Creating Personal Breakthroughs to Achieve More

Most of us are aware that the Jewish holiday of Passover occurs this time of year because the TV networks seem to always replay one of the most successful epic motion pictures, of all time, The 10 Commandants starring Charlton Heston.  It’s the biblical story of how G-d took the Jewish people out of Egypt and took them to Mt. Sinai to receive the 10 Commandments and Torah.  This week Jews all over the world come together to remember and relive this historical event but if understood properly there can be many lessons in which we call all take away.

As I am sitting here exhausted from all the preparation getting ready for the Jewish festival of Passover, I am reminded that success and happiness is not easy.  There are many lessons for all to be learned from this holiday.   It’s not a holiday commemorating an ancient event but a lesson to achieve true success & happiness in our lives.

The biggest lesson to take away from the holiday of Passover is that success takes hard work and preparation.  There are no short cuts to true success.  Passover is the holiday of freedom.  Jewish mystics teach us that Passover is not the holiday of freedom because the Jewish people were freed from their slavery in Egypt at that time, but that the holiday occurred then because it was a “time” of freedom.

If that is the case, every year there should be a universal energy that occurs now that we each can tap into.  This is a time for each of us to search deep inside ourselves to find the things or limiting beliefs that keep us in our rut or comfort zone and is keeping us from being as successful as we can.

When we search deep inside ourselves we will find the true source of our power and energy, and when we truly connect to this energy, we will be amazed in the abundant amount of good we can produce.

The Passover holiday is over week long.  The first days are about preparation and beginning on your path of success.   Change is not easy.  Whenever we try to change, it’s very easy to fall back into our comfort zone.  Making change last is what the last days of the holiday is all about.

The 7th day is when the Jews crossed the Sea of Reeds or commonly referred to as the Red Sea. Before they crossed and achieved their true freedom they faced a big obstacle.  They felt trapped; Pharaoh and his army where in hot pursuit and they were trapped at the Red Sea.  At this point some even thought that they should go back to Egypt (back to their comfort zone).  It was not until they refocused on their mission to go serve G-d on the mountain that things changed and it wasn’t until the water reached their nostrils that the sea began to split.

The lesson here is, when you are focused on your goal, what appears to be obstacles will split & provide you with a path to reach your goals.

Our biggest obstacle is our own limiting beliefs. Don’t focus on what you can’t do but what you can do. You’ll see the miracles appear in front of your own eyes.  How many times have we quit just before the moment of a great break though?  It’s almost scary to think about.

Jack Canfield sums it up in a formula from his book “Success Principles”.

E + R = O   Event + Response = Outcome

We all know the outcomes we want to achieve (though some of us have a clearer picture of that outcome than others).  But, there always seems to be some event or barrier that comes along and keeps us from journeying forward to our desired outcome.  Most of the time, we have no control over this event or the personal barrier that is put in front of us by ourselves or others.

The only thing we are in control over is how we respond to this event.  When we focus on the event or obstacle we lose focus and our desire to move toward our goal.  But, when we are focused on our outcome or goal, those obstacles that may appear to be as big as a whole sea that will soon split and allow us to truly break free and move toward our goal.

May this season of freedom allow you to break through to your success that is just waiting for you.

Please let me know your thoughts in the comments section below…

Six Power Ratios to Start Tracking Now

Doctors in the developing world measure their progress not by the aggregate number of children who die in childbirth, but by the infant mortality rate – a ratio of the number of births to deaths.

Similarly, baseball’s leadoff batters measure their “on-base percentage” – the number of times they get on base – as a percentage of the number of times they get the chance to try.

Entrepreneurs buying businesses also like tracking ratios, and the more ratios you can provide a potential buyer, the more comfortable they will become with the idea of buying your business.

Better than the blunt measuring stick of an aggregate number, a ratio expresses the relationship between two numbers, which gives them their power.

If you’re planning to sell your company one day, here’s a list of six ratios to track in your business now to use in creating a score card for potential buyers:

1.      Employees per square foot

By calculating the number of square feet of office space you rent and dividing it by the number of employees you have, you can judge how efficiently you have designed your space. Commercial real estate agents use a general rule of 175–250 square feet of usable office space per employee.

