3 things that stop you from making more profit and what you can do about it

Profit is a lovely thing!

You can do so much with it; grow your business, hire some great people, buy some new equipment, get ahead of your debts… and lots more besides.

But if profit is a dirty word at your business you might like to think about what you’re thinking about.

Before we even get to the 3 things that stop you from making profit let’s get rid of any negative thinking about it…

The media and “battlers” beat up on banks and big corporate for making “obscene” profits. Do you think it is “obscene” for a business to make a profit? How much is too much? How much would you be comfortable with in your business? Hmmm… is it possible you have a double standard blocking you from making more profit?

Do you actually know how much profit your business makes or do you leave that up to your bookkeeper or accountant to work out for you? You really shouldn’t! If you kept a good eye on your finances, including reading your Profit and Loss statements each month you’d get a better handle on it.

After you’ve cleaned up any negative beliefs and habits around profit you might like to tackle these profit leaks:

1. Giving your customers discounts even when they don’t ask for it.

Discounting your prices to make a sale will severely erode your profit. If you offer discounts, understand why you have a discount policy and how it fits with the pricing structure of your business. Giving discounts based on your “mark-up” will be killing your profit but, if you must discount, the price should be worked out on your “margin”.

Download the Mark-up vs Margin Fact sheet here

2. Letting your team get away with murder; killing your business with unproductivity

If you’re the kind of business owner who “likes to be liked” you may not be holding your team to the high standards you would really prefer for the business. You don’t have to be a grumpy tyrant to get the best from your team, but you do need to set some expectations and have a way of measuring performance. You may need to set some KPI’s.

If you’ve employed people to work for you, hold them more tightly accountable to their role. Sales people should have strategies and targets and be able to proudly report their weekly and monthly progress to you. Admin people should be able to prove their effectiveness. Marketing people should be bringing you high quality leads.

The Production Team; people who deliver services like accountants, technicians and trades people are billed for their time. Make sure you track their billable hours, track “write-offs” and Work in Progress (WIP) to make sure you are getting good value from your employees.

Train, motivate and reward the good ones, increase productivity and consider moving the poor performers out.

3. Getting side-tracked or bored

Distraction and disillusionment will have an increasing negative impact on the bottom line.

As a business owner it is your responsibility to lead your business. You’ll need clarity of direction and strategies to get there. When was the last time you dusted off your business plan? When was the last time you shared it with the team so they know where the business is headed and how their role fits with that? Have you got a Business Plan or is it time for an update?

Identify your best profit making activities in your plan then work your plan daily. If your plan doesn’t drive you and keep you interested and excited then it’s probably the wrong plan for you. Or you might have taken on the role of general dogsbody and trouble-shooter. You’re wearing too many hats! Work out what you’re good at, what the most profitable use of your time is and do that.

A really good plan will help you lean towards the outcomes you want and attract the things that are going to be of most benefit to your business. If you feel yourself getting distracted, go back to the plan, put daily activities in your diary that are consistent with the plan and be disciplined in your approach to getting tasks done.

5 Money Making Strategies Even If You Think You’re No Good At Numbers

Before you do anything to do with money you may need to change your mindset and language about money. Start talking about money in the positive and drop the negative thoughts and feelings and words you use about money.

Stop telling yourself you’re no good at money and numbers and start telling yourself you’re on the way to learning more about money and numbers.

Then employ these 5 money making strategies to help you make more money.

1. Multiple transactions

If you say “Thank you and goodbye” to your customers after a transaction you may be losing one of the best opportunities to help your customers get more of what they really want – and put money in your bank.

Say “thank you and hello – invite your customers to join your community of happy clients so you can keep in touch with them.

2. Sell what makes money

If you have a range of products or services at different price points, think about this: top sales people will tell you that it often takes about the same amount of time and effort to sell one BIG thing than one small thing, provided you are speaking to the right customer. And if they want the small things why not bundle them together to make a big sale – think “upsell”. You won’t know unless you offer.

You might be spending too much time attracting small clients instead of going after the bigger clients. “Any sale is a sale” while technically correct, could be eating into your profits by not selling high profit items or discounting to get the sale.

Think bigger – around 20% of your customers would buy a higher priced item from you if you

a) had one

b) offered it to them.

Make sure you cultivate the top 20% of customers who love you and will buy your big ticket items.

3. Invest in assets

If you’re going to reinvest money back into your business DON’T “pimp your ride” buying pretty things or high tech things UNLESS they have the ability to make you more money.

Invest in people who can bring in more sales, technology to make it easier to collect money, systems that create more flow so things run faster and smoother and programs that identify the money you are leaving on the table so you can scoop it up.

4. Sell your ideas

If you sell tangible products or time for money services you could be missing out on leveraged money or even “money while you sleep”.

You probably know lots of things other people don’t know. It’s likely they would be happy for you to teach it to them either 1 to 1, in a group or an online automated program. Have you considered information products? E-books, e-classes, video programs, membership programs are easier than ever before to set up and run at minimal cost.

