A Strategic Way to Move Your Business Forward and Make More Money
I have had the privilege of joining forces with Rick Arthur a number of times over the past few years, combining our skillsets to transport businesses through one obstacle or another. Paramount to solving issues, these business owners want to make more money and are willing to explore, plan and implement the actions that will move them forward. While perhaps not a science, Rick and I do have the process down to an art form.
First, we start at the highest level, identifying opportunities for the business to either increase revenues or reduce costs, and determine where to focus our energy. This approach demands that we take some time to understand where our clients sit today. There is a saying, “If you don’t know where you are, a map won’t help.” This is certainly true in our line of work! We look at how the company is doing, review revenue attainment reports, and evaluate expense management.
Once we identify which area to focus on first – let’s say it is revenue attainment – we then explore how the following changes might affect business:
- Raising prices
- Focus on selling more profitable items
- Acquiring new customers
- Maintaining a loyal client base (It’s less expensive to keep existing customers than to acquire new ones.)
We then determine which of the above is a Critical Success Factor and develop SMART goals, strategies and actions to make it happen. We need a plan; without one our clients are doomed to either fall short of their desired destination or leave a trail of bodies behind.
Our next step is to identify the root cause of the obstacles our client is experiencing, which are the source of their pain. We explore the sales process, people and technology issues, and process breakdowns to name a few.
I love the saying, “If all you have is a hammer, everything looks like a nail.” That is, we don’t always see things clearly when we rely too much on one particular tool, mindset, or method. Instead, when looking to make improvements, we must look at ways to implement true, strategic, long-lasting solutions that might be outside of “how we’ve always done it”. This approach may take some investment both financially and timewise; but Rick and I help determine how this investment will affect revenues, profits and cash flow.
Next, we follow a similar line of investigation to explore Decreasing Costs. We ask questions such as:
- What can we do to lower fixed and/or variable costs?
- Can we reduce some of the recurring costs, such as rent or insurance, maybe taxes?
- Can we reduce the costs per unit sold or per employee?
These are pretty straightforward analyses and are often obvious places to diagnose. But we also make sure that in doing so, we don’t affect quality, time to market or capacity, if they are critical to the company’s success.
Trickier, is determining if we can eliminate inefficiencies, waste, rework, etc. This analysis may require some process expertise. We have found that an outside set of eyes will often see things that owners and management might miss. As Trusted Advisors ourselves, we have access to a wide range of disciplines through other Trusted Advisor resources. When the need arises, we offer to introduce them in order to determine if there is a good fit.
Business owners can’t simply hope to make more money; they need to roll up their sleeves, determine what must change to better the bottom line, and then address those things first. This allows us to start along the path towards lasting change. By joining forces, Rick and I offer our clients a well-rounded approach – looking at the problem, identifying opportunities, and helping the business owner implement sustainable solutions for success.
Guest blogger, Bob Dodge, is a Trusted Advisor, Coach and Facilitator for Denver Metro business owners and is an owner of TAB Denver West, a franchise of The Alternative Board. Bob has worked with very large and small firms locally, nationally and internationally. He leverages his vast experience in sales management, process improvement, change management and leadership to help entrepreneurs grow their businesses.