The Business Edge Blog

February 5, 2013

Every Business – 5 Key Parts

5 parts of a business“A business is a repeatable process that makes money.  Everything else is a hobby.” – Paul Freet

Josh Kaufman in The Personal MBA provides the following definition of a business.  It is a repeatable process that:

1.  Creates and delivers something of value…
2.  That other people want or need…
3.  At a price they’re willing to pay…
4.  In a way that satisfies the customer’s needs and expectations…
5.  So that the business brings in enough profit to make it worthwhile for the owners to continue operation.

At the core, every business is fundamentally a collection of five interdependent processes, each of which flows into the next:

1.  Value creation – discovering what people need or want, then creating it.
2.  Marketing – attracting attention and building demand for what you’ve created.
3.  Sales – turning prospective customers into paying customers.
4.  Value Delivery – giving your customers what you’ve promised and ensuring that they’re satisfied.
5.  Finance – bringing in enough money to keep going and make your effort worthwhile.

If you take away any one of these five parts, it’s not a valid business any longer.

When planning a new business or analyzing an existing venture, always begin with a review of the five parts – they will help you discover any major issues or gaps quickly.

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If you can master the concept of these processes, you’ll be well on your way to being ready to present your business to potential investors, bankers, mentors or your board of directors.

Questions for Consideration:

Think about the business you’re in:

  • What are the five core processes?
  • Can you describe or diagram them in detail?
  • How do they fit together?
  • Where do you need help?

Please share the five core processes in your business using the Comments section below. I look forward to hearing from you.

Until next time – Remember to mind your business!

December 6, 2012

#1 Critical Ingredient for Sustainable Growth

growing plantSustainable Growth

There is an almost magical component to sustainable business growth, but it’s not obvious, and most business owners are not spending the time on it to reap the greatest rewards.  The key word is “sustainable” – you can have growth without this component, but it won’t be easy.

When you think of business growth…what comes to mind?

Great marketing?   Really effective sales?  New products?  Super flashy advertising?  Signing a huge new client?

All of these contribute to business growth, but there’s a more fundamental attribute found in sustainable, successful businesses. It can make the difference when it comes to taking your business beyond the brute force stage (where you’re putting in a lot more than you’re getting out).

That secret ingredient is Systems!

What are Systems? Simply put, effective Systems are a combination of written processes, tools, automation and applications that allow you, the business owner, to get things done the right way without actually doing it yourself.  A successful business is made up of a whole series of systems that work together in a seamless way, generally without any direct input or oversight from the owner.

Want to get a quick read on how well you’re doing when it comes to Systems in your business?  Here’s a short quiz you can use to judge your progress in Systems.  Score yourself from 1 to 10 on each statement…10 if you are in alignment with the statement, 1 if you aren’t even close.

#1 – As the owner of the business, I fully understand that my primary role is to ensure that the business is run by systems (step-by-step processes and procedures).  Score _____ 1 to 10.

#2 – All of the functions necessary to successfully run my company have been clearly identified and documented in a company operations manual.  Score _____ 1 to 10.

#3 – We regularly consider outsourcing options to reduce expenses and increase efficiencies.  Score _____ 1 to 10.

#4 – We regularly review our systems to ensure they are as efficient and effective as practical in delivering the desired outcome.  Score _____ 1 to 10.

#5 – I’m confident that my employees would know what to do if the leadership team or I were not present for an extended period of time.  Score _____ 1 to 10.

What’s your score?

How did you do?  This quick quiz certainly isn’t comprehensive, but it will give you a pretty good idea of where you and your business stand from a Systems perspective.  There are several key ideas represented here:

  • Do you view your primary role – where you spend the most time (as the business owner) as purposely building your business…and the systems that run your business?
  • Are you documenting everything down to a level that a new employee could jump right in?
  • Are you and your team consistently looking for ways to improve?

So how did you score?  If you scored above 40…then you’re in pretty good shape…keep up the good work!

If you scored between 30 and 40, then there are some things to work on, but at least you’re headed in the right direction.

If scored between 20 and 30, you at least understand it’s important, but you have some work to do.

If you scored less than 20, then it’s a good bet that you feel that you don’t have time to read this post and you are working really, really hard all the time…and your business is at risk!

When you’re ready to unleash some magic and start building systems into your business, the best bet is to carve out some time – schedule it – and identify the big components of your business (where your business comes from, how you close business, how you fulfill your sales, and how you collect business income from sales).  Once you’ve got this defined, in writing, then you can start digging into the details of each over time.

