In the ever-evolving landscape of entrepreneurship, the adage “knowledge is power” couldn’t hold truer. The modern business arena is a complex battleground, and for small business owners seeking sustainable growth, understanding and harnessing the right numbers is the key to success. Just as a chess grandmaster studies the board and anticipates moves, an astute entrepreneur delves into critical metrics to make informed decisions and guide their business toward prosperity. In this article, we’ll explore the pivotal numbers every business owner should measure, the risks of overlooking them, and the transformative impact measuring these metrics can have on sustainable growth.
The Crucial Metrics: A Blueprint for Success
Revenue and Profit Margins
The backbone of any business, tracking revenue and profit margins is non-negotiable. These numbers reflect the health of your enterprise and provide insights into the efficiency of your operations. By knowing your profit margins, you can gauge how much money your business is truly making after deducting expenses. This knowledge enables you to adjust pricing strategies, optimize costs, and allocate resources effectively.
Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLTV)
Understanding how much it costs to acquire a customer and how much they’re worth to your business over their lifetime is crucial. If your CAC outweighs CLTV, your growth might be unsustainable, putting your business on shaky ground. By monitoring and optimizing these metrics, you can fine-tune marketing efforts and focus on acquiring high-value, loyal customers.
Cash Flow
Cash flow is the lifeblood of your business. It’s not just about how much money comes in, but when it arrives. Poor cash flow management can lead to missed opportunities, operational disruptions, and even business failure. Tracking cash flow ensures you have the funds to cover expenses, seize growth opportunities, and weather unforeseen challenges.
Inventory Turnover
For businesses that deal with physical products, inventory turnover is paramount. Holding excess inventory ties up valuable capital and can lead to obsolescence. On the flip side, insufficient inventory can result in missed sales. Striking the right balance through efficient inventory turnover management helps optimize resources and revenue.
Customer Churn and Retention Rates
Losing customers can be detrimental to growth. Monitoring customer churn rates allows you to identify areas of improvement in your product or service. Simultaneously, focusing on retention strategies can help create a loyal customer base that generates steady, recurring revenue.
Gross and Net Profit Margins by Product/Service
Not all products or services are created equal. By analyzing the profitability of each offering, you can allocate resources to the most lucrative aspects of your business. This data-driven approach prevents you from pouring resources into ventures that yield minimal returns.
Return on Investment (ROI) and Break-Even Point
Every business initiative, from marketing campaigns to new product launches, should be evaluated based on ROI. Knowing when you’ll break even on investment helps assess its viability and aligns with your growth strategy.
The Risks of Ignorance: Navigating the Blind Spots
Failing to measure and understand these critical numbers can lead to a range of challenges that stunt your business’s growth potential:
Misguided Decisions: Without accurate data, decisions become speculative at best. You risk investing time, money, and effort into strategies that might not yield the desired results.
Financial Instability: Inadequate cash flow management can lead to a cash crunch, hindering day-to-day operations and growth opportunities.
Stagnation: Without tracking key metrics, you may miss signs of stagnation or decline until it’s too late. This hampers your ability to pivot and adapt to changing market conditions.
Inefficient Resource Allocation: Operating in the dark about profitability by product or service can result in the misallocation of resources, hindering the growth of your most promising offerings.
Lack of Focus: Ignoring customer acquisition costs and lifetime values can lead to a haphazard approach to marketing and customer retention, impacting overall growth.
The Transformative Impact: Driving Sustainable Growth
Conversely, a strategic focus on these critical metrics can propel your small business toward sustainable growth:
Informed Decision-Making: Armed with accurate data, you can make informed, data-driven decisions that minimize risks and capitalize on opportunities.
Resource Optimization: Tracking key metrics allows you to allocate resources efficiently, amplifying the impact of your efforts on growth.
Agile Adaptation: Regularly monitoring metrics enables you to identify trends and shifts in the market, allowing you to pivot and adapt your business model as needed.
Financial Resilience: A deep understanding of cash flow and profitability safeguards your business against financial instability, providing a buffer against unexpected challenges.
Strategic Planning: Armed with insights into customer behaviour and market dynamics, you can develop more effective, targeted growth strategies.