2. Ratio of promoters and detractors

Fred Reichheld and his colleagues at Bain & Company and Satmetrix developed the Net Promoter Score^® methodology.  It is based on asking customers a single question that is predictive of both repurchase and referral.

Here’s how it works: survey your customers and ask them the question, “On a scale of 0 to 10, how likely are you to recommend <insert your company name> to a friend or colleague?”

Figure out what percentage of the people surveyed give you a 9 or 10, and label that your ratio of “promoters.” Calculate your ratio of detractors by figuring out the percentage of people surveyed who gave you a score of 0 to 6. Then calculate your Net Promoter Score

The average company in the United States has a NPS of between 10 and 15 percent.  Reichheld found companies with an above-average NPS grow faster than average-scoring businesses. 

3. Sales per square foot

By measuring your annual sales per square foot, you can get a sense of how efficiently you are translating your real estate into sales. Most industry associations have a benchmark. For example, annual sales per square foot for a respectable retailer might be $300. With real estate usually ranking just behind payroll as a business’s largest expenses, the more sales you can generate per square foot of real estate, the more profitable you are likely to be.

4. Revenue per employee

Payroll is the number one expense for most businesses, which explains why maximizing your revenue per employee, can translate quickly to the bottom line. Google, for example, enjoyed a revenue per employee of more than one million dollars in 2015, whereas a more traditional people-dependent company may struggle to surpass $100,000 per employee.   

5. Customers per account manager

How many customers do you ask your account managers to manage? Finding a balance can be tricky. Some bankers are forced to juggle more than 400 accounts, and therefore do not know each of their customers, whereas some high-end wealth managers may have just 50 clients to stay in contact with. It’s hard to say what the right ratio is because it is so highly dependent on your industry. Slowly increase your ratio of customers per account manager until you see the first signs of deterioration (slowing sales, drop in customer satisfaction). That’s when you know you have probably pushed it a little too far.

6. Prospects per visitor

What proportion of your website’s visitors “opt-in” by giving you permission to e-mail them in the future? Dr. Karl Blanks and Ben Jesson are the cofounders of Conversion Rate Experts, which advises companies like Google, Apple and Sony on how to convert more of their website traffic into customers. Dr. Blanks and Mr. Jesson state that there is no such thing as a typical opt-in rate, because so much depends on the source of traffic. They recommend that rather than benchmarking yourself against a competitor, you benchmark against yourself by carrying out tests to beat your site’s current opt-in rate.

Entrepreneurs looking to purchase a business have a healthy appetite for data. The more data you can give them – in the ratio format they’re used to examining – the more attractive your business will be in their eyes.

Interested in learning how to create a score card in your business that will help you to predict not only the direction your business is going but how valuable it is to potential buyers? 

Contact ActionCOACH Steve Goranson to schedule a free 1/2 hour Phone Strategy Session at 904-739-0200.

Steve Goranson has owned and operated the Northeast Florida of ActionCOACH since 2004.  ActionCOACH is the World's #1 Coaching franchise with over 1000 offices in 50 different countries. They coach over 15,000 business each week worldwide.

Steve's commitment is to help small business owners to develop actionable ideas that will allow them to spend less time working "in" their business and more time working "on" their business so they can build a more valuable and sellable business. In the end, you’ll be spending less total time working, will be making more money and will have truly created the company and team you always dreamed of. In addition we will help you put the FUN back in your business and your life.

Call his office to schedule a free 1/2 hour Phone Strategy Session 904-739-0200 www.actioncoachsteve.com

90 Days That Will Define Your Business Forever

You've done the hard work of winning a new customer, but it's what you do in the next 90 days that determines if it'll stick around.

The first 90 days of any new relationship are critical:

• A president has about three months to inspire the electorate and gain the political capital he needs to govern.
• A young team prospect has but a few months to impress his coach before being sent down to the minors.
• A new CEO has 90 days to learn her job before the rank and file start expecting tangible leadership.

The Onboarding Window: The First 90 Days
For a young company, the first 90 days of a customer relationship are equally important. Research into the subscription business model shows that getting a customer to effectively start using your product in the first 90 days leads to an increase in lifetime value of up to 300 percent for some companies.

Take a look at marketing software provider Constant Contact, which used to struggle with the first 90 days of a new customer relationship.

