Extraordinary People

Measure the Results of Your Business System

Last time we talked about the importance of having a system and putting the system in writing in the 
article Run Your Business Like Clockwork.

Now let’s explore the value and importance of evaluating the success of your business system. Defining and documenting your business system takes hard work and dedication; but the work doesn’t end there.  You need to ensure that the system is effectively working for your business.  The best way to do this is to measure the results.

Would you spend £5,000 on a direct mail advertising campaign and then not measure its effectiveness?

• Did the phone ring?
• Did it drive traffic?
• Did it convert shoppers into buyers?
• Did it bring new people to your business that wouldn’t have known of you otherwise?
• Did the cost of advertising pay for itself with incremental sales?
• Did it further your brand awareness?
• What was the return on investment? (ROI)

Once your system is defined, documented and in place – it is time to evaluate the effectiveness.

Evaluating Systems

Systems should be dynamic. When you notice that you aren't getting the results that you expect from a particular system, you might be tempted to jump to an innovation phase, to step in and immediately implement changes you think will help. Resist this temptation! Don't even think about it until you've taken a good hard look at what's really going on.

When you document your systems, you must have clearly defined and quantifiable results so that you know how to evaluate your efforts.

It's the only way to truly determine if you're systems are effective.

Real Life Example of the Value of Evaluating Your Systems BEFORE Making Changes:

One of my clients owns a conference centre. After great deliberation, she and her key staff developed a system that was supposed to be producing a lot of new leads. They documented the system, they trained everyone to use it and they rolled it out with a lot of fanfare — after all — the intended result was to increase leads in a big way — this was going to have a huge impact on their business.

After rolling out the "new and improved" system, sure enough, they did attract some new leads. But during one of our coaching calls we took a good hard look at the data — we quantified the results and realized that although it felt like the systems were working, in actuality, they weren't getting any more leads than they were before. Even though they had spent time, energy and financial resources aimed at producing a better result, the bottom line was that it just wasn't working. If we hadn't taken the time to evaluate the system, they wouldn't have been aware of the problem and they wouldn't have been able to go through the process of innovation to fix it.

Systems evaluation is an essential (but often forgotten) step in understanding your business better. By taking a good hard look at your systems and their intended results, you can determine where innovation (or possibly elimination) needs to occur.

Stop back, because next time we’ll build on this idea of having a business system and continually measuring and evaluating by talking about how to know when change is necessary.

In the meantime, here are a few additional articles on evaluating your business system that you may find of interest.

Daniel Kehrer offers tips and techniques for giving your business an Annual Check-up in an article of the same name.

Looking to measure the financial success of your business?  Carter McBride offers Five Tips for Measuring Your Business Success.

John Jantsch offers 4 Metrics for Measuring Your Business Success as it relates to your brand awareness.

Are You Burned Out From Working in a Business with No Boundaries?

Boundaries…another major issue that many small business owners struggle with.  I’m talking about self-imposed boundaries that keep you sane, keep you productive and keep you from not giving away the store.In this difficult economy, many businesses are so afraid of not getting or losing a sale that they let prospects and clients alike walk all over them and get anything they want.  Have you ever had a client negotiate a project down in scope to get a lower price and then come back and want you to add on the stuff for which they didn’t want to pay for free? Did you give in?

It’s very important that you set boundaries around the operation of your business.  These boundaries should fit in with your general business plan such as minimum fee amounts or the total number of active clients you can carry at one time. 

Other operational boundaries could include what days you do and do not work, when you are and are not available for phone calls, and when you respond to email messages, instant messages, tweets, etc.

Operational boundaries tend to be clear-cut, black and white guidelines, but there are also more subtle boundaries to consider as well.  Subtle boundaries often revolve around things like what clients you’re willing to work with.  For example, a prospect who cancels 3 times on you, or a customer who complains every single time they walk in your business' door.