Conclusion: Playing to Win
In the intricate game of business, numbers are your ultimate allies. Small business owners who recognize this truth and embrace the power of measuring critical metrics gain a competitive edge. Armed with knowledge, they navigate the complexities of entrepreneurship with confidence, agility, and a clear vision for sustainable growth. Remember, the game of business is won or lost based on how well you play the numbers game. We work with busy business owners who want to Significantly and Sustainably scale up their businesses. We do this, not by just concentrating on more leads, more conversions and better pricing (Although we do cover these things) but by looking a lot more strategically at the business model against the desired outcome of the business owner the vision and all stakeholders.
From this we can apply more than 15 years of ‘Blue Ocean Strategy’ of disruptive pattern thinking, to disrupt the norm, analyse the data and invite both alternative perspectives, challenge the status quo and create a path for overcoming the challenges to scaling the business effectively.
I don’t need to know the name, address and purpose or every widget – I simply need to see the pieces on the board, and the way you play the game!
Are you ready to #ADDAZERO? Get your free ScaleUp Scorecard report on the current hidden scalability and vulnerabilities within your business HERE
The quick answer is, it’s a proven, accredited Methodology we support Business Leaders to implement within their companies to Significantly and Sustainably Scale.
But to answer it more fully, you would need to know the origins of this, and why we’ve made it our mission to eradicate unemployment in the UK!
My first business was grossly impacted by the sudden and rather unexpected closure of Woolworths in 2008. At the time, we were one of hundreds (if not thousands) of suppliers to the High Street Giant, and had SEVEN employees working on the contract. That was until Deloittes placed them into administration and with it our multi 6 figure contract!
And whilst we performed a Business turnaround for our own business, the cost of which wasn’t just financial, but physical and emotional. And one I vowed I didn’t want any other Business Owner to have to face. So, I set about to determine what causes good businesses to fail.
It led me to becoming a guest lecturer on the MBA programme and heading up a team of MBA business analysts researching the cause of more than 150 National Business Failures, and subsequently surveying more than 100K SME Business Owners.
We’ve used that Data to create, test, review, revise, retest and apply a comprehensive business methodology that enables business owners to significantly and sustainably grow both themselves and their businesses, with the competence and confidence to make bigger, bolder, brighter decisions in the knowledge they have the people, systems and processes to mitigate the risk of failure.
It was only once we began to implement this, first within our own business, and subsequently with those we were currently working, that we acknowledged the opposite of failure is success. And, with the relevant elements in place to mitigate failure, all that was left is success.
Owing to its ongoing success in supporting business leaders to transform both themselves and their businesses, it became known as #ADDAZERO
Business ethics concerns ethical dilemmas or controversial issues faced by a company. Often, business ethics involve a system of practices and procedures that help build trust with the consumer. On one level, some business ethics are embedded in the law, such as minimum wages, insider trading restrictions, and environmental regulations. On another, management behaviour can influence business ethics, with wide-ranging effects across the company.
They guide executives, managers, and employees in daily decision-making. For example, consider a company that has decided to dump chemical waste that it cannot afford to dispose of correctly on a vacant lot it has purchased in the local community. This action has legal, environmental, and social repercussions that can damage a company beyond repair.
Why Is Business Ethics Important?
There are several reasons business ethics are essential for success in modern business. Most importantly, defined ethics programs establish a code of conduct that drives employee behaviour—from executives to middle management to the newest and youngest employees. When all employees make ethical decisions, the company establishes a reputation for ethical behaviour. Its reputation grows, and it begins to experience the benefits a moral establishment reaps:
Brand recognition and growth
Increased ability to negotiate
Increased trust in products and services
Customer retention and growth
Attracts talent
Attracts investors
When combined, all these factors affect a business’ revenues. Those who fail to set ethical standards and enforce them will eventually find themselves alongside Enron, Arthur Andersen, Wells Fargo, Lehman Brothers, Bernie Madoff, and many others.
Types of Business Ethics
There are several theories regarding business ethics, and many different types can be found, but what makes a business stand out are its corporate social responsibility practices, transparency and trustworthiness, fairness, and technological practices.
Corporate Social Responsibility
Corporate social responsibility (CSR) is the concept of meeting the needs of stakeholders while accounting for the impact meeting those needs has on employees, the environment, society, and the community in which the business operates. Of course, finances and profits are essential. Still, they should be secondary to the welfare of society, customers, and employees—because studies have concluded that corporate governance and ethical practices increase financial performance.
Businesses should hold themselves accountable and responsible for their environmental, philanthropic, ethical, and economic impacts.
