If you do these 9 things, your company will grow in any market, any niche. Hint: Almost all my top clients do them.
Here are some of the regular habits of my most effective and profitable clients. Do these things and your chances of success will go way, way up. I’ve taken these ideas directly from my most successful clients. They are habits and practices that many struggling entrepreneurs tend to ignore.
There is a formula for success. Perhaps it lies within some of the habits that success full business owners and leaders do on a regular basis.
I know this isn’t a very sexy topic and it can be downright dull, but the most successful businesses run efficiently and minimize waste. One of the problems many entrepreneurs have is that they want to be involved in every decision. When you’re first starting up, this may be necessary, but at some point you’re going to have to trust your people enough to delegate responsibility. You can’t be everywhere and you can’t do everything. Those who try to micro manage often have problems growing beyond a small mom and pop shop.
So how do you run an efficient business? Well there are a whole bunch of tips and strategies out there. Here are a few of the things my successful clients do:
1. Use a CRM
In a previous blog post I spoke about using customer retention management software. A CRM will help you manage your client data and organize it so you can sell more for less. Once you get a system for tracking and managing client data, you can identify which customers you can sell more services to. Getting existing customers to buy more is much cheaper than prospecting for new clients.
2. Initiate a Marketing Strategy
You’ll still need to acquire new customers, however, so you’ll need to make sure you have created, and are following, a formal marketing plan. This was also covered in a previous blog post.
If you’re the sales manager, then be sure to have individual sales meetings to check progress with your sales people and make sure your sales tactics are consistent with your overall strategy. You want to catch poor performance early so you have time to do something about it.
On the other hand, I have never been a big fan of department head meetings – you know the ones where everyone goes around the room and discusses what’s going on in their departments. I never understood what those meetings were supposed to accomplish.
I understand that meetings are good tools for holding people accountable. If people feel they are going to be exposed for poor performance, they’ll work harder to make sure they can give a good report. It all depends on your type of business, but too many meetings can bog down a good company.
3. Outsource Tasks
Outsourcing is a great, and very under-used, way to become more efficient. If you run a small operation, don’t be afraid to pay someone to do some of the little stuff like data entry. I’ve found that many small business owners don’t want to incur the expense, but the cost of you doing it yourself may be a lot higher than just paying someone else to do it. You need to free yourself up for making sales. That’s how you’re going to grow your business.
Many of the marketers in my business outsource everything—and I mean everything. You’d be surprised how many of them work from home, but you’d never know it because they have subcontractors that are a part of their “team.”
Go to Odesk.com to some great outsourcers and subcontractors. When you set up your account, you’ll see all the different categories that you can choose to hire virtual workers. And there are thousands from which to choose. I would browse all these categories or enter your own custom job yourself. There are plenty of videos on You Tube that will show you how to set up an account and find good contractors. Here’s one that I made. I use Odesk all the time when I need help with data entry, web design and even some of the digital marketing work that I can’t get to. Almost all of the people I’ve hired have been excellent. Odesk also allows you to dispute the work as well if you believe you hired someone who is not doing the job.
Another good source for really simple jobs is Fiverr.com. Every job on Fiverr is five bucks unless you purchase an upsell. I use Fiverr mostly for quick graphic art work and some data entry, but never use it for SEO. The internet marketers on Fiverr are dangerous and use outdated tactics.
4. Use Effective Time Management
In my company, we have what we call “Pay/No Pay.” Entrepreneurs who don’t like to sell will often find themselves pushing paper from one side of the desk to the other. Or they’ll tie themselves up on email all day. Some run around like a chicken with its head cut off, but never really accomplish anything.
You always have to be aware of what you are doing and whether or not it’s something directly related to making money. The things that do are what I call PAY tasks. The things that don’t are NO PAY. You know what I mean. Email, for example, is a big time killer. Do you really need to reply to email throughout the day? Is that reply making you money? Maybe you should set specific times in your day for reading and responding to email.
Use a task manager like Asana.com if you need to. Prioritizing your tasks throughout the day can help you manage your time better and help you remember to spend time on the things that truly make you money.
5. Implement an SEO Strategy
If you do nothing else, invest in digital marketing. SEO, or search engine optimization, is the art of driving traffic and conversions to your business from online sources. If your web properties are well placed and managed properly, they can drive more business than a well-tuned sales force. SEO is today’s marketplace and you’ve got to be a part of it if you want to have a successful business. I can’t underscore this point enough. If you’re not taking advantage of digital marketing, you’re leaving a lot of money on the table. It’s a huge field and if you know little about it, then you should consider getting a consultant. Contact us here to set up a free consulting session.
