Confessions of a Business Owner: The business was driving me instead of me driving the business

Are you driving your business or is your business driving you?  You can continue to be stuck in the owner’s trap and stay on the treadmill or choose to get your business back on track.

That was the 2^nd confession from Jeff Clarkson, a former client of mine of where he was at before we met.  He wanted more than a job; he wanted a business that would work without him but wasn’t sure how to get there.

It was while having a cold beer during a gripe session with a friend of his (a current ActionCOACH client) that his friend recommended that he speak to me about how the ActionCOACH system could help him through his struggles.  .

Jeff had been the owner and President of Florida Bonded Pools here in Jacksonville for over 10 years.  It was the oldest pool company in Jacksonville started by his father over 50 years ago.  He had success in turning their struggling family owned business with 1 million in sales to a profitable company with sales ranging from 4.5 million to 6.5 million in annual sales.  Even with this success he was frustrated &wanted more.

As John Warrillow wrote in his book Built to Sell,  Jeff was caught in the owner’s trap. He was doing a lot of the selling and business always got slow when he was away.   Customers only came directly to him when there was a problem and his employees couldn’t make a decision without asking him first. 

He definitely felt trapped.  He was afraid that he was going to fall into the same trap that his dad had fallen into when he was spending more time at the business than at home.  Jeff wanted more than a job he wanted a business that could work without him.

It all starts with ActionCOACH’s definition of a business … with the simple idea that as a business owner you started or bought yourself something that’s more than just a job …

I see a business as … A Commercial, Profitable, Enterprise, that Works, without You … Let’s look at this more closely;

Commercial means that you sell something that people value, they want to buy;

Profitable means that you understand enough about business finance that you can possibly increase your profits without even increasing your revenue or lowering your expenses.

That Works and can work without you means that you have a system and a team that you can trust.”

You can’t have a business that works without you as the owner until you first have a business that works. Prior to that, it’s got to be both commercial and profitable … 

So, let’s take a look at the 6 Steps that Jeff learned to create a business that could work without him.

Step 1 - Mastery: 
This is about going from Chaos to Control … it’s about going from breaking even or losing money, to truly making a bankable cash profit.  It’s about making sure delivery happens so you don’t get customer complaints and, it’s about taking back control of your time

Steps 2 – Niche
Now this is where you start to make the real money … working your Niche is about getting a bunch of new leads, quickly reworking your sales conversion rates, getting your repeat business numbers up and then, boosting your average dollar sale.  This is truly about building a marketing machine that drives profit straight to your company’s bottom line. 

Steps 3 – Leverage
The next step is all about Systems … it’s about working ‘ON’ your business and not just ‘IN’ it.  Here you’ll start to see your business going from being people reliant, to being systems reliant …truly starting to free up your time and give you control over the growth of your business.

Step 4 – Team
They say team stands for ‘Together Everyone Achieves More’. When you’ve already got your Mastery, Niche and Systems in play, it’s time to lead a team that will ultimately run the company without you.  At the team stage you start to get a true business by getting it to begin to work without you.

Step 5 – Synergy
Here you’ll start to step back from the day to day, start handing over control. You really begin to ‘turn up the volume’ as they say … now that everything works, it’s time to do it bigger, better and more often … all the while keeping an eye on your team, your systems and your company making sure it can handle the growth.

Step 6 – Freedom / Results
This is about you – First, it’s about you enjoying the fruits of your labor and then it’s about diversification and investment.  Now that it’s all working, you can start to invest more time with your family, at your hobbies (or, even to find a hobby), or even work on investing your income or buying other companies where you can use everything you’ve learned all over again.

Confession # 2:  The business was driving me instead of me driving the business

Solution:  Jeff stopped and asked for help.  He was able to develop a more valuable company that was system based and not dependent on him by learning ActionCOACH’s 6 Steps Business Success System.

Over the next few blogs we will look a bit closer at each of these 6 Steps to create a more valuable and sellable business.

If you would like to learn more about you too can get an "actionable" business education to improve your business's operations, sales,& bottom line contact ActionCOACH Steve Goranson at 904-739-0200. www.actioncoachjax.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

Growth vs. Value: Not all Revenue is Created Equally

When you look ahead to next year, will your growth come from increasing your average dollar sale and average number of transactions per customer, (selling more to your existing customers at a higher rate) or finding new customers for your existing products and services through lead generation?

The answer may have a profound impact on the value of your business.