Transparency and Trustworthiness
Companies need to ensure they are reporting their financial performance transparently. This not only applies to required financial reports but all reports in general. For example, many corporations publish annual reports to their shareholders.
Most of these reports outline the submitted reports to regulators, how and why decisions were made, if goals were met, and factors that influenced performance. In addition, CEOs write summaries of the company’s annual performance and give their outlooks.
Press releases are another way companies can be transparent. Events important to investors and customers should be published, regardless of whether it is good or bad news.
Technological Practices and Ethics
The growing use of technology of all forms in business operations inherently comes with a need for a business to ensure that the technology and information it gathers are being used ethically. Additionally, it should ensure that the technology is secured to the utmost of its ability, especially as many businesses store customer information and collect data that those with nefarious intentions can use.
Fairness
A workplace should be inclusive, diverse, and fair for all employees regardless of race, religion, beliefs, age, or identity. An appropriate work environment is where everyone can grow, be promoted, and become successful in their own way.
How to Implement Good Business Ethics
Fostering an ethical behaviour and decision-making environment takes time and effort—it always starts at the top. Most companies create a code of conduct/ethics, guiding principles, reporting procedures, and training programs to enforce ethical behaviour.
Once conduct is defined and programs implemented, continuous communication with employees becomes vital. Leaders should constantly encourage employees to report concerned behaviour—additionally, there should be assurances that whistle-blowers will not face adversarial actions.
A pipeline for anonymous reporting can help businesses identify questionable practices and reassure employees that they will not face any consequences for reporting an issue.
Monitoring and Reporting Unethical Behaviour
When preventing unethical behaviour and repairing its adverse side effects, companies often look to managers and employees to report any incidences they observe or experience. However, barriers within the company culture (such as fear of retaliation for reporting misconduct) can prevent this from happening.
Published by the Ethics & Compliance Initiative (ECI), the Global Business Ethics Survey of 2021 surveyed over 14,000 employees in 10 countries about different types of misconduct they observed in the workplace. 49% of the employees surveyed said they had observed misconduct, and 22% said they had observed behaviour they would categorise as abusive. Furthermore, 86% of employees said they reported the misconduct they observed. When questioned if they had experienced retaliation for reporting, 79% said they had been retaliated against.
Indeed, fear of retaliation is one of the primary reasons employees cite for not reporting unethical behaviour in the workplace. ECI says companies should work toward improving their corporate culture by reinforcing the idea that reporting suspected misconduct benefits the company. Additionally, they should acknowledge and reward the employee’s courage in making the report.
Principles of Business Ethics
It’s essential to understand the underlying principles that drive desired ethical behaviour and how lacking these moral principles contributes to the downfall of many otherwise profitable, effective and otherwise prosperous businesses.
There are generally 12 business ethics principles:
Respect for laws: Ethical leadership should include enforcing all local, state, and federal laws. If there is a legal grey area, professional and personal life aspects rather than exploiting a gap.
Leadership: The conscious effort to adopt, integrate, and emulate the other 11 principles to guide decisions and behaviour in all professional and personal life aspects.
Integrity: Incorporates other principles—honesty, trustworthiness, and reliability. Someone with integrity consistently does the right thing and strives to hold themselves to a higher standard.
Responsibility: Promote ownership within an organisation, allow employees to be responsible for their work, and be accountable for yours.
Accountability: Holding yourself and others responsible for their actions. Commitment to following ethical practices and ensuring others follow ethics guidelines.
Honesty: Truth in all matters is critical to fostering an ethical climate. Partial truths, omissions, and under or overstating don’t help a business improve its performance. Bad news should be communicated and received the same way as good news to develop solutions.
Transparency: Stakeholders are people interested in a business, such as shareholders, employees, the community a firm operates in, and the family members of the employees. Without divulging trade secrets, companies should ensure information about their financials, price changes, hiring and firing practices, wages and salaries, and promotions are available to those interested in the business’s success.
Respect for others: To foster ethical behaviour and environments in the workplace, respecting others is a critical component. Everyone deserves dignity, privacy, equality, opportunity, compassion, and empathy.
Compassion: Employees, the community surrounding a business, business partners, and customers should all be treated with concern for their well-being.
Fairness: Everyone should have the same opportunities and be treated the same. If a practice or behaviour makes you feel uncomfortable or place personal or corporate benefit in front of equality, common courtesy, and respect, it is likely unfair.
