Are you struggling to attract more new customers to your business? Do you have a great product or service, but aren’t sure how to let prospects know about you? Do you see your competitors growing and wonder what they are doing to be so successful (even though you know their product or service isn’t nearly as good as yours)?
Chances are you may be making the following mistakes in your business …
Mistake #1
These days too many business owners are throwing their advertising dollar down the toilet using out-dated recruitment methods and using boring old ads. And, then they wonder why they’re getting the wrong response!
Franchising is a great business system, one where you combine a great system for running a business and producing a profit, with great people who have an equity interest and thus will do a much better job. That said, it doesn't mean every company on the planet is able to be franchised, or franchised well.
So, here are the top eight things to consider if you're thinking of building or buying a great franchise …
1. How many other same type franchises are out there?
Chances are if there is a lot of competition, two things are present, the best 'sites' are taken and when you are looking to sell a franchise they will compare you with every similar company.
2. How many people want to buy a business in the areas you are trading?
Franchising is a great business system, one where you combine a great system for running a business and producing a profit, with great people who have an equity interest and thus will do a much better job. That said, it doesn't mean every company on the planet is able to be franchised, or franchised well.
So, here are the top eight things to consider if you're thinking of building or buying a great franchise …
1. How many other same type franchises are out there?
Chances are if there is a lot of competition, two things are present, the best 'sites' are taken and when you are looking to sell a franchise they will compare you with every similar company.
2. How many people want to buy a business in the areas you are trading?
They say the three most stressful times in a person's life are when they get married, buy a house and change jobs. Well, try selling a business - It's your baby, the thing you have built over 15 years. You have put your heart, soul and an incalculable number of hours into it. Now you are going to sell it.
There are many things you need to do and consider, but these seven areas are of immense importance when it comes to finding a buyer, selling the business and getting the most value for it.
1. Think about who would want to buy your business:
Do you have employees that have the management ability and the mindset of an owner and the ability to access capital to pay for the business? If these people aren't working for you now, do you have time to recruit them and teach them the business with an understanding that they might take over? What about your suppliers, customers or competitors? They might be looking for an opportunity to enter your part of the industry.
Finally, you can go to the general market. Contact a broker that has experience in your type of business or advertise it yourself through the classifieds.
2. Remove Yourself from the Business:
Many businesses are based around the owner. Customers are used to dealing with you. Suppliers have long relationships with you. Your team trusts you. All these relationships need to be transferred to your other staff or the new owner.
Start planning early!
3. Setup the Business as if you are going to Franchise it.
Who wants to buy a business that relies solely upon the current owner - the person who wants to sell and walk away from the business?
A well-systematized business is attractive to prospective buyers who see the potential to own a business that runs smoothly using systems and, importantly, can run without their personal input.
A business that can be run under management attracts a premium price when it comes time to sell.
4. Lock in your Senior Staff - The most Important People in the Business:
If your senior staff aren’t in a position to be buying the business, you need to lock them in some way. Best thing to do is talk to them and keep them fully informed.
Keep them up-to-date with developments in the sales process and make sure they understand where they will fit in after a successful sale. Consider introducing bonuses contingent on a successful sale.
5. The Customer Database - Your Pot of Gold:
This is what will add value to your sale price. Think about it from the buyer’s perspective, they are buying a business that with the hope that the customers continue to deal with them.
By developing a detailed database of your customers you will be giving them more confidence that they can manage the client relationships after you have gone.
6. Formalize Everything - Agreements:
Get all loose agreement in writing. Start with your employment agreements. Develop up-to-date agreements that lay out the terms and conditions under which your staff are employed.
Put agreements in place with your suppliers and customers as well. These should include trading terms, pricing contracts and any other “verbal” arrangements.
7. Ensure you have the Best Looking Financials:
You should aim to be able to show three years of constant growth, with healthy-looking financials. Clean up any personal items that could be questionable as business expenses - this will improve your profit figures.
Clear up all outstanding debtors - this will improve your cashflow figures. Reduce any excessive spending and make the business look as profitable and attractive as possible.
8. Get a Business Coach to give you an Outsider's Perspective:
Clients often come to me looking for someone outside the business to assist them with the eight steps above. They are GREAT business managers, but may never have been through the business sales process before.
An experienced business coach will not only provide you with advice to keep you on the right track, but also the motivation and confidence to see the project through.
Many people wake up one day, fed up with their business and then hurriedly attempt to sell it. This doesn’t work. Plan it two to five years in advance so that you get the best outcome.
Follow the eight steps above and you will be rewarded for the many years you spent building your business.
Whenever we are looking to improve our business we look at a number of areas and often start at looking to improve sales or marketing or our employees or improving our production, I believe we should look at ourselves first.
To improve your business you must take the following steps:
1. Values and purpose
2. Vision and Mission
3. Goals
4. Plan
5. Take action
Values and Purpose.
What are your personal values, if you are not sure you must find out, the best way to find out is to spend some time by yourself and ask the following questions, what do I want my family, friends, community, employees (team members) and customers to remember me for, what do I want them to say about me.
When you have done this write them down and prioritise them and read them often.
What is your purpose in life is the next question, why am I here, why do I do what I do, once again spend some time thinking about this and write it down.
Goal setting is as important in personal life as it is in business. The most common denominator in all the self-help literature and books is the importance of goal setting. We’re told to set long-term goals, short-term goals, lifetime goals and personal goals.
