Category Archives for Tips

Watch your 7 Key Numbers

Category:  Controlling > Organizing

Business owners have been trained to pay attention to our numbers. However, we spend too much time on the wrong numbers – the ones that tell us what happened (accounting) rather that the ones that tell us how to make our business stronger.

7 Key NumbersThe 7 Key Numbers you should watch every day – the ones that will result in consistent and predictable cash flow – are:

  1. New leads coming into your business
  2. Conversion rate – % of leads that become sales
  3. Customer Retention Rate
  4. Number of Transactions Per Customer (repeat; referrals)
  5. Average Price Per Transaction
  6. Variable Costs
  7. Fixed Costs

Implications:
Managing using traditional accounting puts you weeks or months behind the curve. Managing with these numbers gives you the tools to plan, organize and grow to plan and allows you to be proactive and steer your business to avoid obstacles, not just react to problems.

Solution:
If you don’t know these numbers already, start now to discover your 7 Key Numbers. With them you’ll be able to see within minutes each day where your business needs attention to achieve your growth, revenue and cash flow goals.
 

EVERYONE is in SALES!

Everyone (and Everything) in Your Company is in Sales

Category:  Marketing & Sales > Organizing

sales_funnel_four_stage_customers_400_clr_2825Goal oriented companies understand the value of each “touch” of a potential customer. To that end, they focus much of their efforts on conveying the importance of who they are and what they do to everyone associated with the organization.

Each employee understands their role in the business, and like all businesses, one of the primary goals is sales. The secretary is in sales. The IT person is in sales. Anyone who answers a phone or walks past the conference while the client is in a meeting is in sales. Even your vendors and suppliers are part of your sales team. That’s because you never know what minor detail will make a potential client’s day-or make him find another business partner.

Implications:
Customers and prospects that visit your company may walk away with an impression that you never intended to give them. If you have not impressed upon everyone in your company the importance of a sales image at all points in the day, you are risking the reputation of your company.

Solution:
Tour your office and see things from the client’s point of view. That messy desk? That’s in sales. That dirty bathroom? That’s in sales, too. Your job is to make sure that your company is being properly represented in every possible aspect, and that everyone in your organization knows the importance of their role in attracting and retaining clients. This will directly impact your customers’ impression of your company; it could make or break a sale to a new client, or it could dissuade or encourage your existing clients to continue buying from you.

Plan for the Cycles of Your Industry

CyclesConstruction can be a very cyclical business. Successful companies understand that the economy is fickle, at best. Because of this, many successful companies have plans that will allow them to withstand many different types of shocks to their industry and sector and plan for the various cycles that will inevitably occur.

Solution: Create a plan so that the company can withstand an economic downturn (not if, but when that will happen).  It’s critical to develop a planning matrix that considers multiple scenarios and implementing different strategies given the following economic environments: Operating at the status quo, operating in boom times and operating in a recession.

Implications: Rather than simply reacting to cycles and changes in economic conditions you will be far better prepared by taking the time to develop a comprehensive planning document that shows specifically what must be done when the economy takes a turn for the worse – or even a turn for the better. With this done in advance, then even catastrophic events like 9-11 don’t have to create chaos in your business.

Get your money up front

If you’re waiting for money, how are you going to pay your contractors… or buy materials… or cover your bills?

If a client isn’t willing to pay up front, you need to wonder if he or she is going to pay at all. You may lose one or two deadbeats with this policy, but you’ll save in the long run.

Solution: We can’t say it enough: get your money up front! Whether it’s through prepayments, deposits, upgrade payments, or owner financing, get a percentage in advance. That’s because it’s a lot easier to collect money when your clients are waiting for your services, and a lot more difficult to get that check once you’ve already completed the project.

Implications: Getting your money up front ensures that you get paid. If you’re not in the practice of doing this, then you’ve probably felt the sting of a client that’s walked away without paying or a homebuyer that fights you over the last draw. Either way, you’re probably going to be the last person that gets paid, if at all.

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