Inspired By A Simple Conversation With A Good Friend

It has been quite some time since I last wrote in this blog. I have a number of reasons . . . but they are all excuses. And although we all think our reasons are "valid", I don't want to disrespect you or waste your time by pretending they are justified. Suffice it to say that I let life get in the way.

If you are coming back and enjoying my blog again after my long hiatus, Thank You. I appreciate the second chance.

Or if you are a first time reader, I hope you enjoy.

Either way, I hope to incite some conversation about business and life. And I look forward to engaging with you through discussion and generating new and insight methods to deal with the struggles that we all face in both our business and in our every day lives. And even more so, I hope that I can show that as much as we all try to separate the two, Business and Life, the two are so closely related, that it's often hard to tell where one end and the other begins.

So, without further ado, let me get back to blogging . . .

I had an interesting conversation with a good friend of mine yesterday about a simple concept that I've written about before, but I think warrants new light to be shown on the topic.

You can't manage . . . or improve consistently, what you don't measure.

What do you truly want to change in your business or in your life? When it comes to your goals, what do you want? Where would you like to be tomorrow . . . next month . . . or even next year?

If you are you thinking from a business perspective, you might be looking for more sales, more new clients, decreased costs or maybe more market share?

Or maybe your goals are more personal in nature. More income? Weight loss? Healthier lifestyle? Lower cholesterol? Or maybe a better education?

What would make you happy?

Time and time again, the more I live, the more I see a pattern . . . if you set and commit to a goal (a specific, measurable goal), measure your progress consistently over the entire time span of the goal, you can't help but begin to see improvement, towards the goal, if not complete fulfillment of that goal.

Are things going to change right away? Absolutely NOT!

But they will change. Not because of something magical that happens when you set and measure goals. No, life doesn't work that way. Things change because YOU will start making a difference in the way you behave - you will begin to change the way you behave, if for no other reason because you will get tired of facing the failure each and every day of not improving.

Will you get it right the first time? Possibly, but not always. You will have to "adjust fire" (as the Army likes to say - correcting for missing the target on the first shot), but if you are measuring and you have defined goals, you will be more likely to find the combination that gives you the best opportunity to be "more right" with each subsequent change.

Why is Goal Setting and Measuring Results So Hard?

Unfortunately, in spite of the simplicity of these ideas, we still struggle. In fact, what we all, as flawed human beings, tend to do is to say we want something, and then NOT put into place the systems we need to make sure we actually to ensure our success.

We do this by:

1. Not measuring what we want to improve. We leave our goal nebulous and random so that we can make growth towards that goal COMPLETELY at our emotional whim. If we feel good about what we have done, we say we fulfilled our goal. When we don't feel good about how we are doing, we say we failed. Either way we move on - forgetting (intentionally or unintentionally) what the original goal really was in the first place.

2. Not measuring "interim results" or "the process". Sometimes the end results are a long time coming - or just plain difficult to measure. When this occurs, it's important to set up measurements that are either direct inputs into the results you want, are by-products of your achievements, or are associated with the process you are going to take toward your desired goal. In cases like this, we know that if we follow a process, record the progress (as small as it might be) and measure our consistency, we will see results.

3. Giving up at the first sign of failure (or we don't put into place systems / methods for correcting our mistakes, when the growth doesn't occur as we expected it to occur). This is the number one cause of failing to reach our goals. We set a goal, start down the path to make it a reality, and then give up at the first sign of failure - or we think that since things are going as well as we had hoped (i.e. perfectly) then we just aren't meant to have what we want.

I know these all sound silly to read, but everyone I know and ever spoken to about success, including myself, has seen each and every one of these - at some time during their lives. And if you are honest with yourself, I suspect you will find each of these three struggles in your life too.

Keep It Simple

As simple as the struggle may seem, in my opinion, the solution is ever easier.

Stop over thinking things and keep it simple.

If you want to create a change in your business or in your personal life:

- DEFINE IT. Write down your goals and face them every day. Don't think because you said them once or thought about them, that you will actually remember them as you go about making decisions each and every minute of the day.
- MEASURE IT. Measure daily how you are progressing towards your goals - either directly or indirectly through a process or series of related steps.
- DON'T QUIT. It's inevitable - something will happen that you didn't expect or plan for and you will feel discouraged. No goal worth having doesn't involve some hardship along the way. No matter what the cause of your struggle, stay focused on what you want and make it happen in spite of the setback.
- MAKE ADJUSTMENTS until you find the right answer. There is a path to each destination - some are easier to find than others. If your first path didn't work, figure out what didn't work for you and make corrections so that you don't make the same mistake again.

------

So, let me ask you, "What things do you want to change in YOUR BUSINESS or in YOUR LIFE?"

Are You Making The Most Of Your Time and Money?

We all have a limited amount of time in the day. And we also don't have a bottomless pocketbook.

We all know that . . . far too well.

