4. Increase the Effectiveness of each Process in your Business
The fourth way to grow your business is more of an all-encompassing strategy. Increasing the effectiveness of the way you do business is central to everything. The quality of the processes defines and determines the quality of the outcome.
Ageing is an efficiency indicator that should be applied to all areas of the business. For example—
• An aging and less efficient plant facility
• Old and dilapidated premises
• Product profile – no new products in years
• An outdated attitude to employees
• Obsolete office equipment and systems
• Over-used advertising or marketing procedures
“Doing the same thing over and over again and expecting different results is not going to happen!”
Develop functions, systems and manuals. Build your business on functions rather than the people in the roles. Good systems clearly spell out how each single business task is carried out and will ensure easy handovers, training and delegation (e.g. ensuring all deliveries are invoiced and accurate.) Many businesses are built around specific people rather than jobs or functions those people perform. Changing your business to one that identifies functions first then slots the right people into those functions will help your business grow.
Training is another pivotal area for improving the processes within your business. Regardless of whether its customer service, phone answering techniques or computer skills, training your team members properly is extremely important to ongoing development of your business. Systems clearly spell out how to do every single business task and make it easy to train team members and delegate work, leaving you more time to develop your business.
REMEMBER —”There is no letter ‘I’ in Team”!
“Work ON your business not IN it”!
The business owner stuck handling day to day tasks will only achieve slow growth if at all. You need to step outside these activities and look at the business objectively. This is where All Year Taxation Ltd. can help.
Measure your current performance. You must have an understanding of your strengths, weaknesses, opportunities and threats to grow your business. Go back and look at the BLOG written on November 8, 2012 – ‘Key Performance Indicators’, this will help you measure your performance. As well have your Financial Statements completed right after the end of the financial period. This will allow you to look at current and not outdated numbers.
Potential Sales Increase Worksheet
To illustrate the compounding effect of these 4 profit drivers (the 4 ways to grow your business) let’s assume you have 1,000 customers and look to increase that by 10% to 1,100. Next, increase the number of times your customers come back to you by 10% (1 time per year to 1.1 times per year). Then, increase your average sale to that customer by 10%.
Numb. of cust. x Number of Dealings x Ave. $ Sale = Total Sales
NOW: 1,000 x 1 x $250 = $250,000
PLAN: 1,100 x 1.1 x $275 = $332,750
Sales have grown by 33%. If your profit margin is just 30% your additional profit has increased by $24,825 and the value of your business has also grown.
All Year Taxation Ltd has been helping small businesses achieve these results and more for over 41 years. Contact us at 416.488.1801 and see what we can do to help you achieve your goals.
Small Business is Our Passion and our goal is to help you build a better, more profitable and valuable business by combining the knowledge of your business with our consulting tools and expertise.