Business – The boring stuff counts….
In my Wayne’s Words of Wisdom this week, I thought I would focus on what makes a good business tick…. it might not be as exciting as some discussion points, but it is definitely as important….. read on if you realise your business needs more than a magic wand or a good slogan to succeed.
So many times I see businesses talking about social media campaigns, new marketing strategies, some motivational seminar they went to, a website upgrade and the list goes on. Only to find out, they are focused almost exclusively on that very small part of their business (normally the customer acquisition) with sad consequences for the other areas of their business (e.g. cashflow, profitability, customer satisfaction so-on). True, social media and marketing campaigns are important, but not to the detriment of other areas. I am picking on marketing a bit here…. but it is true of any area of the business.
Think of your business as a building with two doors, one entry, one exit and a conveyor belt connecting the two…. with customers coming, something done to add-value in the middle, then a service/product delivered at the end to a happy customer. Simple isn’t it. I’ll add a few more provisos to this over simplistic image later…
So if an owner only focuses on the front end (marketing and customer procurement), gets lots of new customers…. but they can’t fit through the door or can’t all get on the conveyor belt…. we will have lots of unhappy and non-repeat customers. Or what if we spend lots of money on those campaigns, but don’t measure if they are actually working… no increased activity through the door, but we don’t know because we aren’t measuring it and profitability suffers.
Time and time again, we see big spends on customer procurement with little actual benefit or without the owner measuring a new campaigns success. Worse, when it does work, they can’t handle the increase in activity and fail to impress the client. As boring as it might be, a business owner needs to focus on all parts of the business, the front-end (customer procurement), the activity that adds value or delivers the service (efficiency, procedures, quality control, outside the box value-add ideas), then measuring its success (the figures ….. Profit and Loss, margins and customer satisfaction).
Of course, the building is a bit more complicated than my simple example above, you must also innovate, motivate (HR and employee engagement) and do it all for a profit…. after all, I am an accountant, so I can’t forget that one.
So next time you are looking at your business and wondering what you can do to improve it, think of your business as that building…. review all parts of your business, make sure your product or service is sound, that you can deliver it in large quantities (at least to full capacity) for a good margin/profit and you are monitoring the outcome to ensure you are on the right track. Developing procedures or measuring your success might not be as exciting as a social media campaign or website upgrade, but it means just as much to your bottom line.
Its a bit like a healthy eating and fitness plan…. we know what we have to do to keep fit and eat healthy, but are you being distracted by the tasty bad stuff. Remember, everything is good in moderation. Ensure you are not distracted by the exciting stuff and also focus on the “boring” stuff that counts.
My business clients that make the most money do the simple things right, have a good product, know they can deliver it efficiently and make money, have attention to detail, and they plan and monitor.
Don’t worry, its not pocket protectors and calculator type stuff. In upcoming articles, I will talk about how to measure your business by setting your critical success factors (It is not as accounting like as it sounds), the growth function, some common mistakes made by businesses, business improvement strategies and simple monitoring tips.