6. Eliminate Buzz Kills
Sometimes you need to know when to cut the cord. We all have had customers that seem to drag us through the mud. They’re twice as demanding as any other customer and then they have the nerve to pay late. Not only are they dragging you down, but they’re probably dragging some of your staff down as well. Get rid of them and free yourself up to find better customers. Never lose respect for yourself. No sale is that important.
When out on sales calls, know when to recognize customers that will turn into a drag. Usually they’re the ones who are asking for a lot of favors, promise you lots of referrals and big pay days, but aren’t willing to pay you for it up front. I’ve been in sales meetings where prospects have tried to pay me a commission or even give me a percentage of their company rather than pay my fee. This is ALWAYS a bad idea. Don’t be tempted. These situations never work out. Walk—no run—away.
7. Consider Eliminating Work From Home
Recently , you may have heard that the new CEO of Yahoo, Marissa Meyer, who came over from Google, no longer allows Yahoo employees to work from home. Oddly, I think that’s a good idea. Not everyone can do it. Too many people get caught up with distractions and are less productive at home than they are when there is someone around holding them accountable. It’s up to you if you want to allow this or not, but I usually recommend against it.
That being said, my girlfriend was a software consultant and often worked from home. She was an absolute machine and worked harder at home than she did in the office. So there are exceptions to the rule.
Likewise, you may want to reconsider that open office environment. There have been some recent studies that suggest having all your employees work in a common area may promote unity, but it can also cause a lot of distractions. Workers tend to blurt out what’s on their mind, disturbing those working diligently on a project deadline. Setting “quiet time” rules and interaction restrictions may be in order.
8. Invest in Your People
My most successful clients are not managers, they’re leaders. They don’t manage people, they lead them. And they’re not all type A personalities. I have some clients that are quiet, or behind-the-scenes, leaders. They just know how to get the most out of people. They create positive work environments by creating goals that the entire office can achieve. They never force sales people to compete with one another.
Probably the biggest difference between how successful leaders treat their staff and the rest, is that successful leaders trust the people working for them. Trust is a hard thing to give if you’ve been burnt before, but you can’t delegate without it, and if you can’t delegate, than you’re doing everything and getting nowhere.
It’s crucial that you be able to see your company and work environment through the eyes of each one of your employees. Most managers have trouble doing this. They just walk around like everything is great and employee problems are no big deal. Well. They are a big deal to the employee.
Many entrepreneurs and company owners never took any kind of leadership training and have no idea how to lead people. And I can’t teach you how to be a good leader here. You’ll have to invest in the training yourself. Find some good leadership books by others in your industry. When you go to conferences, ask what others in your business do. Most of all, try to empathize with those whom you are leading. Know what it is like to be them.
9. Know Your Finances
Warren Buffett, the most successful investor in the world, is known for mostly being concerned with three financial statements when evaluating a company in which he may want to invest; the income statement, the balance sheet and the cash flow statement. You should be intimately familiar with each one of these statements as they are the life-blood of your business.
The Income Statement
The income statement will tell you how much money your company has earned over a given period. Are you over-leveraged? Are you spending too much money acquiring new business? How does your income statement look over time? Are you making more than you were at this time last year? This is a good statement to tell you what kind of margins you have. If they’re too tight, you’ll need to take some kind of action.
The income statement will also tell you the source of earnings so you can measure it with your marketing plan. Are your sales consistent with you plan? Are you reaching sales and income goals?
The Balance Sheet
The balance sheet tells you how much money you’ve got in the bank and how much you owe at any given time. It gives you your net worth as a company. If you have little cash on hand, then you’re probably not running an efficient business. You’ll need to check to see if your prices are high enough, if you’re paying too much to sales people and other employees or if your company just isn’t making enough sales.
Since your balance sheet is only good for a given date, you’ll need to check it regularly. Investors often like to see that a certain portion of your assets are liquid or can be made liquid pretty easily. This gives you some breathing room in case you run into trouble.
You’ll also want to monitor your accounts receivables to make sure clients are paying their bills on time. Late paying clients are a drag on the efficiency of a business.
Cash Flow Statement
The cash flow statement is important because it tells you how much money is going in and out of your company and at what frequency. Poorly managed companies often have cash flow issues and can never seem to get ahead. If you struggle with cash flow, it’s a sign that your company could be close to disaster. Cash flow is never a problem for solid companies and you should have enough on hand to cover any unforeseen expenses.
There are a lot of techniques you can use to become more efficient such as automation, using a faster broadband, giving staff more responsibility and by simply managing your time better. Make a to-do list if you have to. I do. As much as I am tied to the digital world, I still use an old fashioned white board to write down all the things I have to do for the week. It’s on my office wall, right in front of me so I see it every day. The PAY tasks get a letter A next to them, the important, but not urgent things get a letter B and the unimportant things get a letter C. Use whatever system works for you and make efficiency a part of your company culture.