The benefits of Specific, Measurable, Achievable, Results orientated, Time-framed (S.M.A.R.T) goals have been written about in self-help books for years. So, it follows that goal setting is obviously a powerful process.
It is about ‘eating the elephant, one bite at a time’ and of turning vision into achievable, actionable things. It’s the common denominator of successful individuals and businesses.
Despite their obvious value, our experience with goals have shown that some are good at setting goals and sticking to them, achieving great results and others can’t keep a New Year’s resolution to stop smoking for two days in a row.
Failure to set goals can be seen as a fear of failure. That is, the blow to our integrity when we don’t reach our goals. When we make and keep commitments, such as setting and achieving goals, it reflects the amount of trust we have in ourselves.
We increase our confidence in ourselves to make and keep commitments to others and ourselves. However, when we don’t achieve our goals we lose confidence in our ability to make and keep commitments and to trust ourselves.
There are many reasons why we don’t achieve our goals. Sometimes the goals we set are unrealistic. New Year’s resolutions are typical examples. Suddenly, we expect to change the way we eat, or the way we exercise just because the calender changes.
It’s like expecting a child that’s never ridden a bike to suddenly jump on and go, or to run a marathon without months of training. These goals are based on illusion with little regard to natural growth. You must be able to crawl before you walk.
So, how do we set and achieve goals? Stephen R.Covey says it best in his book “7 Habits of Highly Effective People”. To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.”
An example of a S.M.A.R.T. goal might look something like the following.
WHAT
My goal is to maintain a healthy body.
WHY
So that:
I can be fit to do the things I enjoy.
I can be an example to my children in health management.
I can build my personal character strength
HOW
Good Nutrition. I will increase my intake of fresh fruits and vegetables and decrease my intake of sugar, fats, salt and red meat.
Physical. I will exercise aerobically 3 times a week for 30-minute periods.
Focus. I will be aware of my body and look out for any health problems.
Focusing on the smaller, short-term goals and achieving success will give you the confidence to set other goals. So, remember, set your goals based on the S.M.A.R.T. principle to have the best chance of achieving your goals.
Business is all about making a profit, so if your business strategies aren’t adding up to business profits, don’t do it, or do it differently.
To be a business – that is, ‘a commercial, profitable enterprise that works without you’-your business must give a good return on investment plus a full wage for every hour you spend working in your business. You can then pay someone to do your job and the business profits are not affected.
The quote ‘if it doesn’t add up, don’t do it’ can be applied in all areas of your business. Advertising is a prime example. If an ad is run and does not get an immediate response, there is no point in keeping that ad running. It is wasting precious time and money. Change the ad or where it is running.
Increasing your team must also add up in dollars. Perhaps a business should consider setting training and operating systems in place so juniors can be hired to follow the systems, rather than hiring seniors who have the head knowledge of how it should be done.
Alternately perhaps the business should look at new machinery or technology instead of more team members.
If you want to buy a business the figures also must add up – or have the potential to do so.
Make a list of the criteria the business must fill and make sure this list is filled before you commit yourself. Many people buy into something believing it would fulfil their needs, to discover the figures were inaccurate or did not add up. If you are not sure, get help. Two heads are better than one, and prevention is better that cure.
A great idea when looking at a business is to check the industry average and see how your business compares with the average. Given that four out of five businesses go broke in the first five years, you may want to be better than average.
Finally the bottom line where your figures must add up is in net profit margin. To get this figure a business must add all expenses, including an appropriate wage for all the hours put in the business plus interest on the capital you put into the business. This will give your real margins.
‘If it doesn’t add up, don’t do it” must be applied regularly. Don’t wait until the end of the financial year to find if you have made a profit. Business is work, but it should also be fun.
When business performance needs to be improved it may well be wise to start the improvement process by first exploring the source of the leadership in that business. From my coaching experience I have found in many instances, that where a business is not performing the leadership direction is unclear and is not understood by the team.
Leadership is about painting a current picture of the future in the form of a vision. The common thing in all of the great leadership stories of the world is the ability to create that vision and then be able to share that vision with the people.
Leadership is a powerful creative tool and when embraced by business owners, has immense impact on the success that can be obtained in that business.
Managers in corporations have been guided by this concept for some time and for ‘tomorrow’s leaders’ the following has been written.
“Every executive, every manager, to fulfil the role, must have a vision – a vision of where the organization will be and what it will look like in the future.
They must create that vision and then share it with those reporting to them, if they are to gain a high level of employee involvement and commitment and attain a high level of productivity”
Anon
So it is in business. To succeed, the business owner must paint the picture and be willing to share that vision with the team. It is from this beginning that so many success stories have evolved. It is in the absence of this beginning that so many businesses have failed.
Who is driving your business? It is in this area of business development that the small to medium size business owner will be challenged when the future direction becomes unclear because of rapid and continual changes occurring within the market place, and the speed of the change generated by the technological age that we live in.
There are some things in life that are supposed to be really complicated; being a parent, learning how to invest and running your own business. When you look at all of these things nothing could be further from the truth.
Parents are taught by their children, investors are taught by their experiences and business owners should be taught by a mentor.
Often when I look at businesses it is clear that the owners have given up trying to improve their lot in life because they think that it is too complicated an issue to generate more activity. They think they need to be Einstein to invent some radical new way of doing business.