Loyalty: Leadership should demonstrate confidentially and commitment to their employees and the company. Inspiring employee and management loyalty ensures they are committed to best practices.
Environmental concern: In a world where resources are limited, ecosystems have been damaged by past practices, and the climate is changing, it is of utmost importance to be aware of and concerned about the environmental impacts a business has. All employees should be encouraged to discover and report solutions for practices that can add to damages already done.
The Bottom Line
Business ethics concerns employees, customers, society, the environment, shareholders, and stakeholders. Therefore, every business should develop ethical models and practices that guide employees’ actions and ensure they prioritise the interests and welfare of those the company serves.
Doing so increases revenues and profits, creates a positive work environment, and builds trust with consumers and business partners.
In the last few months, I’ve quit, two different business activities. Even though, both were serving me and my business well!
In the summer, I quit attending a series of trainings I had signed up for and was learning much from. Then last week, I quit a networking group I have attended for well over a year.
On both occasions, what I signed up for was being delivered, and both I (personally) and we (professionally) benefited.
However, I became aware, of a significant and jarring difference in the standards by which we operate. And it eventually resulted in no longer being aligned!
Whilst, in modern-day purely ceremonial functions, as far back as Roman warfare and medieval warfare the standard-bearer had an important role on the battlefield. The standard-bearer acted as an indicator of where the position of a military unit was, with the bright, colourful standard or flag acting as a strong visual beacon to surrounding soldiers. Soldiers were typically ordered to follow and stay close to the standard or flag in order to maintain unit cohesion, and for a single commander to easily position his troops by only positioning his standard-bearer, typically with the aid of musical cues or loud verbal commands. It was and remains an incredibly honourable position. And one carrying a considerable risk, as a standard-bearer would be a major target for the opposing side’s troops seeking to capture the standard or pull it down.
This is also reflected in the context of the Olympic Games. The flagbearer is the athlete who has been chosen to represent their country at the opening and closing ceremonies by carrying the flag of their country and leading their country’s athletes, coaches, and aides.
So what are business standards?
Company standards refer to a set of values, performance benchmarks, and beliefs. All of these components make up the character of the business. Look at it much like you would the personality of a person. They are a significant determinant of how other people view or form an opinion about your brand.
Management standards are a critical component of running a business. It determines the level of trust and credibility amongst different stakeholders. Such include customers, employees, suppliers, and the public at large. They are also business guidelines that determine every process you make in the company.
Management standards cover a wide area. You look at performance, quality standards, safety, and testing, to name a few. The entrepreneur must come up with a set of rules that everyone must follow.
There are two facets to setting up business management standards.
The first is how you, as an individual, want to run your company. It is voluntary but goes towards establishing greater confidence amongst customers. Deciding to use local ingredients in a restaurant is a personal decision. The law cannot come after you if you decide to source your ingredients elsewhere, including internationally.
The second complies with regulatory authority guidelines. If you are in the medical field, it is a rule that practitioners have the relevant certification. It is a regulatory requirement and breaching such can result in legal repercussions.
Values/Standards – what’s the difference?
Values help us live with direction and purpose – like a guiding compass. Whatever is going on in our lives, our values can show us a path forward, and help us make better choices. Values are also intimately linked to our sense of self, and they’re essential for our mental health.
Values may be expressed as a stand-alone statement and form part of an authority’s code of conduct. Standards describe acceptable workplace behaviour and help guide the practical application of values. Standards are usually set in a code of conduct or similar.
The British Army Leadership Code is founded on Values. To them: Courage, Discipline, Respect for Others, Integrity, Loyalty, and Selfless Commitment are much more than words on a page, they are what the British Army stands for, and what sets us apart from society at large.
I may no longer be a serving soldier, but forever a veteran. I was introduced to, engaged with, accepted, and now live by a set of standards to which all future decisions are made. Based on Ethics, Sustainable growth, Active Listening, and Win | Win | Win outcomes.
So, why did I quit?
Well, because despite benefiting from their services, once we had learnt about HOW they do business, I realised this doesn’t align with our values of how WE do business.
You may ask: But surely as long as they are living within THEIR values, why does that matter? Surely. YOUR values are for you, not to ‘cast’ on all others?