In the old days, Constant Contact took a "who, what, when" approach to onboarding new customers. Who stood for who a customer wanted to send an email campaign to; what stood for what the customer wanted to send; and when described the timing of the campaign.

After users signed up for its service, Constant Contact would ask customers to upload their email database (the who in the three-step onboarding process). This required the new user to upload a customer list--which is the trickiest part of the onboarding experience. It required the customer to leave Constant Contact's site and struggle with how to export a contact list--often from a jury-rigged database kept in Excel or Outlook.

The process was awkward, and many new customers stopped using Constant Contact because they hit a barrier before they had a chance to fall in love with the Constant Contact software.

What, Who, When
Wanting to stem new customer churn, Constant Contact changed its on boarding to focus first on the what. Immediately after signing up, new users were encouraged to create their first email campaign. Suddenly customers were seeing their campaign come to life in front of their eyes.

Constant Contact offered customers a library of stock images that looked more beautiful than anything a business owner had used in the past. Customers could see firsthand how professional their company was going to look.

Only after the customer had completed the what stage and earned the emotional reward of seeing its first campaign come to life, did Constant Contact switch to the who part of creating a campaign.

The difference was, by this point, Constant Contact had enough relationship equity with the customer to get it over the hump of uploading its database. This minor reordering of the onboarding flow led to a dramatic reduction in customer churn--which is the death knell of any subscription business.

Whether you’re in a subscription business, or still using a transaction business model, how you treat a customer in the first 90 days will go a long way in determining their overall satisfaction.

If you would like to learn more about team building contact ActionCOACH Steve Goranson at 904-739-0200. www.actioncoachsteve.com

Steve Goranson has owned and operated the Northeast Florida of ActionCOACH since 2014.  ActionCOACH is the World's #1 Coaching franchise with of 1000 offices in 50 different countries. They coach over 15,000 business each week.

Steve's commitment is to assist small business owners, to spend less time working "in" their business and more time working "on" their business so they can build a more valuable and sellable business. In the end, you’ll be spending less total time working, will be making more money and will have truly created the company and team you always dreamed of. In addition we will help you put the FUN back in your business and your life

Call his office to schedule a free 1/2 hour Phone Strategy Session 904-739-0200

4 Keys to Increased Profits & Cash Flow

Every business I speak with wants to increase sales in their business.  Who wouldn’t?  

But increased sales is not necessary for the goal.  We don’t really want more sales, what we really want is more profit, right?  Well not necessarily, because you can’t really do anything with profit.  Profit is just a theory.  The question is how we turn profits into cash. 

To help us understand how to increase our profits and cash flow we must first understand the 4 M’s; Management, Money, Marketing, & Merchandise.

Management:  Properly run companies can sustain profitability over the long run because they are organized and cut wasteful spending.  When business is good the average company doesn’t seem to care where the wastes are in the business because there is enough cash to cover up the waste.  Properly run companies understand that investing in properly trained teams will lead to increased profits and cash flow.  A team who is aligned to company goals and that understands how their specific role and task leads into the company’s “big picture”, will be more effective and efficient.  Since they are aligned to the company’s goals they will be able to recommend ways for the company to be more effective and efficient.

Money:  Money management is a key to all successful business.  That’s both money coming in and out.  The two biggest bottlenecks that prevent profits from turning into cash are inventory and accounts receivables.  Properly run companies are always managing their vendors, looking for better ways to order more efficiently and ways they can negotiate better terms.  Most AR problems arise because issues aren’t addressed until they turn into problems.  Make sure your clients understand and are clear on your payment terms.  Don’t be afraid to ask for your money.  If you don’t, someone will be getting paid before you. 

Marketing:  Even in a tough economy people are spending money on your product or service.  The purpose of your marketing is to help you get your “unfair” share of the dollars being spent.  To do this you have to be very clear on what your clients want and how your product or service can help them achieve that.  Marketing is not just advertising, it’s all about understanding your whole sales process, which turns a lead into a customer that comes back again and again.  By understanding each step of the sales process from lead generation to repeat customer, you can quickly identify the bottlenecks and implement strategies to move them to the next step.