The best part about clearly identifying all of your different boundaries is that you’ve now created “policies.”  Policies take the “personal” element out of the equation.  When you tell someone that this is your “policy” it means that it is applicable to everyone and you’re not just choosing to treat this particular client or prospect in this manner.

The word “policy” often tends to be of concern to small business owners because they see policies as rigid and non-breakable.  That’s not true!  It’s your business.  You can make exceptions!  Simply clearly communicate that an exception is being made and the reason for the exception. 

However, you must also be careful about exceptions to ensure that you are not just making excuses to avoid sticking to your boundaries.

Instead of thinking of your boundaries as a leash restricting your activities, think of them as your suit of armour.  They are what protect you from bad business practices and bad clients that are the main causes of burnout.

Are Sales and Clients Falling Through the Cracks?

We’ve been looking at how systems affect the bigger picture of our business where the importance may be a bit more difficult to grasp for those fighting for survival.  So let’s take a look at the importance of systematizing at the ground level.

Do you ever get that sinking feeling in the pit of your stomach when you realise that you’ve let a potential client fall through the cracks?  You didn’t follow up and now they’ve grown cold.  Or how about this one!  Have you been getting lots of people saying they’ll do business with you and it never materializes?  You’re missing very important systems!

Prospect Follow Up

When you’re out networking and you meet someone new, what do you do next to manage them as a prospect?  A very important system that is often absent in small businesses is a fully developed system to take a prospect from first meeting to ultimate determination as client or not a client. 

The second communication is crucial to the likelihood of that person becoming a client.  Wait too long and you’ve lost the initial rapport you built and they may not remember you.  This second communication is also the point where you establish expectations of future communications.

So who is responsible for the second communication and what type of communication is it?  Do you do it yourself or is it something that a staff person can handle?  Is it an email, handwritten note or phone call?  If it’s a written communication, do you have a prepared template to follow so that you save the time of creating original content? 

Originality and personalization is important, but not as important as time frame.  Often people put off that communication because they’re not inspired to write the “right” thing.  And then, too much time goes by and the opportunity is lost.  This is a time when you must strike when the proverbial iron is hot.

Closing Business

A second area where lack of a system could be costing you money is in closing a sale.  Have you ever gotten a verbal commitment to move forward and then couldn’t get the “new client” to complete the paperwork or make the payment to take the next step?  Then all of a sudden they aren’t returning your calls and email messages!

A proper system can help increase the odds that the verbal commitment leads to a true client. Buyer’s remorse is powerful and if you aren’t careful, you’ll not only let them get off the hook, you’ll help them!  When you have a concise system of next steps that is clearly communicated at the time of the sale and that includes direct contact with you soon after the sale, you’ll make it much more difficult for the new client to back out.

Is lack of systems costing you money?  If you’re not ready to systematize your entire business, I highly recommend that you look at those areas crucial to business revenue and develop systems that will increase your odds of success!

Are You the Biggest Asset in Your Business? Should You Be?

If the owner of every small business got hit by a bus today, most of those companies would be out of business before the bodies hit the pavement.  A scary reality in most small businesses is that the owner is the largest asset in the company and that without the owner, the business itself wouldn’t function.  It doesn’t have to be that way!  Even if you’re a solopreneur, you can still build a business that would operate without you.
I know that we all like to believe that we’re completely indispensable.  Those who have worked in large corporations definitely know that everyone is dispensable.  However, because we don’t want to believe that to be true, when we finally set off and start our own business, we purposely build it so that we cannot be.  Unfortunately, we’re shooting ourselves in the foot when we do so!

We’ve been talking about Standard Operating Procedures (SOPs) and how important they are even for solopreneurs.  If the terminology is keeping you from taking action, then wipe SOP away and think of it as “Systematizing” your business.  Most small business owners aren’t running a business – they’re running a job with multiple bosses they call customers. 

I say that because if you took them out of the equation, there is no business.  The “owner” does most – if not all – of the work and there is no documentation, assets or specialisation of the company that sets it apart from its competitors. 