Take a look at the research coming from a recent analysis of owners who completed their Sellability Score questionnaire. We looked at 5,364 businesses and found that the average company that had received an offer from an acquirer was offered 3.5 times their pre-tax profit.  When we isolated just the businesses that had a historical growth rate of 20 percent or greater, the multiple offered improved to 4.3 times pre-tax profit, or about 20 percent more than their slower growth counterparts.

However, the real bump in multiple came when we isolated just those companies that claim to have a unique product or service for which they have a virtual monopoly. The niche companies enjoyed average offers of 5.4 times pre-tax profit, or roughly 50 percent more than the average companies, and fully 20 percent more than the fastest growth companies.

Nurture your Niche

Chasing “bad” revenue by offering a wide array of products and services is common among growth companies. The easiest way to grow is to sell more things to your existing customers, so you just keep adding adjacent product and service lines. But when a strategic acquirer buys your business, they are buying something they cannot easily replicate on their own.

A large company will place less value on the revenue derived from products and services that you have in common. They will argue that their economies of scale put them in a better position to sell the things that you both offer today.

Likewise, they will pay the largest premium to get access to a new product or service they can sell to their customers. Big, mature companies have customers and systems, but they sometimes lack innovation; and many choose a strategy of acquisition as a way to buy their innovation.

Focusing on your niche is one of many areas where the long-term value of your business is at odds with short-term profit. For example, if you wanted to maximize your short-term profit, you might avoid investing in new technology or hiring a head of sales, arguing that both investments would hinder short-term profit. The truly valuable company finds a way to deliver profit in the short term while simultaneously focusing their strategy on what drives up the value of the business.  

At ActionCOACH our definition of a successful business is a commercial profitable enterprise that can work without the business owner.  Our 6 Steps process helps business owners by coaching them to define their niche and at the same time focus on the 5 drivers of profitability to increase cash flow.  We then help you to leverage your business by creating systems and helping you to find and keep motivated team members to "work in" your business.  This will give you the time and cash flow to plan and "work on" your future growth and eventual exit from the business.

You can get your own Sellability Score, and see how you compare on the eight key drivers of valuability and thus sellability, by taking our 13-minute survey here at www.actioncooachsellabilityscore.com

Stop Selling!... Build relationships!

What makes a sales call a success or failure?
Are there secrets to sales success?

With today's economic conditions, there's not much "low hanging fruit" to be picked.  In today's economy, relationships count more than ever.  Only the truly professional salespeople have survived over the past few years.  

If you look at your industry, there are probably enough people still wanting to buy your product or service to keep you busy all year long.  Your challenge is, how do you increase your market share or what I like to say get your "unfair share"?

Sales are tougher to generate in a bad economy than a good one.  Nevertheless, why does it seem that some salespeople seem to do well in all types of environments?  When the economy is good, it's relatively easy for even bad salespeople to make a living.  In a good economy, often, salespeople make sales by just contacting a high volume of prospects without developing any relationships.  There is so much "low hanging fruit" out there that just about anyone can make a sale.  

There is a difference between the successful professional salesperson and everyone else.  When business is good, the majority of salespeople are just trying to get as much business as possible.  They are usually more "me" focused, than "client" focused.  Much of sales training emphasizes closing techniques.  The right sales approach involves building the client relationship, not just making the sale and moving on to the next prospect.

My TOP 2 secrets to sales success are:

1. STOP "closing sales" &  START "opening relationships" 
2. DON'T "sell" your clients, HELP them "buy"

OPEN RELATIONSHIPS... BE CLIENT-FOCUSED

Unfortunately, if you don't have a relationship it is very hard to penetrate your prospect's trust to get them to open up to you.  Just think about it.  How many sales calls do you get daily from salespeople trying to sell you something.  I can just imagine your response when the phone rings, "Oh boy, another salesperson trying to sell me something. Let me stop everything I'm doing to see if they have something I want to buy right now!"  If you are like me, you are trying to think of every excuse to get off the phone.

The biggest mistake salespeople make is trying to jump ahead in the sales process before we build any credibility.   We start asking questions before we have earned the right.  We need to earn the right to start a relationship before they'll want to engage in a relationship with us.  We can't expect that just because we've called, the prospect will want to develop a relationship with us.  Let alone want to do business with us.

So, how do the professional salespeople break through the clutter of all the other sales calls their prospects are bombarded with every day?   One strategy is to utilize current relationships.  Using current relationships, professional salespeople are able to get their prospect's attention, but most importantly, they gain some instant credibility in the mind of the prospect. Recommendations to prospects come from clients with which we have opened and built solid relationships.   