Merchandise:  If sales are down, you need to see if people are using your product in the same way as before.  In the past, people might have been using your product or service out of ego, price, or having a particular item, that might not be the case now.  Maybe now your product or service could be used in a different way that your customer hasn’t even thought of.   Successful companies are always asking themselves why people are buying their product or service.  Additionally, make sure your team understands which products are your most profitable.  Just adding some extra attention to your most profitable items can easily increase your overall profit margins.

In creating a more valuable business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business that if tweaked will increase the value of your business.

By completing the Business Health Check, you will receive a Free Report based on your answers, prepared by our team of highly skilled Business Coaches.  CLICK HERE to take your Business Health Check Now

4 Traps To Avoid When Selling Your Company

Business owners have been known to refer to due diligence as "the entrepreneur's proctology exam."

It's a crude analogy but a good representation of what it feels like when a stranger pokes, prods, and looks inside every inch of your business.

Most professional acquirers will have a checklist of questions they need answered if they’re considering buying your company. They'll want answers to questions like:

• When does your lease expire and what are the terms?
• Do you have consistent, signed, up-to-date contracts with your customers and employees?
• Are your ideas, products and processes protected by patent or trademark?
• What kind of technology do you use, and are your software licenses up to date?
• What are the loan covenants on your credit agreements?
•  How are your receivables? Do you have any late payers or deadbeat customers?
•  Does your business require a license to operate, and if so, is your paperwork in order?
• Do you have any litigation pending?

In addition to these objective questions, they'll also try to get a subjective sense of your business. In particular, they will try to determine just how integral you are personally to the success of your business. 

Subjectively assessing how dependent the business is on you requires the buyer to do some investigative work. It's more art than science and often requires a potential buyer to use a number of tricks of the trade, such as: 

Trick #1: Juggling calendars

By asking to make a last-minute change to your meeting time, an acquirer gets clues as to how involved you are personally in serving customers.

If you can't accommodate the change request, the acquirer may probe to find out why and try to determine what part of the business is so dependent on you that you have to be there.

Trick #2: Checking to see if your business is vision impaired

An acquirer may ask you to explain your vision for the business, which is a question you should be well prepared to answer. However, he or she may ask the same question of your employees and key managers. If your staff members offer inconsistent answers, the acquirer may take it as a sign that the future of the business is in your head.

Trick #3: Asking your customers why they do business with you

A potential acquirer may ask to talk to some of your customers. He or she will expect you to select your most passionate and loyal customers and, therefore, will expect to hear good things. However, the customers may be asked a question like 'Why do you do business with these guys?' The acquirer is trying to figure out where your customers' loyalties lie. If your customers answer by describing the benefits of your product, service or company in general, that's good. If they respond by explaining how much they like you personally, that's bad.

Trick #4: Mystery shopping

Acquirers often conduct their first bit of research behind your back before you even know they are interested in buying your business. They may pose as a customer, visit your website, or come into your company to understand what it feels like to be one of your customers.

Make sure the experience your company offers a stranger is tight and consistent, and try to avoid personally being involved in finding or serving brand-new customers. If any potential acquirers see you personally as the key to wooing new customers, they'll be concerned business will dry up when you leave.

In creating a more valuable business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business that if tweaked will increase the value of your business.

By completing the Business Health Check, you will receive a Free Report based on your answers, prepared by our team of highly skilled Business Coaches.  CLICK HERE to take your Business Health Check Now

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Business Advice: Subscribers Make Your Company More Valuable

Why are Amazon, Apple and many of the most promising Silicon Valley start-ups leveraging a subscription business model?

Subscribers not only provide steady revenue; they make your company more valuable in the eyes of an acquirer. In a traditional business, customers buy your product or service once and may or may not choose to buy again; but in a subscription business, you have "automatic” customers who have agreed to purchase from you on an ongoing basis.

There are at least nine subscription models that can be leveraged by businesses ranging from service companies to market research firms to manufacturing concerns.

Recurring Revenue

Recurring revenue—the hallmark of a subscription business—is attractive to acquirers and makes your business more valuable when it’s time to sell. How much more valuable? To answer that, one has to first look at how your business will be valued without a subscription offering.

The most common methodology used to value a small to midsize business is discounted cash flow. This methodology forecasts your future stream of profits and then discounts it back to what your future profit is worth to an investor in today's dollars, given the time value of money. This investment theory may sound like MBA talk, but discounted cash flow valuation is something you have likely applied in your personal life without knowing it. 