Use blogs, social media, email marketing and strategic partners to market and sell your ideas

5. Set money goals

Decide on the ACTUAL amount of money you want then get to work with a piece of paper or a spreadsheet to work out how you will achieve it. OR use the Income Generator Calculator tool.

For example your money goal might be an extra $100,000 in the next 90 Days.

Break the goal down into manageable chunks – if you sell a service, how many days will you be working in the next 90 days to sell and deliver that service. Let’s call it 44 working days to allow other days for running your business and days off.

Do the numbers
100000/44 = $2272.73 per day is your target.

The next question is HOW? How can you make that much money each day for 44 days?

Get creative – work out how many sales you’d need to generate to achieve the target then get to work structuring, marketing and selling to reach your goal.

5 common myths about small business that you should ignore

Everyone has an opinion. Everyone’s an expert – even taxi drivers can tell you how to run the country or give you hot stock tips.

Some of the most prolific business “advice” comes from family and friends – who don’t even have a business! And some of it is spewed out on the internet by self-styled would-be gurus. Maybe they know what they’re talking about, maybe not.

“You know what your problem is?” and “You know what you should do,” they tell you.

Some of it, a tiny trickle of it, turns out to be quite good, but the majority of it is urban myths and things people make up to justify their own actions or beliefs.

A word of caution

Don’t believe everything you read, see or hear – especially on the internet where anyone can be an expert.

With this in mind, you can also take what I say with a pinch of salt.  This has been my personal experience of being a business owner in multiple businesses for 35 years, and experience from working with business owners for 12 years.

Question what you read and test out these “myths” to see if they are true for you. You may need to shift your thinking a degree or two.

Myth #1

You can’t make a profit in your first year or two of business

If this were true then it’s possible that the business owner has put too much “infrastructure” in the business before they work out if they’ve

  1. Got a saleable product or service with high demand
  2. Got a good deep market for the product or service

One of the first things you should do in business is work out where the money is. Make sure there is enough profit to feed the machine and grow from there. Don’t waste money on toys and looking good.

People get despondent and give up when they realise they are not making any money. There has to be a payoff.

Myth #2

Grow your business so you can have a nice flash office

Why do people insist on making themselves look good at the expense of making the business work?

By all means have a nice flash office if it helps get you more business and it helps you deliver your product or service but do the numbers first. Don’t pimp your ride!

You have to make a lot of money to pay the rent – and other things – before you even think about paying yourself.

Think differently about how to run your business effectively without incurring too many expenses.

Myth #3

Home based businesses are not “real” businesses

If you think a home based business is just “playing” at business, here are the top 5 businesses that started from home:

  1. Amazon
  2. Apple
  3. Disney
  4. Google
  5. Harley Davidson

That doesn’t mean that you need to grow your business to global proportions if you don’t want to, but it can be a great starting point.

These businesses didn’t rush out and get flashy offices and all the gadgets they needed to start up. They kept it simple, started in the garage, had vision and kept at it.

Your home-based business could earn you millions without you ever having to move out. It depends on how you structure it and what your vision is. Keeping it simple and running it lean has huge benefits.

Myth #4

You have to get a business degree

Fortunately you DON’T have to get a degree to run a business.  It can be helpful, or not, depending on how you apply it.

Learning to run a business is like learning to ride a bike. You can’t learn it from a book. It’s not hypothetical – you need to get on and hold on, learn to pedal and steer, fall off, get up, work out how to go fast and when to slow down.

Learn as you go. Read some books, do some courses, find a coach or mentor, but APPLY what you learn and as Mario Andretti said “If everything seems under control, you’re not going fast enough.”

Enjoy the ride!

Myth #5

It’s good to go hard! Sleep is overrated

Oh no it’s NOT!

If you think you can sleep when you’re dead you might just die sooner than later.

You need the full cooperation of your brain and body to do your best at anything. An exhausted brain can’t think straight.

All the best business leaders have found a way to take time out, to relax, get the creative juices flowing and so can you.

Be realistic about what you can get done in a day or a week, stretch it a little if you need to and then be disciple enough to shut down and turn off to rest. Make it a regular habit if you don’t want to be constantly running on empty.

7 Client-getting strategies even if you think you’re no good at marketing

Let’s get rid of the head –trash first. Marketing is not difficult. Stop thinking of it as “Marketing”, start thinking “Getting to know the people you’d like as customers”.

Here are just 7 ideas – there are a million more, I’m sure.

The trick is to IMPLEMENT a strategy or two, don’t just passively read this then let yourself off the hook. Marketing only works if you work it.

1. Collaborate

Gone are the days of thinking you have to do everything yourself. There are plenty of ways to collaborate with friends and colleagues in business.

Organise a brainstorming session to work out what you could offer each other’s customers. Share your databases ethically – no spamming. How about putting together an irresistible offer as a package of products or services.

2. Work your network

Join a Meetup group, a business networking group or your local Chamber of Commerce. Immerse yourself in a group of proactive business owners to swap stories, strategies and ideas and give each other encouragement.

Get to know your peers and GIVE referrals before you expect them back.

3. Offer a freebie

You have information or product and services that other people want, otherwise you wouldn’t be in business.  While you’re out networking and brainstorming come up with ideas for “freebies” you could give to potential customers.

