Chartwell News
No one can deny that to grow your business, you must attract new potential customers (or leads). It’s how you generate these leads that’s important though. STEP is a lead generation acronym to help you generate quality leads without pointlessly blowing your marketing budget: S = Strategy T = Target E = Efficiency P = Process
Key Performance Indicators (KPIs) are essential to measure the performance of your business in order to grow your numbers. Of course, the measures themselves are pointless unless there’s reflection and discussion to ensure they’re met. Here’s a simple and effective way to link KPIs to a reporting and accountability framework. Firstly, make sure there is ONE leader for each of the departments in your business: Director, Leadership, Product / Service Development, Operations, Marketing, Sales, Finance, HR, and Admin / IT. One person can lead more than one department, but two people can’t lead one department. You can also contract out departments to avoid needing a large head count of team memebrs (finance, marketing and IT can be outsourced relatively easily). Be clear on who reports to who . One person can only manage 5 or so people effectively. Consider establishing teams with team leaders to enable you to achieve a ratio under 6 to 1. Set up regular department meetings . This may be the CEO with each of the other department heads, the Operations Leader with the Operations team (if less than 5 in the Operations team) or with the Operations Team Leaders (if more than 5 in the Operations team).
One of the simplest ways to grow your bottom line is to tighten your belt and spend less.
Have you ever done the maths on your average spend per customer? That is, how much your customers spend (on average) each time they buy from you. Simply take your total sales for any period (e.g. 12 months) and divide this by the total number of transactions or invoices for that period. When you know your average transaction value, you’ll start to see the value of getting your customers to buy from you more frequently. If only 50% of your customers buy from you one more time per year, your sales will increase significantly. Consider the example of a house maintenance business that does window cleaning, house washing, and gutter care. Imagine the business has 500 customers and turnover of $130,000. There are 460 invoices for the year so the average spend per transaction is $283. Some customers are vigilant about getting their house and windows washed and others leave it until the mould and leaves in the gutters are causing leaks. If you are able to get one more transaction per customer per year, then sales will more than double (500 customers x $283 = additional turnover of $141,500). More importantly, you will be able to prevent an unmanageable flood of job requests after each rain storm!
The endless pursuit of new customers to grow a business often distracts us from looking after our existing ones. This pursuit can unintentionally cause a downward spiral. Spending more on marketing, while neglecting existing customers (and their sales needs), can put pressure on pricing. This can lead to a reduction in prices or a change in product mix, resulting in less sales and the apparent need for more marketing… so the spiral continues. This is not the answer.
Measuring your sales and margins provides insight into which parts of your business are performing well and which ones need improvement. With improved margins, you don’t have to generate as many sales to get the same profit. Better still, lift your margins and achieve higher sales; you’ll get even more on your bottom line!
The statement of cash flows, (also known as the cash flow statement), shows how your business has generated and used cash (and cash equivalents) within a specific time period. For each of the reporting categories, receipts and payments are listed (money in and money out), and this is reported as a net increase or decrease in cash held for that category. The net change in all categories is added to the amount of cash on hand at the start of the reporting period to arrive at the current cash on hand figure at the end of the reporting period. It is another important financial statement to understand in conjunction with the Profit and Loss statement and the Balance sheet. These three reports provide a good understanding of the financial position of your business.
Founding, managing and growing a business is a BIG commitment. For most business owners, it will take years to build a customer following, turn a profit and create a truly scalable business. It's a journey that can sometimes be pressurised, stressful and risky. – But when your plan really does come together, there is the chance of real success, a lasting legacy and a business that delivers on your initial dream. So, how do you know when you've truly achieved your goals for the business?
Access to additional funds is what allows you to invest in your business and grow the company. But to be able to borrow from lenders it’s vital to have a good business credit score. So, what is a business credit score and how is it calculated? And what proactive action can you take to improve your all-important credit profile
“Loyalty is when people are willing to turn down a better product or price to continue doing business with you” - Simon Sinek. If customers are unhappy, they’ll leave you for one of your competitors. If they’ve had a poor experience or been treated badly, some will go as far as making a scene on social media or leave a bad business review to warn others. Customer satisfaction is important to any business, but the earlier you are in the growth of your business, the more critical it is to ensure that your early customers are highly satisfied. When you sign up your first customer, that person represents 100 percent of your customer-base, so their opinion of your business, along with the next handful of customers matters greatly. Think about your early customers and who these people are. If they’re still known to you, you should be proud that they had faith and were one of your earliest customers who backed you.