For example, what would you pay today for an investment that you hope will be worth $100 one year from now? You would likely "discount" the $100 by your expectation for a return on investment. If you expect to earn a 7 percent return on your money each year, you'd pay $93.46 ($100 divided by 1.07) today for an investment you expect to be worth $100 in 12 months.

Using the discounted cash flow valuation methodology, the more profit the acquirer expects your company to make in the future—and the more reliable your estimates—the more your company is worth. Therefore, to improve the value of a traditional business, the two most important levers you have are: 1) how much profit you expect to make in the future; and 2) the reliability of those estimates.

At SellabilityScore.com, one can see the effect of this valuation methodology. Since 2012, this methodology has been used to track the offers received by business owners who have completed the Sellability questionnaire. During that time, the average business with at least $3 million in revenue has been offered 4.6 times its pretax profit. Therefore, a traditional business churning out 10 percent of pretax profit on $5 million in revenue can reasonably expect to be worth around $2,300,000 ($5,000,000 x 10 percent x 4.6).

Then compare the value of a traditional company with the value of a subscription business. When an acquirer looks at a healthy subscription company, she sees an annuity stream of revenue throwing off years of profit into the future. This predictable stream of future profit means she is willing to pay a significant premium over what she would pay for a traditional company. How much of a premium depends on the industry, and some of the biggest premiums today go to companies in the software industry.

Subscription-based Software Companies

To understand what is going on in the valuation of subscription-based software companies, look at Dmitry Buterin. Buterin runs a subscription software company called Wild Apricot. He has also formed one of the world's first mastermind groups of small and midsize subscription company founders, and each month the group meets to discuss strategies for running a subscription business.

Members of the group were constantly raising money or being courted by investors, so the topic of valuation came up a lot in their conversations. Buterin found that the consensus valuation range being offered to member companies was between 24 and 60 times monthly recurring revenue (MRR), which is equivalent to two to five times annual recurring revenue (ARR).

One way to validate Buterin's numbers is to check with another guru from the world of subscription-based software companies. Zane Tarence is a partner with Birmingham, Alabama-based Founders Investment Banking, a company that specializes in selling software companies that use the subscription business model. Tarence estimates the valuation ranges he sees as belonging in one of three buckets:

24-48 x MRR (2-4 x ARR)
These are typically very small software companies with less than $5 million in recurring annual revenue. Companies in this first bucket are usually growing modestly, with subscription cancellation rates (i.e., "churn") in the area of 2-4 percent per month.

48-72 x MRR (4-6 x ARR)
These are larger software companies with recurring revenue of at least $5 million annually, which they are growing at the rate of 25-50 percent per year. Their net churn is typically below 1.5 percent per month.

72-96 x MRR (6-8 x ARR)
These are the rare, fast-growth software companies that are growing more than 50 percent per year, with at least $5 million in annual revenue and net churn below 1 percent per month. These companies usually offer a solution (typically an industry-specific one) that their customers need to use to get their jobs done.

The software business is an extreme example of the benefits of subscription revenue, but no matter what industry you're in, your company will likely command a premium if it enjoys recurring revenue.

From Alarm Systems to Prescriptions to Mosquitoes

For example, security businesses that monitor alarm systems and charge a recurring monthly monitoring fee to do so are worth about twice as much as security businesses that just do system installations. 

Retail pharmacies with a large pool of prescriptions for drugs that people take every day, like Lipitor and Lozol, command a premium over a traditional retailer because customers re-up their pills on a regular basis, creating a recurring revenue stream for the pharmacist.

Even tiny companies are worth more if they have subscription revenue. When my colleagues over at the Sellability Score analyzed very small businesses with less than $500,000 in sales, they found that the average offer these small businesses attract is 2.6 times pretax profit.

Compare that to the average Mosquito Squad franchise. Mosquito Squad is a Richmond, Virginia-based company that offers to keep bugs off your patio by spraying your backyard regularly with a proprietary chemical recipe approved by the Environmental Protection Agency. Mosquito Squad franchisees target affluent home owners with an average home value north of $500,000 who entertain in their backyard and don't want to be bothered by mosquitoes. Mosquito Squad operates on a subscription basis. You subscribe to a season of spraying, which includes 8 to 12 sprays, depending on how buggy it is where you live.

