Six Reasons To Systemize Your Business

Six Reasons To Systemize Your Business

Businesses that have great systems tend to excel while those who lack systems struggle. Here are six reasons to systemize your business.

Progress –   You can measure your progress. Sure, money coming in is one measure. But what if you could also figure out how to measure how other operations? How are things coming with that next big ad campaign, or the development on a new ancillary product that will enhance your main product? With proper systems you can do a quick check on operations any time you like and get real-time data on what is going on.

Efficiency –  Little things get done on time. Without some basic plan for each day, the little things that keep operations going can build up and eventually create a bottleneck. For example, are the postings on the Accounts Receivable and Payables being done on a regular schedule? If not, you could find yourself with a lot of work to do when it comes time to cut paychecks to employees or calculate your taxes for the current period. An organized system helps to ensure you don’t run in to situations where your back is to the wall and you drop other tasks to play catch-up.

Saves Time and Money – Systems ensure quality and consistency in product and service delivery. When you lack these traits, you spend valuable time and dollars rectifying issues. If you are systematic in your operations, you will reduce call backs, returns and lost customers. This frees you up to develop new products and services or market to new customers.

Growth –   When your business is systematic in its operations and functions, you can spend time in networking activities that help grow your business. You’ll be able to devote an afternoon submitting online ads, sending promotional emails, or even promoting your business locally at Chamber of Commerce events. Best of all, you can spend your time on these endeavors knowing the company is moving right along without your direct attention for a few hours.

Planning – Systems can reduce planning time and create more effective processes. When you systemize operations adding additional projects, departments or employees is simplified. You have an established framework and process to use as an example.

Personal Time –  You can take time off. Wasn’t getting control of your time one reason you wanted to set up a business? If you systematically organize your business, you can take time off for your son’s Little League game, or your daughter’s dance recital. There is also the chance you can even take several days off to take a short vacation if you like. Best of all, you can do this getting no permission or approval from anyone else, and your business will continue to move forward in your absence.

Lead Generation – The Beginning of the journey

Lead Generation - The Beginning of the journey

In my last post I discussed a way to determine your gross revenue targets and the number of sales and sales leads needed monthly to achieve those targets. Knowing this number is critical, but it is even more important to understand how to generate those leads. Whether you are a service or product related industry you must have a continuous flow of leads into your sales funnel.

What is a sales funnel? The picture at the top of this post is of a sales funnel. Anyone who is doing business has one – they may not know it or understand what it is. As you can see from the picture, the top of the funnel is the entry point and is the act of bringing awareness to your service or product. Each time you make someone aware of you or your products you are generating a lead and placing them in the top of your sales funnel.

Once in the funnel you should begin the process of educating, nurturing and converting the lead into a customer. Some will convert while others will drop out.  There are many factors which determine how many turn into customers and how many drop out. These range from the quality of the lead, to product match, price, quality of education and nurturing etc. etc.  But if you cannot educate them, share price with them or show product fit you have zero. So it all starts with lead generation.

Anybody can set up a business. You can take care of all the legal paperwork, licensing requirements, get business cards made, a phone number etc. and presto you have a business. The problem is unless you are generating interest and converting that interest into sales you will not be a business for long. Leads and the corresponding conversion of those leads into buyers is the lifeblood of any business. Yours included!

There are a lot of lead generating methods. Selecting the right ones can be challenging. Some may fit a particular industry well, others may fit your personal skill set or knowledge base better or some may provide the best ROI. You should consider these factors when developing your strategic lead generation plan. I break them down into three categories.

1–Traditional offline–this includes print, radio and tv ads, and direct mail.

2–Traditional active–this includes trade shows, conferences, live events, telemarketing and referrals. As you can see in these methods, you are actively soliciting or engaging prospective buyers while in the traditional offline methods listed above you develop an ad and wait for people to respond.

3–Online–online lead generation is the broadest and most complex category. This includes e-mail, social media, content marketing (blogs, webinars, infographics, memes, videos, white papers etc.), online directories, rating sites like Yelp or Angies list, website/SEO, PPC (pay per click) or AdWords, Facebook ads, affiliate marketing, etc.

Is your head spinning yet? Deciding where to put your resources can be overwhelming. It freezes many business owners in place because they lack the expertise to decipher all this information and are afraid to use resources on the wrong thing. Other business owners will dabble in many areas just hoping to hit on something that works.

Successful businesses select a few methods and focus their available resources on those methods. They are careful to measure the results and ROI and refine the methods that are working. They replace the methods that test out poorly and select new methods for testing. The goal is to find the most effective means to bring in the required number of leads to hit your revenue targets. As you find success you can begin raising your revenue goals.

So ask yourself the following questions: What methods are you using to generate leads? Are they producing sufficient numbers? Can you improve your numbers using current methods? Can you expand and use additional methods to generate more leads?

In next several posts we will look deeper into the various methods and how to use them.

Click here to read prior post.

How Defining Numbers Can Drive Profit How Defining Numbers Can Drive Profit

I am surprised by the number of small business owners and solopreneurs that cannot tell me what their annual revenue goals are. This number is critical because it sets the parameters for all your other planning.
Let’s look at an example of how you can use this number to plan out your year for success:
Joe owns a service company–he knows his overhead and taxes are 40% of gross revenue. He also knows he needs to net $7,000 per month to pay his bills and maintain his current lifestyle. So he starts with $7,000 x 12 and then multiplies that by 140% (this equals $117,600 so he rounds that number up to $120,000). Joe now knows he needs to have a gross revenue of $120,000 this year.
But this number is just the starting point. For simplicity reasons, we will assume that Joe’s business is steady throughout the year. In other words – he does not have seasonal ups and downs. So Joe’s next planning step is to divide his gross revenue by 12 (months). Joe determines he needs to have gross revenue each month of $10,000. His picture is becoming clearer.
The next thing Joe needs to know is what his average sale/service job is. Looking at his numbers Joe sees that his average sale is $500.00. Now Joe can divide his $10,000 figure by $500.00 and he gets 20. Joe needs to average 20 customers per month to reach his gross revenue figure of $10,000.
NOTE: if you operate in billable hours the principles are the same -how many billable hours do you need to reach your target.
Joe’s next step is to figure out his conversion rate for prospective clients. How many potential clients turn in to actual clients. Again to keep things simple lets say Joe’s conversion rate is 50% (a good number). Now if Joe knows he needs 20 customers and his conversion rate is 50% he can figure how many prospects he needs to see on a monthly basis. In this case Joe needs to see 40 potential clients to close 20.
Now that Joe knows the above information he can track his business progress more effectively. Is he closing 20 customers a month? If not what is the problem? Is he seeing 40 potential clients? Where is he getting the majority of his prospects? Can he increase that? Does he need to increase that?
The answer to these questions will help you put your business into high performance mode. In my next post we will begin to look deeper into these.