3 Tips to having your ideal life sooner….

Like so many, are you working hard to save up to one day have the life you really want?  When will that actually work out?  Do you really want to wait that long?

Image courtesy of graur razvan ionut at FreeDigitalPhotos.net

Image courtesy of graur razvan ionut at FreeDigitalPhotos.net

 

If you list, in order from 1 to 10, the things in life that are most important to you and that you love the most, does that reflect how your time is spent?  Do you spend the most time on what’s most important to you and cherished by you?

 

Sadly, for most people, the answer to these question is a resounding “no”!  All too commonly, people are caught on the hamster wheel of work….taught by school, university, corporate life and the people you’re surrounded by, that working hard for a career is how to then have the life you want.  It’s a step-by-step evolution – school, then uni, then job, then next job and, before you know it, you reach the end, you’re 65 and you’ve ended up wherever you’ve happened to end up!

 

Yet surely if people were being honest and were to define their ideal life, they would prefer to have it sooner!  It seems ironic at best, tragic at worst, that so many people are subconsciously choosing to not have what they want……but how can you change it?

 

Potentially, it’s too big a subject to address fully in one post so I’ll simply make a number of observations that lead to simple steps people can take to accelerate the speed with which they have the life they want.

 

    1. Have you actually defined your ideal life, written it down and do you refer to it regularly?  I suspect not.  Without at least defining the objective, what are the chances of reaching it in the most efficient way?  Very small!  This should be a comprehensive definition; ranging from your biggest dreams to the detail of what an ideal day, week and month would look like for you.  It should not be a plan for work and then a plan for life; the two of which you try to balance.  It should just be a plan for life, which includes all elements of life.

 

    1. Have you explored all of the options for increasing both efficiency and flexibility in your work?  Do you plan effectively and execute with discipline?  Do you utilize commute time to read or listen to audio books?  Can you do some work remotely to reduce commute time?  If you can win back 15 minutes a day, that’s over 90 hours a year to spend on the things you love!

 

  1. Have you mastered time management?  It’s the only asset we’ll all run out of, yet throughout the established education process, we’re never taught how to manage it.  Do you tend to procrastinate on the big, difficult and less urgent things?  Let’s be honest, planning never feels urgent so is often the first thing to be distracted from.  Do you spend much time doing thing which are neither urgent nor important?  Remember, if you waste 15 minutes a day, in the course of a year that adds up to over 90 hours – yes, 2 working weeks!  Would you like an extra couple of weeks each year to spend on what you love?  Do you value and respect your time?  If you set aside an hour to think and plan, will you stick to that time and focus on it in the same way you would an important meeting?

 

The truth is that you’ll need to work hard at some stages to make it happen; but that should only be for a limited time, to a very clear plan and towards a very clear destination – having the life you really want!

 

For many people, some of this won’t be easy but it is straightforward; define where you want to get to and how you might get there, set up your day-to-day life to maximize the time you have for yourself and then manage your time with skill and discipline.  Good luck and enjoy!

The two clichés every start-up should live by (and most don’t)

Start-Up1. Cash is King

 

Insufficient capital is one of the main reasons for small business failure.  Yet studies have shown that the vast majority of small businesses operate without any financial plan and perform no cash flow analysis at all.

 

Here are some basic cash flow management tips:

 

  • Carry out rolling three month cash flow forecasts on a daily or weekly basis.  Use one of the many tools available online or simply create a spreadsheet outlining expected cash receipts and cash disbursements for every week over the next three months.  This will ensure any potential cash shortfalls are flagged early giving you some time to find a solution.

 

  • Relentlessly chase overdue payments.  Be aware of how much accounts receivables you have outstanding and how old they are – as a rule of thumb the older they get the less likely you’ll ever collect them.  Explain to new customers upfront that you are committed to providing them and excellent product or service and that in return you expect to be paid on time.