Well, that may be true, until it’s not! You see, Like attracts Like. We ultimately want to do business with people like us! And, once you have learnt something that doesn’t meet the same standard/values match as yourself, it begins to bring into question your belief in that value, how important it is to you, and whether are you compromising on it, by continuing to ‘support’ someone else with differing views of the world?
Trust me, I’m not saying we are always right. And it’s important we use these opportunities to reflect, go back to our own standards, principles, and values and centre check to determine why we believe what we believe.
But, once you have done so, ACTION is required. Either to review and revise your own beliefs (and understand what caused a change in them) or to DEMONSTRATE your own values by living by them – ALWAYS.
My final comment here is regarding 9-5…
We may (I chose not to) dress in a certain way “For work” we may choose to act (I also chose not to) in a certain way “whilst at work” we may (accidentally or purposefully) create a WORK persona. Something we ‘step into’ as we leave the front door, and leave outside as we return home.
I know, that as a serving soldier it was imperative for me to be able to do this effectively. My wife and son didn’t require the skills, mannerisms, and behaviours of a Rapid Deployment Soldier around the home. Likewise, my deployment team didn’t require a husband or father. There was a need, to ‘switch on’ and ‘switch off’ the various attributes of each role. But, one thing that remained constant throughout was my attitudes and behaviours. My VALUES towards Courage, Discipline, Respect for Others, Integrity, Loyalty, and Selfless Commitment remained (and remain) constant.
What Standards / Values does your business uphold? and how do you demonstrate this to others?
One of the things I’ve observed in the last 18 months or so, is how more and more people are telling white lies!
I’m not calling people liars – we’ve all been guilty of not wanting to admit the real reason we are late to attend the endless zoom meetings was “I needed the loo”. But there appears to be a growing urge to tell everyone “everything’s fine” when clearly it’s not!
Social media (and people’s addiction to it) has seen endless scrolling of “Success stories” with people draped over expensive cars, scantily clad exotic holiday pics, and sumptuous surroundings whilst out for dinner. Viewers see this as a personal challenge against their own microwave tea, and a race to do better!
And so, the lies begin. It’s not intentional, but a ‘social necessity‘ to fit in, to be someone to be accepted!
However, what is even worse than this, is the lies we are told and those we tell ourselves!
Meaning, mastery and money are all essential in today’s business environment. Meaning and mastery will lead to more money. Many small business owners instinctively do these things, but most business advisers only focus on the money. They tell their clients to make the money first, then they can invest in mastering their business and making meaning in their community and life. Unfortunately, that sets up a cycle that never gets them there. Instead, business owners need to be encouraged to invest in meaning and mastery from the beginning.
Most small business owners are very good at the work of their business. As Michael Gerber says, “they are technicians who get an entrepreneurial twitch”. Usually in response to working for another technician who had an entrepreneurial twitch. This means they are not clear on what it means to run a business.
In reality, most small business owners are freelancers, (or as Gerber refers) Business Operators not owners of businesses. And yet so many Business Advisors are pushing them to act like a business?
Let’s have a look at these pervasive lies
You have to wear many hats
This perpetuates the myth that business owners have to do it all. Even worse is the myth that they have to know and understand it all. Who can possibly know all that? This is the single worst bit of advice ever given and it is what makes small business owners feel inadequate.
The most important hat a small business owner needs to wear is the sales hat. Making sales is what defines a business. Making sales will pull a struggling business into the black. Making sales is the crucial first step to everything else that follows. The best advice to give small business owners is to go make sales.
After they are making sales, teach them the strategy of the business and how to lead a team, not how to do everything in business. Offering ‘all you need to know workshops’ on how to do bookkeeping, marketing, project planning, hiring/firing etc, lull our business owners into thinking that all they have to do is execute on the tactics properly in order to succeed. We should be telling our business owners to get help as often and as early as possible.
Yes, it’s good to know what needs to be done, but not to know every last detail of how to do it. To move from Business Operator to Business Owner we must know enough to find the right person to do it!
The worst ways a beginning business owner can be spending their days is in designing their business cards or a poster or trying to set up their bookkeeping.
“Only once the owner has made the physical, mental and emotional switch from operator to the owner can the business thrive”
Starting business owners don’t have enough money to invest in themselves or their business
So advisors touting for clients, give them yet another free 101 workshop. Telling them a million and one things that they must do in order to grow their business. Whereas the reality is it is keeping them central to the business and forcing them back into a JOB.