When you systematize your company (and document the systems), you are building an asset separate from yourself. In sports terminology, you’re building a playbook that someone else could read and pick up where you left off.

Think about it!  If you systematized your company and got hit by that bus, your spouse or heirs could sell your company (you, on the other hand, wouldn’t even be fit for organ donation!).

Another thought...I bet you want to retire someday!  Wouldn’t you like to have something to sell to supplement your savings instead of just stopping the business?  Or, if you have employees, wouldn’t you like to be able to take a step back and let the business run itself?  Unless you systematize your business, neither of these things can happen.

If your company is just getting started, it’s the perfect time to start systematizing and continue doing so as you grow.  If your company has been in existence for decades, it’s never too late to start; it’ll just be a much bigger endeavour.  In either instance, you’ll be thankful when the inevitable day comes that you can’t or don’t want to do it all!

Positive Mindset + Effective Standard Operating Procedures (SOP) = Successful Business

Earlier, I talked about how the best business system or standard operating procedure in the world wouldn’t be successful if those implementing the SOP didn’t have the right mindset.  That’s not to say though, that the SOP isn’t equally important.  I have found that many small business owners don’t see the importance of SOPs because they think that they are only for large companies.  However, even if you’re a solopreneur, SOPs are very important to the success of your business.

A Standard Operating Procedure is nothing more than a routine or the “normal way” of doing things.  You may not have them in writing, but I assure you, there are many SOPs in your company.  They may not be effective or efficient SOPs, but they are SOPs none the less.

If you work on your own, chances are that your SOPs are not in writing and that they have possibly developed organically through trial and error.  Further, it may not occur to you to review and evaluate “how” you’re doing things unless business gets so busy that your systems and procedures break down. 

New Business Procedures Don’t Matter a Bit if the Mindset Doesn’t Change

In many businesses, when a problem affecting business operations is uncovered, the first place that owner and managers look to change is the process of procedure at the source of the issue.  So, they spend time and resources re-evaluating and designing a new process – often including the hiring of a consultant – and implement the shiny, new procedure. 

Right away they see improvements and the problem appears to be solved.  But, a few weeks later, it rears its ugly head again.  What happened??  The one part of fixing the problem that was likely not addressed was the mindset of the people behind the problem.

In our last article, we discussed how many businesses are losing customers because they make it difficult to communicate with the company by not widely publishing phone numbers and email addresses.  However, if they immediately jumped on their site and put the contact information in big, bold numbers, that may not have solved the problem.  If you recall, the second part of the problem was the receptionists not being overly welcoming or knowledgeable.

Is Nike Right? Should You, “Just Do It”?

We last talked about taking action on a project to improve your business when you’re either overwhelmed or afraid to fail.  The message I left you with probably sounded like I was telling you to, “just suck it up and do it!”  Well, in a way I was, but it’s not that simple.  Don’t get me wrong, taking action is a great motivator and could definitely be moving you in the right direction.  However, blind action – without a plan – could result in you being further away from your goal.  So, what should you do?

First, don’t let yourself freeze up again!  It’s taken some energy to get you defrosted, ready and motivated to take action – so hold on to it!  Then, funnel it into the following process:

Step 1:  What do you want to do?  Be very clear and definitive about what it is that you want to do.  Do you want to implement a new software system?  Do you need to make a change in your staff? 

Step 2:  Why do you want to do it?  Be truthful here!  The reason could be big or small; it could be petty or deep.  It doesn’t matter.  All that matters is that you understand and own the reason – even if it’s as simple as a personality conflict.

Step 3:  Write out an action plan.  Make it as detailed as possible and it will be easier to follow.

Step 4:  Feel the fear or overwhelm.  There’s a reason you’ve been procrastinating taking action and it likely has something to do with fear or overwhelm.  Allow yourself to feel it, acknowledge it, and then you’ll be able to move on.

Step 5:  Why are you afraid or overwhelmed?  This “why” is very important because it’s likely keeping you from taking action on other projects.  Is it a fear of failure, afraid you’re not capable of doing it, or don’t have the knowledge or skill to get it done?  The why could be internal or external.