 

  • Have daily sales KPIs (key performance indicators) to avoid unexpected variations in sales.  Good sales KPIs should give you a strong indication of what sales will be like in the near future and can be measures like number of prospects in the sales funnel, number of inbound calls or emails requesting information, number of website events etc.  They provide an early alarm bell for a possible future sales slump and allow you to take corrective action early.

 

  • Think before you spend: any money spent should be with the expectation that the investment will result in new customers or in keeping existing customers for longer.  If what you’re about to spend does not serve either purpose, do you really need it?

 

2. Time is Money

 

If there was one habit to acquire as a new business owner it would be the following: at the end of each day, ask yourself the question “How much of my time today was spent on income generating activities?”.   Just this one question could be the difference between success and failure.

 

Be aware of what you’re spending your time on and block off time every day to focus on sales and marketing.  To go back to cliché no 1, nothing is more important in this phase of your business than cash, and to generate cash you’ll need to generate sales.  And very likely in this phase of your business nothing will happen unless you’re making it happen.  So track your time, spend it carefully and calculate the cost of procrastinating: 15 minutes on Facebook every working day amounts to 55 wasted working hours over the course of a year.

 

So note down these two clichés on a couple of post-its, put them where you’ll see them every day… and now go generate some income!

 

 

 

How to get your business to work properly without you needing to be there

Why is this important?  We define a successful business as “a commercial, profitable enterprise that works without the owner”.  For most business owners, the idea that their business could work properly without them is exciting, but seems unlikely! In truth, if you can’t achieve it with your business, then it will fail.  At some point, you will stop and then so will it.

empty chair

So, if you want your business to be sustainable in the long term, or you just like the idea of enjoying the time freedom that business ownership should provide, you need your business to work properly without you.

 

For most businesses we come across, there are three things that need to be done to achieve this:

  1. Systematise all activities in the business;
  2. Specifically, systematise a reliable business development system; and
  3. Get in place the right team of people to run those systems.

 

1. Systematise the activities in the business 

To successfully hand over responsibilities in your business to your team, ensure that the following are in place first:

 

a) Everyone knows ‘what the business is all about’

For others to be accountable for making good decisions in your business and looking after your clients effectively, then it is vital that they understand the direction of the business, the vision of the business and what the culture must be.

 

b) Clear roles and responsibilities

Typically, roles will be outlined in an Organisation Chart, in which each role will have certain accountabilities.  Then, for each role, it is necessary to define:

i.             a summary of why that role exists;

ii.            the over-arching outcome that must be achieved to justify that role; and

iii.            the key performance indicators (KPIs) that will be tracked to ensure that the role is being done effectively.

 

c) Clearly defined and documented processes and procedures

Every routinely completed process in the business must be documented in some format, or the business will forever be reliant on the knowledge of the owner or of individual members of staff.  This documentation might involve an operations manual, process maps, videos of processes being completed well, tracking systems to monitor performance, accountability systems and the like.

 

Completing this work is the most time-consuming aspect of systematising a business but is relatively straightforward.  Furthermore, when done properly, it always works!  This is when you start to see that you don’t actually need to be there!

 

2. Business Development

The activity which business owners most commonly struggle to let go of is business development.  Typically, they have been responsible for most of the client generation.  To change this, there are four elements that must be in place:

 

a) Clearly defined targets

Perfect marketing is placing a relevant, personalised and attention-grabbing message directly in front of a prospect.  This is only possible if you know what your ideal client looks like, where they can be found and exactly what they need.  You should have multiple targets and they should all be clearly defined.

 

b) Compelling message

Unless you’re triple the size of your nearest competitor so you can compete effectively on price (think Harvey Norman) or have a service that is so unique and valuable that customers will do anything to have it (think Apple), then you will be competing with other similar businesses.  In this case, you must have a clear, and well-articulated, point of difference.  Commonly known as your Unique Selling Proposition (USP), or Value Proposition, this message should not just be about you.  It must articulate how a prospect will, in some way, be better off if they work with you.  Typically, this message will be personalised to each target or each target segment.