The most successful small business owners I meet are the ones who invest in themselves early and often. They understand their strengths and they outsource the rest. They know the highest and best use of their time is in talking to and serving customers.
And advisors often tell them, “by the way your time isn’t worth very much”. A good friend who runs a bookkeeping business, tells people directly: They can do your bookkeeping faster than you can worry about it. And It is true. Yet Eventbrite is full of Advisors and Accountants giving Business Owners 3-hour workshops on how to do their bookkeeping, then expect them to take a couple of Sunday afternoons a month to do it.
Or they could outsource it to a bookkeeper for around £100pm And it would be right. Plus they got advice from a professional who does bookkeeping for a living.
Instead, so many still do an inferior job, that takes them three times longer and often leads to either the wrong or poor results WHILST keeping them away from customers/prospects and earning more money! Because they went on a course!
Finally, that’s assuming they need bookkeeping done on a regular basis, which most didn’t.
Most Advisors don’t teach them how to engage professionals early. Instead, they suggest that when they get big enough, they can hire a marketing expert to take care of their marketing. What they really need, is to hire a professional to help them refine their message. A professional has the experience to tease out the words and message that matters. Never mind about flyers, radio or podcasts. Get the message right first.
Marketing, finance, operations, and HR are the fundamentals of business
Maybe. If you have a big business with a division of people with expertise to take on each functional area. Again, no one person can master all of these. These are functional areas of business, the understanding and management of which makes the running of the company work better. but they come after, much after the customer is clearly defined, the problem your offer is solving is nailed and you are ready to scale up in a big way. Having all of these perfectly in place will give you a well-run company, not necessarily a successful one.
Business development takes several years of talking to customers, testing offers and making sales. Until then, the focus is on doing the work of the business, not managing a company.
During the first couple of years, bookkeeping and financial information are only needed to file taxes. It’s more important for our business owners to be agile, to experiment and always be testing. Financial Statements are backwards looking documents and they only track money. For instance, it’s not enough to know the impact on revenue of changing prices. It’s more important to know who the new pricing attracts and repels, the cost of delivering on the new pricing and the change in expectations.
The message, loud and clear is, that you must learn this stuff and do it yourself FIRST. It’s good for you because then you get to understand your business from the ground up. The truth is that struggling to do a bad job at a task you are not suited to is not good for you. Doing a bad job at copywriting doesn’t help you understand your marketing message. We should encourage our business owners to hire professional help, so they get a professional result.
Profit is the most important number
Big business uses many metrics, not just profit, to run their business and yet we tell small businesspeople that if they do their bookkeeping, they have their numbers covered. The most important metrics to track may not be on the financial statements.
For the first couple of years, spending is going to be distorted towards start-up costs. Every available penny is put back into the business to help it grow. A true picture of the financial health of the company won’t emerge for a few years, yet. As a Coach, my job is to help the business owner manage their money and their cash flow and in giving them tools to evaluate the opportunities that will help them grow their business.
The business won’t settle enough to show trends emerging out of the noise until several years in. Focus on what’s really important like landing another £5000 a year customer, not saving £20 a month on the phone.
A business plan is crucial before you start a business
We’ve all said it “Fail to plan and you plan to fail.” What about “No plan survives first contact with customers”?
Creating a business plan is premature before a single sale is made. It can’t be done until customers are identified, what they want and how they want it. These questions can’t be answered at a desk. They can only be answered by talking to customers. When that step is done properly, the business is up and running and the business owner’s time is best spent on making sales, delivering, and testing.
For instance, Ben comes to you wanting to open a pet store. The first task you set him should be to send him out to find his first 5 customers to find out what they really need and want. If Ben can’t do that or isn’t willing to do that, then all the ‘entrepreneurial traits’ tests won’t help, and the best-laid business plans won’t make the business a success.
That goes double for marketing plans. The first year should be devoted to sales and not marketing. We all know 100 people, who know 100 people, etc. Fifty pet owners spending £50/ month will give Ben a base upon which to build. That takes sales, not marketing. Those sales should be well underway before signing a lease and paying for inventory.
The business plan focuses on financial projections, market analysis and demographic customer analysis. That’s great if you know who your customers are, which you can’t know if you don’t have any. The best way to do a market analysis is to spend a week selling into that marketplace, not a week spent searching statistics and playing with spreadsheets.