Most of my clients tell me that if I could just get them an extra 4 hours added to the day (a 28 hour day) and 5 more clients per week, things would be perfect.

So, let me ask YOU, would 4 more hours in the day or 5 new clients really help you?

Do you think you need more time and money?

Or do you think you need to better manage and even leverage the time and money you do have first?

In my opinion, most people will fill the void with whatever they are doing. It's not a matter of having more time or making more money - in most cases. Instead, it's a matter of knowing where to spend you time and money to get the most bang for the buck - it's all about leveraging.

Leverage, as we are talking here, is defined as "Positional advantage and or the power to act effectively". So the goal isn't just to figure out where you can apply your efforts and / or money to create the improvement, but instead how to generate the best advantage or biggest change for the least amount of your effort.

Measure, Analyze and Modify Regularly To Make Constant Improvements

Measuring and analyzing will tell you where you should invest your time and money to yield the biggest bang for the buck.

If your sales are falling, most people will spend more time (and money) to generate more leads. They will commit their efforts to more marketing. But what they don't know is that they may already be getting enough leads. In fact they "may" already be spending more than they need to. In these cases, their leverage point isn't lead generation, it's lead conversion.

Through diligent measurement and analysis, they might see that their sales aren't down because people aren't finding them - their sales are down because their sales staff is lazy . . . or inconsistent in their approaches.

If they could simply increase the conversion rate of leads to clients from say 5% to 10%, this would double their sales.

Conversely, if they blindly just tried doubling their marketing efforts, they might find that they are spending a whole lot more time and money to get the same results.

Or, if their conversion rate is already high (above 60-70%, depending on their industry), then they may in fact need to find out which lead sources are working best (and which ones aren't working at all) and try to increase the volume through that lead source.

This might cost some money, but it would sure beat spending marketing dollars on leads that you KNOW aren't going to buy.

We need to think about all of these things - not just in sales, but in life. When you look at "what's not working" and "what is working", it's important to know which things provide the best leverage point for you to improve your life and which ones are just time consumers and money pits.

Another Example of the 80/20 Rule

They say that 20% of effort, yields 80% of your results - if you could increase your 20% to 25% and get 100% results, then you could take the other 75% of the time off.

Conversely, if you increase your 80% effort (that yields 20% of your results) to 100% effort, you will still only be getting 25% of the results, and you will feel completely useless and wonder why things are working out for you.

So, which would you rather have, 25% effort meeting all of your goals? Or 100% effort where you only achieve a quarter of your goals?

Your choice, but my lazy butt would rather do less and get more.

Build Systems and Empower Employees

Don't keep everything in your head and try to do things "off the cuff". Clearly define jobs descriptions, expectations and processes within your business - the principals, boundaries and guidelines that represent the company, its employees and its practices. Without these explicit words, a company can be easily taken advantage of, be distracted from its goals or simply get caught chasing its own tail all day.

Additionally, the real competitive edge in the next decade is knowledge and learning. Your team can only help you when they know and understand what the problems are - so share. . . everything. You'd be surprised where some of the best ideas come from.

Long term success in today's very competitive marketplace depends on many things, but two of the most critical elements are delivering consistency in your market promise (your product) and maximizing your most valuable assets - your employees. Both of those involve the implementation of writing guidelines, building systems and sharing everything with your employees.

Write guidelines. You might ask, "Why should I spend the time doing this when everyone in my company already knows what they are supposed to be doing?"

Why?

Because you can't afford not to.

I recently got that response from a client - not vocally, but I could read his body language - the rolling of the eyes. He has run a company for years where he hires specialists - already trained in the expertise that he needs. Surely there was nothing that he was going to provide them they didn't already know. Hire them, pay them and make sure they have what they need. And besides, I was asking an awful lot of him. It would take him a long time to write a operational handbook that gave his employees guidance on how he does things in his company. So, why should he?

The reason is simple. His customers, as well as almost every consumer out there, want to know what they are getting when they spend their hard earned money for his services. But that's not all. They want to know, each time they come back that they are going to get the same consistent level quality they got the first time. And just as important, they want to know that their friends and family, that they recommend you to, will receive the same consistent level of quality.

So, how do you make sure that each and every time your customers shop in your store, eat in your restaurant, hire you to perform the services you specialize in, they get what they were expecting - the exact same thing they got the last time they purchased from you? You got it - write guidelines and build systems.

Build systems. A system is, by definition, a group of interacting, interrelated, or interdependent elements forming a complex whole. Your business, no matter how large or how small is a system - a series of processes and people interacting to accomplish a mission - your company's mission. It's a system, whether you like it or not. The question then . . . is how well do you optimize your systems?

Building systems is about running your business "on purpose", not by luck. It's about following a few simple steps: Standardize, Measure, and Innovate (repeat forever).

- Standardize: The "systemization" process begins with making sure that everyone is doing the same thing, the same way - standardized. Everyone is using the same guidelines - whether those guidelines relate to creating your product, purchasing from suppliers, selling, managing, or cleaning the floors.