Step 6:  Do it anyway!  Now that you understand why you’ve been procrastinating, you may start to have second thoughts.  Don’t listen to them!  Take the first step of your action plan within 24 hours.

Step 7: Celebrate!  No matter the outcome of the project, celebrate that you took action and took a risk.  This is especially true of long term plans because it will be a while before you know the outcome. 

So, Nike’s right.  You should “Just Do It!”  Just do it in steps and you’ll definitely be moving in the right direction.

How to Choose a Business Function to Outsource – eeny, meeny, miny, moe?

No!  Outsourcing is far from a willy-nilly decision.  Choose the wrong business function to outsource and it could bring down your whole company.  Many small business owners go into business for themselves because they want to control everything.  Outsourcing involves giving up control over a piece of the pie.  However, that piece of pie still has to operate seamlessly with the rest of the pie even though it’s no longer in the tin.  And, your customers should always see a pie that is completely uncut and intact.

 

Devising a Simple Training Evaluation System

Contrary to what you may think, evaluation of your training programs does not start after the training program is over – it starts before.  The training plan and the training evaluation have a chicken and egg relationship.  If you are doing things correctly, the training plan is built upon the results of the training evaluation.  But, if you haven’t done a training plan, then you can still do a training evaluation on the training programs you select in preparation to create a training plan for the following year.

Deciding how you will evaluate the training should be a key part of planning training activities.  Further, the evaluation should occur in three distinct stages.

Before the training

• Set objectives for the business and the trainees (including financial objectives).
• Decide how you will measure the objectives.
• Analyze the situation before training using these same measures so that you have a baseline to measure improvement (or lack thereof).
• Identify the specific improvements you want to occur.
• Identify why you have chosen this particular training method (e.g. competitive price, trainee's preferred learning style, flexibility of delivery).
• Evaluate a range of training methods and choose the most suitable.

During the training
Ask the trainee to reflect on their understanding of the material and enthusiasm throughout the actual training process. A well-designed training program will ask participants to do this as part of the learning process (e.g. through interactive sessions and practical application, with regular recaps or by completing feedback forms at the end of each session).

After the training

• Measure your objectives at pre-set time intervals.
• Get detailed feedback from the trainee.
• Re-test knowledge and skills and compare with pre-training results.
• Review the performance of the chosen training method.
• Observe the trainee's new knowledge and skills in context.
• Identify any remaining training gaps, and include them in future plans.
• Review your return on investment.
• Give feedback to your training provider - this may help them improve their service.

I’m going to be honest.  Designing an evaluation method for training programs that truly measures their effectiveness is not an easy task – particularly if you are not an educated and experienced trainer yourself.  Therefore, if your small business is dependent on a sizable staff to operate, it will be worthwhile to hire a consultant to develop the system for you.  Although spending money on training without knowing if the expected results are achieved is not quite throwing the money away – it is getting close because you simply do not know and you cannot leverage the training for future training plans.

Treating Your Suppliers like Vendors to be Easily Replaced Could be the Death of Your Business

 
Whether your suppliers provide food for a restaurant, raw industrial materials for a manufacturer or marketing materials for a professional service, the success of your business depends on having a good, trusting relationship with your suppliers.  When your suppliers’ products end up in the hands of your clients, your clients see them as yours; they have no knowledge of the originating company.  Therefore, if the products are substandard – or even bad – then that reflects directly on you.

When you build strong relationships with your suppliers, they will be more willing and open to helping you, saving you money, and giving you the best products they have.  If your suppliers see you only as a revenue stream or, worse yet, as a problem customer, then you never know what you’re going to get.  Who hasn’t had a bad day, gone into a restaurant, been ruder to their wait staff than they would under normal circumstances and then wondered if they spit in their food?  Luckily – in this situation – you don’t have to worry about passing that food onto your customer as representative of you not knowing if it’s the best quality!