Make sure you get your employees involved…they probably know the details in a lot of areas better than you do and they’re going to have to live with whatever system or process is developed – so include them in the solution.

Get an outside perspective – consider hiring a business coach or joining some kind of advisory board like The Boardroom to help you focus and get some insight that might be hard to come by on your own.

What is your experience with developing business Systems?  I look forward to reading your thoughts in the comment section below.

October 19, 2012

For Sale: Your Business – but for how much? Part 1

In the beginning it was just you – and maybe a partner or two.  The business ran on blood, sweat and tears, with some heart and soul thrown in – and a chunk of your personal financial resources as well.

It’s no surprise that when the time comes to sell the business and retire, some owners just aren’t prepared.

The emotional investment is why it’s so difficult for most people to sell their business.  Sometimes a valuation produces a figure that is only a percentage of what the owner is expecting and needs for retirement.

How can you increase profitability and make it more desirable for a buyer, make it more transferable, and help convince the buyer that the business will remain intact post-transfer?  Front Range Business Inc, a Boulder-based brokerage firm that facilitates selling owner-operated businesses suggests engaging a business coach.

They cite many examples where a business coach has helped to double the value of a business over a twelve month period.  The work I do with my clients – either for their own growth or in preparation for sale – includes the same work Front Range Business Inc recommends; formalizing and documenting processes; creating employee, service and other procedure manuals; staff training; and most important of all, working ON the business, not FOR (or IN) the business.  Owners typically are so caught up in the day-to-day operations that they overlook the big picture.  Owners need to focus on marketing, training and where they want to take their business, then plan the route that will get their business to the final destination: a successful and profitable sale.  I suggest that my clients keep their exit plan in mind as they make decisions years prior to their planned retirement date.

When owners start thinking about an exit there are a number of big questions to consider.

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Stay tuned for Part 2 where I’ll cover these questions and other considerations!

Feel free to comment on your thoughts about preparing your business for sale by posting your thoughts below.

Until next time – Remember to mind your business!

August 15, 2012

7 Keys to Success for Business Owners – Part 4 – The Marketing Plan

Every once in a while I meet a business owner who says they don’t need to market their business. I congratulate them and ask them how they know that they don’t need to market.  Usually they have as much business as they can handle currently and think that more marketing will only increase the number of people wanting their product or service.  They are probably right on both accounts.  So, what about the option of expanding the capacity of the business?  Why choose to stop marketing?  I like the saying –

“Don’t wait to dig your well until you are thirsty.”

In my interpretation this means don’t stop marketing because your business is at capacity now.  If anything happens to the current clients you’ll be looking for more.  If you decide to increase the capacity of the business, you’ll need the additional clients/customers to fill the new capacity.  In most businesses marketing today does not mean new customers tomorrow.  Prospects need to know about you, grow to like you and trust that you will meet their needs.  That means you should be marketing your business all the time.

I ask my clients to create a Marketing Pie.  Draw a large circle on a piece of paper.  Divide the pie into quarters by drawing a big + through the middle.  Then divide each of the pieces in half by adding a large X through the middle of the pie.  You should now have an 8 slice Marketing Pie.  Each section of the pie will represent something you actively do to market your business – active marketing, not passive marketing like an ad in the phonebook.  If you represent your business in a BNI group, or attend other networking groups where you promote your business (and not just chat with friends) label one slice of the pie Networking.  If you have a booth at quarterly business tradeshows, label a slice of the pie Tradeshows.  If you educate your prospects by giving seminars, label a slice Seminars.  If you consistently write a blog promoting your business, label a slice Blog Posts.  Consider all the other marketing you do and if it is active, label a slice of the pie to represent the activity.  If you have more than 8 active marketing strategies, don’t make your slices smaller, create another pie!  If you have unlabeled slices in your one and only pie, let’s talk!  We need to fill the empty slices with something you will add to your marketing strategy.

You should have at least 8 active marketing strategies identified on your pie.  The next step is to schedule the activities (each slice of pie) on a calendar so that you know when, where and what you will be doing to actively market your business.  This becomes your Marketing Plan.  If you are blogging or giving a 60 second commercial for any of the marketing activities, you can enter the blog topic or perfect referral that you want to mention in each of the calendar entries.  One of my clients has developed a spreadsheet with the months across the columns and the weeks down the rows as well as room for the topics for each of the social media sites he uses.  He plans his marketing activities a couple of months in advance so he can keep an eye on his marketing plan.  Click here to download a copy.