We should encourage a focus on business models, feedback loops and pivots. Then on customer engagement, automation rollouts or scaling. When our business owner is ready for scaling up, hiring and financing, then that’s when an executable business plan should be written.
Work hard
They attend workshops on how to be more productive and on time management, but not on courage. Any person having procrastination issues is dealing with fear, not the wrong method for managing to do’s. The greatest service we can give our business owners is to name it and help them deal with fear and courage.
Most teach business owners how to do all the work of running a business instead:
We should be helping them focus on what not to do as much as what to do. On causing things to get done rather than doing them. The “Really busy” answer to the question, “How are you doing?” has become a badge of honour. We let them get away with that. We tell them we appreciate them taking time away from their busy day to meet with us.
We should demand, not just encourage our business owners to take time away, time to think every day. We should make it clear that they are the most important piece of their starting business and therefore looking after themselves is vital to business success. We should encourage them to meet for coffee and masterminding regularly.
Working harder on the wrong things won’t get better results, it will only get our business owners to burn out!
But even worse, here are the top 6 lies Business Owners tell themselves
“I can’t afford it….”
As in, “I can’t afford to pay someone £20-30 per hour on this task.” While on the surface this lie sounds like you are concerned about your budget and their bottom line. What it really means is that they aren’t confident enough in your ability to create higher-value items/services. This could be because they feel that you lack the skills to do anything of higher value or it could be a cry for help time management-wise, as they don’t then know what they would do with the time they have gained back!
“I don’t have the time…”
They spend their day putting out fires and handling other people’s tasks. Is it any wonder that they don’t have time to grow your business? Business owners have to Stop telling themselves that they don’t have time and start looking at exactly what they are spending their time on. Are they high-value tasks or are you putting out fires?
“No one can do it as well as I can…”
This lie is code for: “I can’t delegate that kind of authority, what if they make a bad decision? What if they mess up a client relationship?” Of course, there are different levels of delegation based on the experience set and abilities of a team member, but business owners who instinctively hold tight to the reins of all decisions and authority in their business end up being owned by their businesses.
“Let me check my diary and get back to you…”.
This is the lie we tell ourselves instead of facing the harsh reality of our dependent relationship with our business. Whereas what they are actually saying is: “I want to sound busy, but the reality is I’m not confident to move forward yet!”
“I’ll just wait and see what happens…”
As in, “I know I have a real staff issue, but I’ll just wait and see if things straighten out on their own first because I don’t have the competence or confidence to address it.” When you have a real issue, deal with it. Immediately. Don’t let it linger or fester while you “hope” it will resolve itself. Why do so many entrepreneurs do this? Because they are not willing to face the temporary discomfort, usually emotional discomfort, of meeting the moment directly.
“I am not making any progress….”
If the first five lies weren’t bad enough, perhaps the worst lie of all is when you tell yourself that you aren’t making any progress in your business. You find yourself saying “Argh well. Next time….” Stop and celebrate your victories. Don’t deny the results or downplay your successes. Savour the moment and take in your progress.
What’s The Answer
The sooner business owners get out of the building’, talk to customers and make sales, the sooner they will get over the fear. The sooner they understand their role is not to know everything, but to find and partner/recruit/JV with those who do. The sooner they begin sharing not only the successes but the problems they face and ASK FOR HELP. The sooner they will make REAL and LASTING progress.
Yes, it’s hard and yes, there will be resistance, for which every coach must be ready and prepared. However, by working with a coach to overcome these, you will be stronger, more capable, and more resilient it.
One of the very best ways of achieving this is through Mastermind.
At the time of recording this, I’ve had the privilege of being involved in Mastermind for 17 years and now host mastermind groups both on and offline. They truly are a most remarkable and unique place, where magic happens.
When ego is left at the door, and innocents enters. When bravado and BS are left at home, and vulnerability takes a seat. When every individual present recognises that Together Everyone Achieve More. It enables owners to ask, share, learn together and benefit from each other’s knowledge, experience, qualification, and strengths. In every mastermind, business owners encourage, support, and hold to account for each other for the progress and direction each is taking.
We all know business is changing – the way customers engage, the way it’s delivered, and even the way people pay. Shouldn’t the support you access change too?
Here at My TrueNORTH, The Ethical Coaching Company, we support Business Owners to Significantly and Sustainable grow both themselves and their businesses, by hosting a series of Mastermind Groups.
