 Index rose 80 points (to 4130).

However the Chancellor’s bombshell was that UK’s debt as proportion of GDP will rise from 41% to a high of 57% in 2013. Darling argued it was essential to “act now” and he was willing to do “whatever it takes”. He may be right. But…”What price will SMEs pay for this move in 10 or 20 years time?” Darling was reported saying that he wanted “to take fair and responsible steps to support business while putting the public finances on the right path for the future.” Small and Medium Sized businesses (SMEs), make up 99% of all UK businesses. How have SMEs been supported by the Government’s action? Consumers have arguably had a little more spare change in their pockets, but this ends 1 Jan 10. SMEs act as low cost tax collectors for the Treasury. Why couldn’t an additional 2.5% have gone to help SMEs for the work of collecting, reporting and paying the taxes, as a further measure to the 2.5% given temporarily to consumers. That would be real support for real difficulties i.e. help with the burden of bureaucracy. In a global downturn businesses need expert advice and assistance to

  • acquire new customers,
  • further drive down costs, and
  • deliver new products and services.

Success is not a lottery, but the result of hard work, and implementing a good plan. Where can one find a good plan in these challenging times? If lost, see direction. A professional business advisor is worth their weight in gold in good times and bad. Regional Development Agencies keep registers of business support professionals or you can try new services online like Business Support Finder. A common example of a problem in a downturn is a problem with the bank. The relationship with a bank especially if liquidity is a problem and the business is reliant on bank borrowing for at least some of its working capital. A business adviser can create a ‘way out’ based on the businesses’ opportunities and core competencies. Banks are less likely to behave badly if they see a professional ‘outsider’ involved in the business. Keeping the bank informed is key.

What you tell them, and how, is what a good business adviser should be skilled at. They should know what the best approach with your bank should be. Raising fresh capital finance may be a necessity. Some finance could free the business from uncompetitive contracts or banking facilities. Transforming a bank relationship, or supporting a business to secure better terms in a refinancing package are just one or two examples of how getting ‘experts’ to help, and keeping them in your corner for when you need them, can really transform your business performance. The best place to begin outsourcing business support is to involve a Business Mentor. Some business owners use family members, but this is often a bad idea, since the family member may be good at his business but not at yours, or managing his staff but not directing you. It is always better to involve a professional, experienced at providing high quality support from outside the business. Julian Rowe, Business Correspondent, Business Service Finder.