Mosquito Squad is a franchise business, and the impact of its recurring revenue model on its valuation is remarkable. According to Scott Zide, the president of Mosquito Squad's parent company, Outdoor Living Brands, Mosquito Squad franchises that changed hands over the most recent five-year period had revenue of $463,223 and sold for 3.7 times their pretax profit. That's a 42 percent premium over the traditional value of a company with less than $500,000 in sales, and it’s because Mosquito Squad operates on a recurring subscription model and 73 percent of its annual spraying contracts renew each year.

A newer player in this market with a franchise here in Jacksonville is Mosquito Joe who also has proprietary chemical recipe approved by the Environmental Protection Agency.  They target target home owners with household income of $75,000 and higher who entertain in their backyard and don.t want to be bothered my mosquitoes, ticks and fleas. Mosquito Joe is also subscription based but does not require a contract and guarantees that the product will work. 

The impact of its recurring revenue model on its valuation is also remarkable.  According to Kevin Wilson, the president of Mosquito Joe, franchises should sell at 1.2 times its annual revenue. Mosquito Joe is one of the fastest growing franchises and a leader in the pest control industry. 

Whether you plan to build a subscription-based software application or the simplest personal services business, having recurring revenue will boost the value of your most important asset.

In business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business. By completing the Business Health Check, you will receive a Free Report based on your answers. 

Business Advice: Be an agent of change

A man walks into a psychiatrist’s office.  “Doc, every time I see nickels, dimes, and quarters, I have a panic attack!  What can the problem be?

“Oh that’s easy” the doctor answers. “You’re just afraid of change”.

How many of us go through life virtually paralyzed because we are afraid of change, to try something new or different.

This fear keeps us from expanding our growth, knowledge, and success and limits our lot in life.

To break out of this cycle of fear we need to understand what fear really is.

Here’s two explanations of what fear really stands for;

False

Expectations

Appearing

Real

So how do we change or how can we be a change agent for others?

If someone is satisfied with their lives, will they change?  No, because they are satisfied.

If someone is unfit, overweight, or unhealthy, but they are satisfied with that, they are still unlikely to change.

Many of us have the ability to change the instant we become unhappy with our lives.

Others of us have to wait for a stroke or another disaster before we realize the need to change.

We see that there are two ends of the scale.  Some wait until the end and some change right at the beginning and some change just for the sake of change. Somewhere in there, there is a happy medium for you.

There is a simple formula that will allow us to understand the process of change and what we can do to affect positive changes in ourselves and in others.

(D x V) +FS > R

The “R” stands for resistance.  To overcome the resistance to change, what needs to be greater?  What can tip the scale to overcome our fear of change?  Let’s take a closer look.

The “D” in the formula stands for Dissatisfaction. Before you can change you have to have a level of dissatisfaction…

What builds dissatisfaction more than anything else?  “V” for Vision.

Let’s say that you are a kid living in an impoverished neighborhood. You don’t know any better life than that.  Are you dissatisfied with your life?  Not necessarily, you may be satisfied because you don’t know any better.

Why is it that when you are in business you need to consistently improve your business education?

Why do people hire a business coach or have a mentor, to help push them thru their comfort zone and to help them grow their vision.  They need help to look at what their next level is supposed to be.

Dissatisfaction takes a belief that there is something else out there.

One of the things I do as a business coach is to help my clients feel a level of dissatisfaction or discomfort, if they don’t do the work required to change.  Without a coach or a mentor you stay in your comfort zone because people don’t like feeling dissatisfied.  Dissatisfaction comes first but then we have to have vision and a belief that the vision is possible.

Those kids living in the impoverished neighborhoods can watch television and they can see other places in the world, but most have no belief that a different life is possible for them.  However, some do get a belief that it is possible.  Some of you reading this article are where you are today, because of the vision and the belief you had of a better life.  You believed it was possible.  That is why you have worked to make a better life for yourself.

My question is, how do we raise the dissatisfaction level for where you are now and how do we raise the vision of where you want to go?  Most of us are not experiencing change.

One of the fastest ways that I have found to raise people’s dissatisfaction is by having them write a check into their own investment accounts at the first of the month.  This check is from your business into your own investment or profit account.  An investment or profit account is an account that you can’t get direct access to.  If you take out $10,000, $5,000, $1,000 or even $100 a month, you then have little or no money left to pay the bills.

