Running your business takes a lot of work, discipline and dedication.
The way to manage this is to have a disciplined approach to managing your business by setting up a regular review of key aspects of your business. This way you will identify issues early, address them and move on.
If a problem is left unattended for too long it becomes a major issue. And if it becomes a major issue then maybe someone else will make the decision for you. This is what you do not want to happen.
- Review Your Top Selling Products
When we review our top selling products we look at the number of units, dollars sales and gross margin. This will provide you with some interesting insight into the product mix of your business.
We look at both the top performers and the poor performers. You need to get rid of the bottom performers in your business.
Clear them out because they are only costing you money, energy and time. No matter how attached you are to the bottom performers, which are generally kept under of the premise but what if a customer asks for one.
But in reality, if they are sitting in your bottom performers not too many people are asking for them. Get rid of the bottom performing 20%. They are costing you too much.
This will give you a great lead to be able to run promotions to clear your poor stock or offer them as bonuses at cost with some of your top performing stock. Believe me, you will get burnt by carrying too much dead stock.
We will look at the top performers in a little more detail in another point.
- Review Your Top Customers
Now review your top customers and again look at units purchased, dollars purchased and gross margin dollars. This again will make some interesting reading for you and it will produce some interesting questions for you.
Again get rid of the bottom performing customers. You need to determine if it is worthwhile expending the time and energy you do to keep the poor performing customers.
An interesting analysis is to look at the gross margin in dollars that you are generating. A customer may deliver you large dollar sales but the GP dollars are very skinny.
You also don’t want to have 1 or 2 customers that are generating a significant percentage of your business. If something should happen to one of these customers and you lose them then your business would become vulnerable.
- Review Your Margins and Prices
One of the great lines I have heard over the years is that we bank dollars, not percentages. Which is right the bank does not accept your percentages they are only interested in the dollars.
What dollars are you banking.? What money are you putting in your account?
Remember you don’t eat the margins you need the cash to pay for things.
- Review Your Inventory
If you have physical products you need to consistently review their performance. What products are selling and which ones are just tying up warehouse space and your cash.
Get rid of the products that are not selling and that don’t sell consistently. They are just an anchor on your business and if you don’t get rid of them they will drag you down.
Sell them for cost. Really why are you holding on to them? Hoping that they may sell one day. Get rid of them and move on.
- Review Your Expenses
Do you see your expenses as a cost or an investment?
Your expenses should where you are investing your money into assets to grow your business, to make sales and to give you a better return.
A lot of business owners see expenses as being a cost to boost their ego.
They want the shiny signage on the building, the biggest chair, the latest computer and tech device. These at the end of the day don’t deliver extra sales, profit or return.
Your expenses are an investment that you are making in your business. View them accordingly.
As one of my business coaches told me one day always cut the human expenses last look at other areas of your business to fine tune before the human costs.
I encourage you to do the same if you need to control your expenses.
But always remember you can’t cut your way to growth and prosperity, just make sure you are getting a return and that you are being efficient with your expenses.
- Document your Action Points and Dates when things will be completed.
Always set dates when you will have things completed, and work towards these dates.
Be disciplined. As they say, you may not see much change from one day to another but over a few months, you will notice a difference.
Get in and get things done. Time waits for no man.
Time will just rush you buy. As the saying goes how do you eat an elephant? One small bite at a time. The same applies to your business, take the little steps to achieving your big goals.
- Review Your Marketing activities and measure their returns
Be on top of where you are spending your marketing dollars.
In order to do this, you really need to have a solid idea of who your target market is. Then you can really focus your marketing activities on meeting their desires and problems.
Always have your marketing plan about 90 days in advance so you can plan for major promotions, holidays, events. This way you can order goods or items before and be able to secure the cheapest prices.
- What are you measuring and are they important to your business
What do you measure in your business? Your profit and loss, balance sheet and cash flow statement?
If you are not looking at all 3 statements every month then you are behind. Get in and review your figures monthly. Don’t just wait for your tax return to see if you had to pay tax to see if you made money.
You know that you can still be making a profit and still go broke.
If you have no cash you are going nowhere. Just because you have a warehouse full of stock doesn’t mean you are doing well. The interest rates will kill you if you are having to, pay for slow or dead moving stock. And I don’t think you need to give any extra money to your bank or supplier just to be seen as a good guy.
Because when things get tough they won’t stand by you. Trust me I know from our personal experience during the 2008 financial crisis.
- Set up a regular 30 day, 90 day and 180-day review system
We have a regular 30-day review of our financial performance (This is on top of our daily and weekly review) of the performance of our business.
With the development of technology and the internet you can easily run frequent reports). To put together our monthly performance review we follow the guidelines that Keith Cunningham details in his book The Ultimate Blueprint.
In our opinion, Keith is one of the leading experts on analysing the financial performance of any company and if you haven’t yet you need to read some of his books.
We have a 90-day marketing process that we follow in relation to our business. This allows us to focus on 12 different parts of our business to ensure that we are improving continuously as we stay on top of our performance.
We drew a lot of inspiration and direction for this from Chet Holmes book The Ultimate Sales Machine. And so we have modelled a number of our steps and processes on the direction from this book.
Every 180 days it is good to follow what is laid out in this post and just conduct a review of the operation of your business and the end of the calendar year and the financial year. Now for us, this means December and June.
- Income Streams or Additional Products.
Look to add additional products or income streams to your business.
Try and get products on commission or sell products before you buy them. That way your customer is actually paying for the stock, not you.
As T Harv Eker taught me to create your value before you buy or sell it.
Thinking about digital products, coaching or classes or seminars as avenues for extra income.
Don’t sell yourself short in the knowledge you have and how other people or business owners can benefit from your knowledge.
If you set up a process to do these 10 things regularly then you will unlock the growth of your business and you will see your performance and returns improve.
Photo by Jazmin Quaynor on Unsplash
Photo by Estée Janssens on Unsplash