- Measure: Measuring comes down to quantitatively tracking what systems are working and which ones aren't working. It's taking an honest numerical (if possible) assessment of the current reality and comparing it exactly to what you want it to be.

- Innovate: The final step in the process (until it begins all over again) is innovation. Up to this point, you've standardized, and measured the outcomes, next, it's time to make improvements to the processes. It's time to answer the question as to whether or not you can improve the process, ever so slightly, and implement those changes.

Share Everything and Empower Your Team. As you begin to innovate, you will inevitably find that you don't have all the answers. You can't - simply because you can't be everywhere in your business all the time. The best source of innovation is often those closest to the problems - those on the front line, whether they're making the products, engaging with customers and suppliers or building your marketing plan. But these team members can't solve problems that they don't know or understand. So give them the number one tool that will give them the ability to help you - information.

The most powerful tool in today's business world, is an educated and empowered employee.

Measure Twice, Cut Once

We've all heard the adage, "Measure twice, cut once", when it comes to construction and woodwork, but did you know you can use the same premise to kick start and guide your marketing efforts as well.

Reality is that most small business owners have no idea whether or not their marketing is working for them. It's not a matter of not spending money on marketing. They spend just fine. The problem lies in the fact that they don't know what they should be expecting from their investment. And unfortunately, they don't know what they should be measuring or how best to measure it, to decide whether or not it's working. So as important as it is to market your business (akin to cutting the wood), it's just as important to make sure that you are measuring what you want to improve through your marketing dollars.

Most small business owners measure one or two things: gross revenue / sales (how much did I collect) and / or net profit (how much did I make). So when they spend money on marketing, they expect their numbers to go up. But unfortunately, no matter how much money you spend on marketing, only measuring the end product will not yield the answer you are looking for, because marketing doesn't increase sales or profit - marketing increases the chances of making a sale by increasing the numbers of customers that volunteer to become potential customers. It is the entire business system, working harmoniously that builds on your profits.

An example of that is a mass-mailer campaign. If you invest $1000 in a mass mailing campaign, you would expect both your sales and your profit to go up, right? Unfortunately, business systems aren't that simple. Odd are, you increased the number of perspective customers walking through the door, but did your sales team have the skills and training in place to convert those new leads to actual sales? Was there an increase or even possibly a decrease in returning customers during that same period, because of a perceived drop in customer service (with less time and energy spent on taking care of existing customers)? Was the increase in sales large enough to compensate the increased costs of the marketing campaign?

That's not to say that measuring sales and profit aren't important - they absolutely are! However, there are other things to measure as well. The following are just a few examples of things to measure the effectiveness of your marketing dollar:

- new customers walking through the door
- number of times the phone rings per day
- number of website hits
- number of return visits per customer
- average price per sale
- number of referred customers
- where the customer heard of you

So before you go off and spend all of your hard earned money on marketing - that may or may not help you - start measuring the one or all of the items above (and any others that relate to the effectiveness of marketing). This will help you determine which marketing elements are working, and which ones aren't. And give you a better sense of control over what in most small businesses is completely "out of control".

Are Your Sales Down? By How Much?

Ask any small business owner these two questions and they can usually give you exact numbers.

But ask them the more important questions, "Why?" or "Which element of sales is down?", and most will look at you with completely blank stares. Or they will ask you a question right back, "What difference does it make?"

So I ask you, the reader, does it matter? Should I care why sales are down, or just that sales are down? Probably no surprise to you, but in my opinion, the answer to both of these questions is, "Absolutely, it matters."

If your industry average sales numbers are down 30% and you are only down 5%, are you doing something right or doing something wrong?

How about if your new customer sales are up 25% but your repeat customer sales are down 40%, do you have a marketing problem, an operational problem, or perhaps both? What if those numbers were reversed.

Unfortunately, it's my experience as a Small Business Coach, that most owners are incapable of asking these questions, because they don't gather the information necessary to even consider them. All they seem to care about is total sales and, surprisingly, to a lesser degree total profit. And no matter how much I try to get them to seek out more data, they continue to fall back on these big picture numbers - and stop there.

So what can you, as a small business owner, do about this? First, you need to recognize that you have a responsibility to your business to do whatever it needs to help it survive - not what feels good to you. And you can start with grasping the idea that your business needs you to start managing it - and stop letting it manage you.

The first step to management is measurement. So start measuring everything. Measure the number of times the phone rings (and what times it rings). Measure average sales every day, what kind of sales occur between 2-4pm on Tuesdays and which ones occur on Wednesday evenings. Measure your conversion rates, from both phone-in and website leads, separately.

But don't stop there. If you can think of it, measure it.

Do it all by hand at first (if you must). But over time, figure out how to automate it all.

And remember, the more you measure, the more you can manage. The more you can manage, the more you can begin to improve. The more you improve, the better the bottom line. And that's your ultimate goal - to improve your business and drive up profits.