Is there going to be a level of dissatisfaction going on?  Absolutely!  How much harder are you going to work to pay off your creditor that calls you every day?  You have to create a vacuum that needs to be filled.  You have to start stretching yourself and expanding out of your comfort zones.

The next step of the equation is “FS” which stands for First Steps.

We have dissatisfaction, we’ve created a vision of what we want, but we don’t know how to start.

This is where a mentor or a coach can help.

Don’t look at eating the whole elephant all at once, just take it on one bite at a time.  Lee Iaacoca, states that the discipline of writing something down is the first step toward making it happen.  Take the time to write out your plan and break it into bite size chunks and get into Action.

By doing so, you will begin to break through the barriers in your life and stretch your comfort zone to reach a level of success you’ve only dreamed of.  Use this formula not only to help facilitate change in your life but to be an agent of change in the life of others.  Help them to understand and qualify their dissatisfaction, help them to build their vision what they want to achieve, and finally give them the first steps to move toward that goal.

By following this simple formula you can truly become an agent of change in your life as well as the life of others.

In business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business. By completing our Business Health Check, you will receive a Free Report based on your answers, prepared by our team of highly skilled Business Coaches.

CLICK HERE to take your Business Health Check

Business Advice: The #1 Task Business owners Should Stop Doing to Increase the Value of their Business

A study of 14,000 businesses reveals how you should not be spending your time.

In an analysis of more than 14,000 businesses, a new study finds the most valuable companies take a some what different approach to the business owner doing the selling.  So who does the selling in your business?  

My guess is that when you’re personally involved in doing the selling, your business is a whole lot more profitable than the months when you leave the selling to others.

That makes sense because you’re likely the most passionate advocate for your business. You have the most industry knowledge and the widest network of industry connections.

If your goal is to maximize your company’s profit at all costs, you may have come to the conclusion that you should spend most of your time out of the office selling, and leave the dirty work of operating your businesses to your underlings.

However, if your goal is to build a valuable company—one you can sell down the road—
....you can’t be your company’s number one salesperson.

In fact, the less you know your customers personally, the more valuable your business.  Now isn't that interesting?

The Proof: A Study of 14,000 Businesses

Sellability Score just finished analyzed our pool of their users for the quarter ending December 31.  We offer The Sellability Score questionnaire as the first of twelve steps in The Value Builder System, a statistically proven methodology for increasing the value of a business. (Click Here for your Score)

We asked 14,000 business owners if they had received an offer to buy their business in the last 12 months, and if so, what multiple of their pre-tax profit the offer represented. We then compared the offer made to the following question:

Which of the following best describes your personal relationship with your company's customers?

•  I know each of my customers by first name and they expect that I personally get involved when they buy from my company.
• I know most of my customers by first name and they usually want to deal with me rather than one of my employees.
• I know some of my customers by first name and a few of them prefer to deal with me rather than one of my employees.
• I don’t know my customers personally and rarely get involved in serving an individual customer.

2.93 vs. 4.49 Times

The average offer received among all of the businesses we analyzed was 3.7 times pre-tax profit.

However, when we isolated just those businesses where the owner does not know his/her customers personally and rarely gets involved in serving an individual customer, the offer multiple went up to 4.49.

Companies where the founder knows each of his/her customers by first name get discounted, earning offers of just 2.93 times pre-tax profit.

When Value Is the Enemy of Profit

Who you get to do the selling in your company is just one of many examples where the actions you take to build a valuable company are different than what you do to maximize your profit. 

If all you wanted was a fat bottom line, you likely wouldn't invest in upgrading your website or spend much time thinking about the squishy business of company culture.

How much money you make each year is important, but how you earn that profit will have a greater impact on the value of your company in the long run.

How Healthy is Your Business?  Take the Business Health Check and Find Out TAKE TEST

The True Measure of Marketing Success

What is the true measure of marketing success?   It’s called testing and measuring. 

Most people hate it. That’s because it means ‘there is a chance, however remote, that every marketing strategy you try will not work the first time’. In other words, it’s possible you’ll spend money without seeing any returns.