What does your marketing pie look like?  How well did it fill a calendar and create your Marketing Plan? How many hours a week do you spend actively marketing your business?

I look forward to hearing from you.  Share your comments below.

Until next time – Remember to mind your business!

March 6, 2012

DST 2012: Use Your Extra Hour of Daylight to Look At Your Business

 We gain an hour of daylight starting this coming weekend.  What will you do with yours?

If you are a business owner with a physical location, step outside and look at your business as your potential and existing customers do.  Is the window clean?  Are the exterior walls in good shape?  How about your sign?  Do you have something that makes your customers smile as they enter your door?  Use your extra hours of daylight to spruce up from the outside in.

If you don’t have a physical location, step outside and look at your business as your customer would by looking at all your marketing material.  Start with your business cards and your tagline.  Are they still up to date, or do they need a bit of freshening up?  Look at your brochures and social media.  When was the last time you updated your experience?  Each client job you work on provides you with new experience.  Spend your extra daylight hours updating your business look.

Do you drive a vehicle in your business?  What impression does it give your potential customers?  If it looks like you live in your car, it’s time to clean it out.  If the tools of your trade are scattered all over, what impression does that give your customers of the care you will give their things?  Use your extra daylight hours to organize your tools.  Does your car or truck look like it has gone the entire winter without a car wash?  Use your extra hours of daylight to spruce it up inside and out!

When you look at your business through your customers’ eyes, what do you see?  Share your creative solutions with us below.

Holly                      Licensed Professional Business Coach    Certified Retirement Coach

February 28, 2012

Use Your Extra Day (Feb 29th) Wisely!

An Extra Day This Year!

It will be here before you know it.  It only happens every 4 years so it’s a special day.  How will you spend yours?

 As a business coach I am encouraging my clients to find ways to develop their marketing plan for 2012 in more detail.  Here are a few of the things we’re talking about:

> Who is your ideal client?
> What issues do they face that you can solve?
 > Do you speak directly to your client’s issues in your marketing materials?
> Where can you find a group of your ideal clients meeting together?
> Do you have a signature talk that you can present to a group of your ideal clients?
> Are you networking at least 6 hours per week?
> Do you set a goal for each of your networking events?
> If you use social media to connect with your ideal clients, do you have a list of ideas that you have collected throughout your work that provides you with a ready list of topics?
> Do you have a “well thought out, well strategized, robust 2012 marketing plan” so that you are continually marketing on schedule?

If you are networking regularly it’s probably time to update your elevator speech.  I’m amazed by the number of times I have overheard someone say to a business owner they see all the time – “I didn’t know you did THAT!”  Choose something you do that is not in your current elevator speech.  Add it to your revised speech.  Let me know what happens!

Let us know how you spend your “extra” day and the results you see in your business! 

  


August 16, 2011

The #1 Top Myth of Business Coaching

The #1 Top Myth of Business Coaching…It’s Expensive

Have you ever considered talking to a Business Coach but thought it was too expensive?   It’s the #1 Myth that I hope to dispel.

As a Business Coach I initially meet with potential new clients to determine what their needs are and if I am the right solution for them.  In the initial meeting we work together to clarify their issue and the steps needed to move forward.  Often they are able to clearly see what they need to do at this very first meeting!  They get a “test drive” to see how we might work together in a longer coaching relationship.

If we go forward with more coaching, the goal is to find money in their business through cost savings or generate more money by streamlining procedures or gaining more cash flow through more sales to more than cover the cost of the coaching.

Let’s look at just one example, your cost of marketing.  If you don’t market, you don’t get customers.  But what if the marketing you did was directly targeted to the audience you need to reach?  Those that become your customers.  The payback is much greater when you do the right marketing to the right people.  If a Business Coach helps you to get a better return on your marketing dollar, the cost of the coach is easily covered by the increased results of your focused marketing efforts.

That’s just in the marketing area.  Most Business Coaches work with you on many aspects of your business and help you prioritize where to spend your money most effectively and where to spend your time with the greatest return.  Not expensive, but easily justified by the results you’ll experience.

Possibly one of the best investments you’ll ever make!

Have you thought about working with a business coach?  What is holding you back?  Share your comments here.

August 9, 2011

Delaying Your Launch for Perfection?

 I met with a business owner the other day who was holding back on really launching her business because she didn’t have everything quite perfect yet.  She didn’t have her elevator speech down pat and was having a hard time describing who her ideal client was and what the benefit of working with her was.