Professional salespeople are always "client" focused.   They understand that their client is thinking WIIFM or "what's in it for ME".   When you focus on opening relationships, you'll always be client-focused.

DON'T JUST SELL... HELP THEM BUY
Once you have opened the relationship and gained credibility, you can really begin to engage people.  Professional salespeople understand that people do not like to be sold, but they love to buy.  ActionCOACH's definition of a salesperson is "Professionally Helping People to Buy". 

How can you tell if you are selling someone or helping him or her buy?

The answer is quite simple.  When you meet with potential clients, are you "telling" or "asking"?  The professional salesperson's secret weapon is questions.  ASK open-ended, needs-based questions.  Find out...  

• What is the client trying to accomplish?  
• What features are most important to the client?  
• How can your product or service help the client?  

When you are asking questions, you are building the relationship!

Find out what you can do for your client and make sure he or she knows WIIFM or "what's in it for me".  By asking questions to determine needs and showing benefits, you build up each client relationship.  As you open more relationships and build each one, you gain more credibility.  As you gain more credibility, you create even more relationships.  

That's why there are two secrets to sales success.  You cannot have one without the other.  A professional salesperson must continually open new relationships and nurture those relationships by helping clients.  Follow the two secrets and your credibility in your industry is sure to increase, helping you make even more connections with new prospects.  

So, how do we break the barrier to get through to these prospects and get them to want to engage with us over everyone else trying to get a piece of their limited and precious time?  We need to first create curiosity.  Make the prospective clients want to know more by building our relationship with them.  Don't forget to ask questions and show what's in it for them.  Let's face it-- if we can't get them to want to engage with us, the chances are slim that we are going to make a sale.

Do you have a Black Belt in Business?

What does it mean to earn a black belt in the martial arts?  To become a trained killer.  No,  martial arts training is a lot more.  It's a form of self-defense and exercise.  But, most importantly, it is a philosophy or a way of life.

I got involved in the martial arts at a very early age, but didn't receive my Black Belt in Tang Soo Do Karate until I was almost 30.  I found martial arts was not only a great form of exercise and self defense, but also taught me how to survive the battles of business and life.  When I look back, what I really learned was the importance of goal setting, focus, determination, and the use of systems.

Each martial art has a series of belts or levels, which each student strives to reach before they can become a black belt.  This systematized approach provides students a process to gain mastery over a particular level of skills before moving on to the next level.  Showing the importance of setting end goals with milestones along the way to keep you on track.

My sensei (Karate instructor) taught me that each level you reach before a black belt, you are just learning Karate but once you become a black belt, you are now doing Karate.  Once you reach black belt, you now have the knowledge and wisdom to apply what you have learned.  The journey doesn’t stop there.  There are new goals and milestones as you reach for the higher levels of being a black belt.  As a business coach, I have found this same systematized approached can also be applied to any business.  

When do you get your black belt in business?  When are you “doing” business instead of learning business?  At ActionCOACH we have a definition for this scenario, “A commercial profitable enterprise that can work without you the business owner”. 

So, how get a black belt in business?  Let’s take a look at the 6 belts you must master before you can be a black belt in business.

White Belt:  At this level, the emphasis is on basic business mastery over time, team, & money.  It’s about getting the chaos out of your business and getting organized.  It’s about making sure you can make payroll and that your employees understand their roles & responsibilities in your organization.  It’s where you learn to delegate tasks to your team, so you can concentrate on developing higher level skills needed to obtain your business black belt.

Yellow Belt:  This level is where you work on creating predicable cash flow in the business.  You develop your Niche and USP (unique selling proposition), so you can start selling on value and not price.  You find out why your business is unique and valuable to your customers.

Green Belt:  At this level, you are working on creating efficiencies in your business.  You are starting to develop systems that will run your business so you don’t have to.

Blue Belt:  Here you learn how to get the right people “on the bus”-- the right team players, who will run your systems that will run your business.

Red Belt:  This level is where we start to see all your hard work come together.  You’ll start to see the synergies of your systems and team develop.  Now, you start grooming your general manager who will run your business for you.

Black Belt:  Now you’ve made it!  You’ve created a commercial profitable enterprise that works without you.  You are now an entrepreneur with a business black belt!  You are  generating passive income from the business.  You can now take the skills and knowledge which you have learned and apply them to other businesses or start investing your profits, so your money is making money.

To learn more about how you can turn your business into a Black Belt business, sign up for our next free webinar.  Check out my latest workshops and seminars www.actioncoachseminars.com