 

c) A clear marketing plan

You should have at least 10 different marketing activities going on in your business.  This will reduce the risk of all your eggs being in one basket and will maximise your lead generation.  Once this plan is documented, with relevant templates and supporting materials created, it can be implemented by anyone with a reasonable grasp of your business and of effective marketing.  It should not just be a ‘theory’ document, but must include a clear calendar of action for generating leads.

 

d) A clear, strong and disciplined sales process

Selling a service or ‘big-ticket’ product, you need to ensure that a prospect develops sufficient understanding of, and trust in, your business.  This will typically need to about 5 hours or 7 to 9 interactions.  A good sales process, managed with discipline, ensures that these interactions take place before the purchase decision is made, thus avoiding the risk of ‘premature solicitation’.

If you’re selling more of a commodity or a low-price item, then, to maximise conversion, you need to ensure that your sales scripts are effective and that anyone doing sales is trained to use them effectively.

 

3.  The right team of people

It is ironic that building a good team is both the key to a business owner’s freedom but also the activity that is feared perhaps most in building a business.  This article is too short to cover in complete detail this subject but there are some basic principles that will help to build a team that actually helps you and your business, as distinct from one which causes you more pain than actually doing the work yourself!

 

a)  Recruit for attitude, train for skill.  If you have someone with reasonable skills and a brilliant attitude, you can train them.  If you have someone with great skills but an average attitude, how easy is it to fix that?  Not very!  Our 5-hour recruitment process is both time-efficient and effective at recruiting the right people.

 

b) Induct effectively.  If you’d prefer not to waste 6 months getting someone up to speed (and potentially then discovering they’re never going to get up to speed!), spend sufficient time with them (as a rule of thumb, 20 hours in week 1, 10 in week 2 and close contact for several weeks after that), induct them to a documented plan and hold them accountable to 1-month, 2-month and 3-month milestones.

 

c)  Manage the team effectively….OK, that’s a big subject and too much for this article but, at a minimum, empower your team, hold them accountable and focus your efforts on building and maintaining a great culture.

 

All in all those are 10 tips which, if you can confidently say that you have each of them in place, will ensure that your business can run without you!

5 Fast and Free Ways to Increase Profit

Photo Credit: Dave Dugdale via Compfight cc

Photo Credit: Dave Dugdale via Compfight cc

For any business owner wanting to make more money, the first place to look for improvement should be Net Profit Margin.  The strategies that directly impact net profit margin provide some of the easiest and quickest profit improvement opportunities.

 

Of the 70-odd primary strategies for improving your Net Profit Margin, these are the five that I’ve seen used most often and for most businesses.  They all have the benefit of incurring no significant cost to implement and they work almost immediately:

 

  1. Sell higher margin products and services.  Do you know the profitability of every product or service that you sell?  Are you focussing your marketing and sales on those that make you the most money?
  2. Optimize your Cash flow.  Are you tracking your average days receivable?  Days payable?  Implement 3 strategies to accelerate how quickly you receive money and 3 strategies to extend how long you can (legitimately…don’t pay late if you want your suppliers to support you!) hold your money.
  3. Audit your costs.  Work through your P & L line-by-line and keep asking, “how will we reduce this cost by 10%”.  Then set a budget and do it!
  4. Increase Gross Margin.  There are many ways to do this…negotiate hard with suppliers, stop discounting, raise prices…and remember, once you pass your Breakeven Point, almost all additional Gross Profit drops straight through to Net Profit!
  5. Sack C’s and D’s.  Do you have a list of the clients who cause you most of your headaches?  They haggle, complain, buy your cheapest products, request changes, ask for refunds?  They’re your C’s and D’s; they generate very little profit but take up a lot of time and cost.  Sack them!  Use that time and effort to go out and get more A’s and B’s!

 

Map out a plan and these can all be implemented in a matter of days or weeks….then enjoy the results!