Can you relate?  Do you avoid situations where you may need to talk about your business or new product or service because you don’t feel like your message is perfect yet?  Are you delaying the launch until you reach perfection?

During our discussions she very clearly articulated her response to each of the things that were holding her back, but didn’t even know it.  It came out in conversation.  She stumbled when she was “working” at talking about her business, but in casual conversation she was very clear – she just needed a little help to put the words into the format of an elevator speech and a tagline that she was so worried about.  As she begins to work with more clients she may find that she develops a niche and that her clients provide her with the words that others like them need to hear about what it is she does for them.

Don’t get hung up on the “branding” of your business – just get started!  Brand for Today – not Forever.  Most business owners change their branding after the first 6-12 months, and again after 12-24 months.  It is almost impossible to pick a name, tagline, look and feel that will fit your business forever as your business responds to the market and your clients.

In developing something that may change as your business evolves, just make a decision and launch!  Go out and test your choice.  Talk to potential and current clients.  Talk to people in your networking groups.  See how people respond to what you say, but in particular notice how it feels as you say it.  Does it roll off your tongue, or do you stumble?  Test it, then change it if you need to.  Watch the furrow between the brows.  If you detect a softening, you are speaking to them.  If the furrow gets deeper, you haven’t quite hit the mark yet.  Make some changes and try again at the next networking opportunity.

The key is to get out there and try something!  Rehearsing your messages in your head is never going to give you the feedback that real people will.  Get out there and let your future clients help refine your message.  Don’t wait for perfection – brand for today, not forever.

Want to test your marketing messages?  Share them in the comments below and we will give you feedback!

May 10, 2011

Thinking of You – Stand Out While Networking

  

 

  I was thinking of you and wanted to share some ideas on how to stand out when networking…..

When we network there are a couple of common questions we hear – over and over again.  Often we reply with an answer that does nothing for our business, or to help us stand out from the crowd in the mind of the person asking.  My goal is to help you respond with a better answer.

Question #1 – What’s new?

How did you respond during your most recent networking event?  “Same old stuff?”  “Work, work, work?”  “Nothing really?”

From now on, don’t miss the opportunity to talk about your business.  Tell them about the great new client you have started working with (keep confidential if appropriate), how you solved a problem that made a huge difference to a client, the great feedback you got, the new product or service you are offering…..or the ideal client you are looking for.  See the difference your response can make?

Question #2 – So what do you do?

If your response is the executive summary of your business card, remember they can read your card once you give it to them.  My response would be something like “I help people grow their business, and enjoy it more“.  My hope is that response generates a follow-on question like “How do you do that?”  Now we’re in conversation about what it is I really do, provide benefits to my clients.  Isn’t that why you are at a business networking event, to talk about the benefits you provide your clients?

Your turn.  What’s newSo what do you do?  Share your responses in the comments below.   Happy Networking!

Holly Hanson       The Business Edge – Licensed Professional Business Coach – The Headlights and Guardrails for YOUR Business!

May 3, 2011

The Perfect Day

What is a Perfect Day?

For many of my clients a perfect day is one where a new client or customer arrives, gets great service, and leaves as a raving fan – willing to tell others about their experience.  This holds true for my clients from ” A to Z”; Attorneys to Zebras (actually I don’t have any Zebra clients yet….but I do have a yoga instructor!).

When the new customer or clients arrives, I hope the business owner remembers to ask how they heard about the business.  It’s always a good idea to know what marketing efforts are paying off.  Return on Investment is what that is called.  Over time my clients begin to see a pattern of where their customer are coming from.  It could be that another customer referred them.  If that is a consistent thread, then a customer referral program is indeed in order.  Reward the customers who send you other customers!  They will keep referring you, and the business will grow!  It could be that a particular marketing effort is paying off.  It’s good to know which ones to keep investing in and which ones to discontinue.

Providing great service is a given.  At least that is what the business owner would always hope to do.  What if the business owner is not involved in the transaction?  Is everyone involved in the business on the same page?  Would every person working with your clients or customers strive to provide great service that leads to a raving fan?

Think about some of your recent encounters with employees and businesses other than your own.  Did all of them have the goal of providing great service and creating a raving fan out of you?  Some of my recent experiences have been less impressive than that.  Now think about your business.  What can you improve on to make today a Perfect Day?

Share your ideas below!  Make today a Perfect Day!

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