Can you give the equivalent of samples, taste tests, try-before-you-buy offers? Can you give simple yet desirable information in the form of checklists, guides, reports, whitepapers, PDF downloads, videos. The list is endless and it won’t cost you a fortune.

It could be a 1 page document printed from your office printer and posted or emailed out. Develop a library of useful freebies and every time you’re talking to someone listen carefully and offer to send them something irresistibly good that will help them solve a problem.

4. Co work

If you work in a home office on your own, find out what co-working spaces are available in your local area. Hire some desk space for a day or two a week and get to know the other business owners. You’ll soon build up your network of friends and colleagues.

Apply the Collaboration strategy with your new network.

5. Get your work out there

If you never had a stand at an expo, now is the time to give it a go.

Google what’s coming up, there are often national, international and local expos you can participate in. The big expos can cost several thousand dollars to participate but if you sell a high end product it can be very lucrative.

If at the lower end, often business networking groups and chambers of commerce will run business expos .

The secret with expos is not to stay behind a barrier in your stand. Go out and meet people, have a chat. If you’re on the shy side, get a friend to help you, someone who loves talking to people.

It’s also a great way to do a survey.  Make sure you have a way to capture prospective customer’s details – make an offer and put them in a draw for a prize or two.

6. Get some publicity

Make your business newsworthy. Find a way to link your products or services to something topical and send a press release to your local journalists in the press, radio and TV.

The media are always hungry for stories. Get to know journalists who are looking for stories like yours and consistently send them good newsworthy material. Always be ready to comment on an issue to be seen as an expert in that area.

7. Speak wherever you can

One of the best ways to get noticed and therefore get customers is to develop your speaking skills.

When you join a networking group you will be expected to speak at every meeting to introduce yourself and your business. You’ll get better with practice.

If you know how to do something others don’t then offer to teach them – preferably in a group setting. Use your networks, co-working space, chambers of commerce, meetup groups – anywhere you can think of to get more experience.

If you’re already an experienced speaker, try getting a little publicity and connect with people who need speakers. If you think about the thousands of conferences, industry expos, networking events and boardroom “lunch and learn” meetings you’re sure to find something that fits well with you.

Good luck, let us know how you go and feel free to share your own ideas on ways to get customers.

The best ways to grow your customer database without spending a fortune

Size. Isn’t. Everything. When it comes to a customer database, having thousands of thousands of people on a list doesn’t mean anything unless you have a relationship with them.

So don’t go getting all scammy and spammy with the latest tricks to build a list of people who are not now, or never will be, your ideal customer. You’ll find no joy there.

A small intimate responsive database can be a beautiful thing and it’s really enjoyable to serve those people by offering them interesting relevant information, intriguing offers and genuinely helpful content that they can’t wait to receive. Develop a “No Junk Mail” policy when you contact your database or they will bin you for wasting their time.

Here’s how to grow your list without resorting to sneaky underhanded tactics.

You cannot just put someone on your list because they gave you their business card – you’ll need to ask permission. But better than that, have a real conversation with the person and offer to send them something helpful – and NO that is not your brochure or catalogue unless they have specifically asked for it. It might be a newspaper clipping or a referral to your dentist or a great website you discovered. It can be anything as long as it is helpful.

If you were clever you’d be building a bank of your own useful information to share.

Here are a few favourite places and ways to find the best people to add to your database:

  • Networking events and industry groups – local chambers of commerce are a good place to start.
  • Business networking groups – go regularly and make friends. Get to know these people, they are your best referral sources and there are things you can help them with too.
  • Meetup Groups cost next to nothing – choose carefully before you commit the time but you will definitely meet people – even if it’s a walking group.
  • Attend workshops and chat to the people you meet there. There are plenty of low-cost- to- no-cost business seminars out there – and you’ll learn a thing or two as well!
  • Online in social media groups – find groups with similar interests to yours and start contributing. But don’t sell unless the rules of the group say you can – it’s SOCIAL – no-one likes a pushy person who is always selling.
  • On holidays, at the shops, in elevators, at the beach – start talking to people – you’ll be so surprised at the connections you can make.
  • Have a lead capture form on your website – offer something they consider valuable and highly desirable in exchange for their contact information. It might cost you nothing.
  • Do direct response marketing – everything you put out needs a call to action to get the person to take some action i.e. contact you for that highly desirable “thing” – not the super big things, just a little taste test. Why do you think supermarkets offer free samples of something yummy in the aisles?
  • As people to share your content, your business cards, your highly desirable offer, let it go naturally viral. If you are in the women’s market you have inbuilt viral marketers. They will naturally tell friends when they find something of value.
  • Get over your nerves and learn to speak in public – give talks and presentations. When people see you as an expert they’ll give you their contact details to get more of what you have.

We’ve just scratched the surface.

You’re only limited by your imagination. Get together with a group of other business owners and brainstorm this – there are hundreds more answers. Then put the strategies into action and hold each other accountable to getting results.

Best of luck. Let us know how you go. And if you have a unique way of adding genuinely interested people to your database, we’d love to hear it.