But consider this – you’ve probably been testing and measuring all your business life. Remember the newspaper advertising you tried that ‘didn’t work’, and the radio spots that ‘did OK’.

That’s all testing is… Testing what works and what doesn’t…

The next step is to do it properly, here’s the five steps to successfully working out what ‘works’ and what doesn’t…

1.      Start asking people where they heard about you.

Start right NOW, immediately. If there’s one thing I stress to business owners when coaching with them, it’s this – if you don’t know what’s working and what’s not, you can’t possibly make informed decisions and you’ll never know which ads to run. You may keep running an ad that never brings a sale, and accidentally kill a good one.

Customers usually come from so many sources, it’s impossible to judge how an ad is working on sales alone. You need to find out for sure. Create a tally sheet, including the ways someone could hear about you – newspaper ads, direct mail, fliers, phone directory, referrals, walk-by traffic etc

Every time someone inquires about your business and/or buys from you, ask them this question – “By the way, can I just ask where you heard about my business’.

Make a mark on your tally sheet in the relevant column. Keep track, and ensure every member of your team does the same. At the end of 14 or 28 days, tally up and get the figures.

Without this information you can't determine how much it costs you to buy a lead or buy a customer.  Until you know this number you will continue to waste your money on poor marketing decisions

Now you can start making starter decisions…

2.      Prune, modify and increase.

The first thing to do is see what’s not working. If you ad is getting a very low response (which means the profit margin from the sales is not at least paying for the ad), kill it straight away.

Now you only have one option – improve your ad to ensure you get a great response.

There’s a couple of things you can do to make the task simpler.

First, go back over your past ads and think about how well each one worked. Pull out the best couple and see if you can pick what gave them their edge. Next, read a couple of books, or at least flick through them. Last, look at what your competitors are doing. Do they have an ad, which they can run every week? What can you learn from it?

Go through this process with each marketing piece that you are currently using… Kill, examine, modify… Kill, examine, modify… Remember – the true test of a marketing strategy is whether it pays for itself. If you run an ad and it costs you $600 and makes you $1300 in profit, it’s a good ad.

Also run through each of the strategies you know are working in depth, examining why these are producing results and the others aren’t. See if you can pick the one important attractive point about each. This in itself will teach you a massive amount about your business.

Next, think of a way to use each strategy that is working on a larger scale.  If it’s fliers, the answer is simple – drop twice as many fliers. That should bring twice the sales. If it’s an ad, run it in more papers, or increase its size.  If it’s in a phone directory, book a bigger space next time.

But whatever you do, don’t meddle – just do the same thing on a larger scale.

3.      Test and measure for another two weeks.

Measure the leads with the new revised strategies. Also compare this with how much you’re spending on marketing.

You’ll probably find you barely miss those dud strategies and the ‘larger scale’ working strategies are paying out nicely indeed.  If it’s not, return to the original size.

4.      Check your conversion.

Conversion is the number of leads that become sales… So many times when analysing a business, I discover that poor marketing is not the problem – it’s inadequate sales techniques. There are stacks of businesses that have ample leads, but no skill to make them sales.

Be honest with yourself – how many leads do you convert into sales? Is it possible to increase this ratio, even just a little? … In almost every case, it is.

You just have to give the customer a reason to buy from your business. Price is not the only reason a customer spends with your business. 

What if the salesperson at the more expensive shop actually took an interest in your needs? And what if they were that little bit friendlier? And what if they were willing to back their product with a guarantee? And what if they offered free delivery? All of these ‘what ifs’ add up, and can tip the sale your way.

5.      Consolidate.

Leave it for a month or so, just working on converting the supply of leads you have. A better conversion technique, plus more leads from bigger scale successful marketing strategies should give your business a boost.

6.      Branch out.

Remember all those marketing strategies you examined and modified? Now is the time to pull them out of the drawer, and give them a run.

Do one at a time, and track the result meticulously. Note down exactly how many leads it brings you, and how many of those turn into sales. Compare that with the marketing cost, and judge whether it has been a good strategy.

If so, add it to your list of ongoing strategies. If not, try it again – testing a different headline, medium, offer, look etc… If it doesn’t work again, give it another try…

Very soon, you’ll develop a collection of marketing strategies that work, and weed out all the costly ones. Now that’s a business success formula!

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