Cash rich, but time poor

Are you too busy making money to have the time to enjoy it? I meet a lot of business people in the work I do. Some are really successful. A lot are doing OK, making money but working really long hours and usuallly 6 days a week.

 if you're continually tired it’s difficult to keep your momentum going. You may unknowingly give your customer poor service. And sometimes you might think ‘what's the point!’

Your health may suffer as you don't have the time to look after yourself. Relationships with family and friends may suffer as you are short-tempered and resentful of the demands they make. Your business may suffer as you spend most of your time working ‘in’ the business leaving no time for planning for the future.

Successful business people do at least 5 key things to create a business that delivers them great results. Just think how it would feel having more energy, having the time to exercise and eat healthily, having the time spend with family and friends in a relaxed manner.

So what are the 5 keys?

1.      Get your price right

If you don’t charge enough you will never make enough profit and you wil spend your time just trying to keep up with your work

2.      Delegate or outsource

You can’t do everything so don’t try. Why spend the time learning how to use book-keeping software when you could be marketing or meeting prospects?

3.      Differentiate yourself from your competition

Your customers will only choose you on price if there’s nothing that differentiates you from your competitors. Know what makes you special (in the eyes of your customers, not your mum!)

4.      Know who your customers are

Not everyone is your customer so you need to pick who you want. This will dictate everything you do in your business

5.      Measure what’s important in your buisness

Don’t leave it to chance. Decide what measures are important to your business and look at these regularly (and by that I mean monthly)

If you would like a free copy of my e-book ‘7 Mistakes Small Business Owners Unwittingly Make…. and how to avoid them’ then email gloria@murrayassoc.co.uk

How do you know if you charge enough for what you do?

 Are you cheap? Are you good value? Do you give customers great service? You have to choose which two are important to you as you can’t be all three – it just doesn’t work. Something’s got to give.

Pricing is key to the profits in your business. Over the years I’ve seen so many businesses go out of business because they didn’t charge enough. They ran themselves ragged doing a great job and giving great customer service at really low prices. But in the end it wasn’t enough and they gave up. It was too much like hard work and without the rewards.

So think about what you do. Have you forgotten to charge for something that’s an integral part of your product or service? Is there something that takes longer than you had anticipated when you first set your prices?

Are you being unrealistic about the quality of customer service you can deliver at the price you charge? Please don’t drop the quality of your service, your good customers will happily pay more for this. Do you like crappy service? It costs more but it’s not something you can compromise on.

Do yourself a favour, have a look at what you do and how you charge for it. At the end of the day your customers will choose on price if that’s the only difference between you and your competitors. Give them bloody good service and let them know you care. They will pay more and stay with you longer

How do you feel about change in your business?

It can be hard to change what you’ve become used to. But in reality business is all about change and reinvention. Nothing stays the same, society changes, what’s hot and what’s not changes. We’ve got to keep up with this or our business will shrivel up and die.

Have you ever seen this happen to any business?

I can think of a few examples in the recent past. Woolworths for one, Oddbins being another. There were undoubtedly lots wrong with them. But the 3 that are easy to see are:

•    they didn’t move with the times
•   they did nothing to combat the threats from competitors
•   they didn’t analyse the way their markets were going

So how do you manage this along with everything else you have to do in business? It’s back to the business cliché – spending time working’on’ your business and not ‘in’ it. In practical terms it means taking time out, at least once a month, to examine what’s happening in your business and create time to think up new ideas. You don’t have to do it all yourself, if you have a team they will be happy to help – once they get used to the idea of being asked!

Get a non-exec, a mentor, a coach, a business friend or someone you know and trust. Ask them to come and spend at least an hour and  half with you each month looking at your business.

You can’t see the label when you’re inside the bottle! It’s the same in business – an outsider’s perspective is wonderful. It will hold you accountable for all the things you know you need to do. You will get to see your business through the eyes of a ‘customer’. You’ll have a sounding board for all the ideas you have, the worries you have and maybe the insecurities you have about your business.

Don’t take my word for it, why don’t you try it for 3 months? What harm could there be in that?

Who are your customers?

Do you give much thought to who your customers are? It’s really easy when first starting your business to go after anyone who will give you some money. Then after a while you find that your time is taken up with lots of customers, some profitable and a lot that aren’t. How did that happen?

If you’re in that situation what can you do about it? Take a big breath and get rid of the customers that give you most of the hassle, don’t pay on time, and want lots of discount. It’s the old 80:20 rule, 20% of your customers probably give you 80% of your profit and conversely 20% of your customers probably take up 80% of your time.

By getting rid of them you can offer the customers you do like a much better service and clear the way to attract the customers you do want. You will have more time to go back to your existing customers and tell them about the other products or services you offer and help them spend more money with you.

You can then think about who your ideal customer is and write a description of them. What do they look like, what age are they, do they have kids, how much do they earn? Whatever is relevant to building up your customer profile.

Once you’ve done that design your marketing to attract them. Your customer profile will dictate how and where you market and advertise. By the end of this process you will have a better business and you’ll enjoy serving the fantastic customers you have.

Why are YOU in business?

Did you ever feel there was a ‘why’ missing from your business? I don’t mean the money or the freedom but maybe something a bit bigger! How can you design a business that not only gives you what you want, what your customers want but that can give back too?

The future

I’ve seen the future of business and it’s really awesome. In fact WOW!! Have you heard of B1G1?  I hadn’t until I went to an accountant’s conference recently. I know what you’re thinking, nothing inspirational happens in the accountancy world – but you’d be wrong.

Paul Dunn, an internationally famous inspirational speaker told us how this came about and I struggled to keep the tears from my eyes. I came away more fired up than an accountant ever should be and now I know I can play a small part in changing things for the better.

How?

B1G1 stands for Buy 1 Give 1 and it’s a way that business owners can involve their clients and employees in specific charitable projects. So for instance if you are a café every time someone buys a coffee they could give clean water to 1 person for the day in Malawi or Ethiopia. Did you think you could make a difference like that by buying something?

100% of the money goes to the project, it’s not swallowed up by admin fees. As a business if you want to join you pay a fee and that goes towards the admin. I’ve signed up on behalf of Murray Associates and in the past month we've sent 45 kids in Nepal to school for a month.

I am so excited I can hardly contain myself. I’ve found my ‘why’ and I’ve been waking up everyday thinking about who else I can tell about this. So now I’m telling you. Check out www.b1g1.com and see what you could do to make a difference.

Turnover or Profit, which would you choose?

Turnover is vanity profit is sanity! You’ll always hear me saying this.Why? Because it’s easy to have £1m turnover and not much profit. You can be a busy fool, so the profit is of major importance.

Being an accountant I’m always around business people and I love to hear about their business. But as soon as I hear someone bragging about their turnover I get alarm bells ringing in my ears.

Don’t just set goals for your sales make sure you have a profit target as well.  It’s really easy to make unprofitable sales – it’s called giving it away! What’s the easiest way to make a loss? Don’t charge enough for what your doing. So make sure you’ve got a really good handle on how long things take to produce or service. Look at your whole process and what’s involved.

It can be too easy to think about your profit in terms of an hourly rate and compare that to a salary. Remember if there’s only you in the business then you can’t spend 35-40 hours a week producing or serving your customers. You’ve got admin, you’ve got quotes, you’ve got meetings!

In general, one third of your time will be spent generating the money and two thirds doing everything else. Doesn’t look quite as generous now, does it? Set your profit targets and then work out how you can get there. And if you’ve got incredibly tight gross profit margins I would look at what you’re doing and ask if it’s worth all the hard work.