Hosted both online and in person, these groups are the catalyst for more and more business owners to #addazero. Whether it is the mindset/motivation or vision of the business owner, through to the systems, processes and people required to run the business. From marketing management to sales certainty, our proven 8 elements are fundamental to the ongoing growth and success of all those who attend.
Today is a day I never considered would happen – but it has!
I can’t put an ‘actual date’ on when I began coaching? You see, long before I ever qualified as a coach, had I continually learned, practiced, and shared my learning with others, that they may benefit also. Throughout the running of my last FOUR businesses, I’ve forever asked, empowered, supported others within the team to excel in their forte.
Prior to that, in my time in change management within the PLC world, I was forever asking, probing, enquiring with others as to how they could continually improve, offer up a new idea and take charge of implementing them. And prior to that, throughout my Military career, qualified as an Adult Education Teacher, and continually learned and then shared with others.
So, it was both an honour and privilege in 2014 to be nominated (and subsequently won) a Kauffman Institute Global Entrepreneur ‘Big Impact to Business’ Award, for the work we were doing in researching and sharing the cause of Big Business Failure.
Then, a year later, I was flown to the US, to present our findings to the Kauffman Insititute and many of their entrepreneurship scholars, only for them once again to acknowledge the level of content we shared and its impact it had on the audience. By awarding the event as a Global ‘Big Impact to Business’ Event.
And, in 2017 I was invited by one of the United Kingdom’s largest investment management companies to an event, at which we were added to their ‘Clear Business Thinking’ POWER 100 list recognised for the Ethics to which we both operate and share with our clients.
However, early today I have been bestowed with an acknowledgment that gladly takes pride of place amongst all of these other accolades!
For as long as I’ve been in Business – Ralph Watson’s name has been synonymous with the professional coaching fraternity. A well-established and highly respected figure throughout not only the UK coaching community but worldwide. Having forged a coaching career over four continents and almost four decades.
As Founder of the International Association of Profesional Coaching, The APC grew out of the realisation that a great many people in the coaching profession are seeking a membership body to join that offers something different from that currently available. It is the passionate belief in the immense potential of every human being and the tremendous support that high-quality coaching, training, and personal development intervention offers in helping people to achieve that potential that underpins our work and our commitment to building something more than just a membership organisation; a supportive and sustaining community.
The APC has become an independent professional membership body dedicated to promoting and supporting the highest levels of quality, professionalism, and ethics in the fields of coaching, Neuro-Linguistic Programming (NLP), and allied disciplines, such as hypnosis, at an INTERNATIONAL level, with a growing membership from across the world of those seeking to join, and benefit from such an organisation.
Ralph and I have known each other for a good many years, originally meeting through both being professional keynote speakers on the Euro-circuit. And subsequently, as fellow coaches and NLP practitioners, attending many of the same events, either as speakers, workshop facilitators, or delegates. I have long supported the work of both Ralph and the APC, and benefited both personally and professionally from both Ralph and the APC.
Ralph and I had arranged to meet this morning, for what I thought was for me to share more with him, regarding the progress we are making in preparing to license the methodology enabling other suitably qualified and experienced coaches to offer this also.
However, Ralph clearly had an alternate agenda!
You see, whilst I’ve closely followed both Ralph and the APC, He has also been following the progress and contribution we have been making!
“I am delighted to confirm the invitation to Fellowship with the Association for Professional Coaching. This position is by invitation only and is extended in recognition of your ongoing contribution to ethical and professional coaching and work in this field.”
I have written extensively about the power of awards. I continually encourage my clients, to be more conscious of the impact they have in the world, and to stop and acknowledge recognition when it is given. And whilst qualifications and experience are both essential, both can be learned and earned, but neither automatically make you nor determine you are ‘good’ at your job.
Being nominated for any form of achievement or public recognition is a significant and important milestone. Becoming a finalist and even a winner even more so. To be ‘measured’ against others, and determined by either a judging panel of experts or our peers as having ‘tipped’ the balance is a huge moment. However, today has brought a tear to my eye. To be personally invited to accept the highest level of recognition from an independent but global organisation specifically designed to support the professional standards within our industry is for me the highest accolade one could ever have hoped to achieve.
It is with immense gratitude and as much humility as I can muster, that I proudly share: From this day forward, I am now a Fellow of the International Association of Profesional Coaching.
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