How To Manage Business Growth: 6 Steps Strategy

Transcript:

People ask me all the time what are the steps to growing the business effectively. Well, what if I told you that here with our clients in ActionCOACH we have six clearly defined steps that when you implement them, will actually allow your business to grow and flourish all the way from that early beginning stages of chaos through to a business that you can sell, duplicate or have as a passive income. And it’s not hard to do. In this video, I’m going to take you through each of those six steps are and the advancement criteria to go from one level to the next. Stay tuned!

Hi, this is Jody Ann Johnson with ActionCOACH business coaching, where we help small business owners to grow their business, free up their time, make more money and have choice about what opportunities they want to pursue. First, I’m going to take you through an overview of the six steps: at the base level we call mastery. What gets covered is what is the direction you want to take your business. What is your five year objective or plan, your purpose and what is it that you want to achieve in your life. Then we go and we look at the money, because we need to know what is breakeven. What is your acquisition costs. What are the things that you need to know about the finances of your business. Then we look at your team, what are the basics of the team. Do they have job descriptions that are clearly spelled out, tasks that they’re accountable for. And how are you going to measure them in terms of their effectiveness at that role. And then we look at time – we look at what are the places where time in terms of productivity leak out of your company then we look at the distribution and delivery of your products and services. At that basic mastery level, those are the four areas that get covered.

Now here’s an interesting fact: it can take a business anywhere from six months to two years to cover that when you’re working with us, and most businesses will never make it out of that level of clarity or lack of clarity in their business to advance to the to the next level. As a matter of fact, the statistics are only about 8 percent of businesses will make it out of that level. To advance to the next level that we call niche, you must have an annual operating plan and budget forecast. The next step is niche. Niche in our world is that you have no price competition and that you can actually plan predictably what your cashflow is going to be. And you do that through what many of you have seen is the five ways: having clarity around, what are the number of leads that I need, what’s the conversion rate in order to get a new customer, how many transactions can I do with that customer or that referral source and what is my average dollar sale that gives me the revenues of my business. And from there looking at the margins, which ultimately leads to your bottom line net profit. When there’s clarity around that, then you can make predictable cash flow pattern for growth and scaling.

Now when I go into see prospects, many times they’ll say I want more customers or I want more sales. They almost never say I want more profits, and only once in 13 years have I heard somebody say I want more cash, which is really why we’re all in business: we can actually make the cash to be at choice, right? So the magic of the formula is not what happened. Because my background was in emergency nursing, I call that what happened the autopsy of your business. That’s what happened in the past. The magic of that formula is actually looking at if this is the cash I want, this is what my profit needs to be. This is what my margins need to be. This is what my sales need to be. This is what my average dollar sale needs to be. This is how many transactions I need to get. How many new customers at that conversion rate, how many people do I need to talk to every single week in order to reach my goals and objectives.

With that level of clarity, you can build scalability into your business. To advance from niche to the next level of leverage, requires having an annual marketing plan and budget. And at the leverage stage we’re looking at systems. Now, of course you’re going to put some systems in at the mastery level, you’re going to put in the systems of your financial reporting, and having job descriptions and such, but at the level of leverage what we’re looking at is that we’ve systemized this business, so that when you bring in new team members, they can come in as an asset.

When I was working in the emergency department and managing the night shift, we had policy and procedure manuals. Now, this might make you laugh, but what I would do is I would go in, particularly when I was brand new, and I would take every single one of those manuals – and they were big, there were like 7 of them – and I would lay them out on the counter at the nursing station desk, and I’d have them open to the things that we were typically dealing with in the E.R. And anytime something came up that I didn’t know exactly how to do, or my team didn’t know exactly what to do, I would go and I would flip through that manual of policies and procedures and follow that step by step pathway. And that allowed me to do ninety nine point ninety nine percent of what was needed in order to be able to have a successful outcome. If my team came to me rather than me going and doing it for them, I would say: hey, have you looked at the policy and procedure manual and worked through how to get it done for yourself? And if they had, then I would go help them if they were unclear. But if they hadn’t, I’d always send them to the policy and procedure manual, so that they learned how to be independent. People are only an asset when they can think independently, and that requires that you’ve systemized your business. To go from niche into leverage, only about 5 percent of business actually really have their company set up in such a way that they can have people come in and be an asset.

The next-level of the six steps is having the team. And this is making sure that you have the right people in the right seats, doing the right thing at the right time, for the right reason. Unfortunately, in business many times as the company grows we can outgrow our team members, particularly if they’re not learning the way we’re learning and the way that the industry and the marketplace is changing. So it could be that even though we have someone on the team that has been with us for a while, I often see people substitute loyalty for performance. So invest in your team if you want to keep those key team members, or you really have a lot of respect because they’re a good culture fit, but just make sure that they’re out there doing the learning they need to do, so they grow with you. Bill Gates is quoted as saying the most painful thing in business is outgrowing your team, because we want to reward the people that have been with us along the way, but only if they’re going to continue to be an asset in the business.

The next level up is synergy, and synergy is where we turn up the volume and we scale the business. Unfortunately, I often see people go and open a second location or expand their business before they put these pieces in place. And then the infrastructure falls, because they don’t have the systems or they don’t have clarity about how they’re going to scale the business, or the marketing hasn’t been worked out. Then they’re there when the volume goes up high, and it’s like, boom! The worst thing about it is that you lose your reputation in the process, so people don’t want to come and try you again because for whatever reason they weren’t taken care of the way that you would’ve been committed to taking care of them, if you had those infrastructure, people, resources in place. So when you turn up the volume, get to see where the cracks are, and we turn the volume up slowly, so that you can see where the cracks are and then go back and fix the base that you’re operating from.

And then the final sixth step is what we call results – and this is where you’re free to sell your business. Everybody is talking these days about I want to sell my business in three years, I want to sell my business in five years, and I want to sell it for a billion dollars. All fine and well and good, but what I’m really looking for is for people to be at choice – if you want to sell your business, that is set up and structured for you to get the best multiple, because you’re taking care of these steps along the way. Or duplicate the business or have a passive income stream. In our business what we’re looking to do is create an employee owned company that allows them to have a stake and a say in how things are going to go. That’s our plan for the future.

So here you have the six steps. If you would like a copy of our six steps, I know that most people will not be able to do that on their own, but if you’re one of the very few people who could take this checklist and go through them and make it happen, God bless you, you’re welcome to have it. And if you need help with it, then please reach out to us at actioncoachteamsage.com or call me on 305-984-2414 and I’ll be happy to talk with you.

Thank you for watching. If you got value from this video, please like it and share it with anybody that you believe would get benefit from watching it as well. Thank you.

 

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