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.

Gordon Ramsay Brings Family to Work

Just over a year ago, I kicked off this blog with an article titled, Are you the next Gordon Ramsay? Would you want to be?  Essentially, we talked about work-life balance and whether or not the balance that comes with celebrity would be the type of balance you would want in your life. 

I addressed some common misconceptions and shared that balance is a moving target, that it’s not 50%-50%, and that what is balance for one person is not balanced for another.  If time at home with family and privacy are important to you, then celebrity likely isn’t your ideal work-life balance.

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 You Ready for the Economic Turnaround?

Regardless of the ups and downs of the financial markets, economic indicators have clearly been pointing to the fact that we’re on the way out of the recession.  Light is now visible at the end of the tunnel!  Before we move too close to the recovery, have you taken advantage of the opportunities of the downturn?

Although many have been, not all businesses have been suffering during this recession; sales may have been down, but they haven’t been in dire straits.  In fact, they’ve been positioned to grow and capture opportunities while their competitors have been going out of business!  If you’re a smart business owner, you’re taking steps now so that when the next recession hits – and it will – you’ll find yourself in a much better position than you are in now.

The average small business owner acts very much like the average investor – they buy high and sell low.  When the economy is booming and revenue is flowing, they invest in growing the business and buying new assets.  The problem is that they’re paying top dollar for those new assets – buying high.  Because they invested all of their excess resources on expensive assets instead of saving it to buy when the economy is down, they often have to liquidate when the next recession hits – selling low.

The smart business owner is looking around and taking advantage of future growth opportunities now!  If you’ve been telling yourself that you’ll expand and invest in your business only when the economy turns around, you’ll have missed out on some great opportunities.  

You may not be able to do everything now, but chances are there are opportunities within your reach that will save you money and increase potential for future revenue.  If you want to truly position yourself to optimize the growth potential of your business when the market is good, you need to find a way to make some investment now.  

It may require sacrifice, but it will fundamentally change the future of your business for the positive.  Now is the time that it will be most painful.  However, when the market turns around, your work isn’t complete.  Instead of spending, you’ll need to take those excess proceeds and put them away so that when the next recession hits, you’ll be strong and really positioned for huge growth.

Smart business owners who are positioned correctly take advantage of the opportunities present in every part of the economic cycle!  Yes, there is a “good” side to a recession.  What can you do now to move your business closer to benefiting from the roller coaster ride and not suffering because of it?

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. 

Are You Putting Yourself Out Of Business?

The battle of the High Street vs. Big Box Sores continues…and Big Box is winning. The scary part is that small businesses are helping them win!  The old mantra has been that small businesses will still survive because they give personalized customer service, offer unique products, and build strong relationships that will justify their higher prices.  But that’s not what’s happening today.  The customer service that you find in the small businesses is often as atrocious as that in the big box stores and chain restaurants. 

Small business employees have developed the same mindset as big box and chain employees – all right is good enough.  Additionally, many big boxes are trying to be more like the stereotypical main street small business and providing special customer services.  So why should customers pay more for the same or worse service?

Here are some mistakes that I often see that are killing small businesses

They Disregard Their Customers – Many small businesses are stretched so tight that owners and employees alike are running around like chickens with their heads cut off.  They are so focused on doing, doing, and doing, all of the tasks necessary to run the business that the customers almost become a nuisance and just get in the way.

They Treat Their Employees Poorly – By poorly, I mean worse than their worst customers!  But, then they turn around and are super responsive and caring towards their customers.  The problem is that the customers see this double standard and recognize that the owners likely aren’t being genuine with them.  Further, they will believe that how they treat their employees is probably closer to their true nature.

Cleanliness Is An Issue – Whether your business is a restaurant, office or storefront, it is imperative that your place of business is clean and tidy.  If you can’t maintain it yourself, then hire a cleaning company!  When customers see dirt, dust and grime they assume that is a reflection of your work and how much you care.  They expect to find big boxes and chain restaurants to be dirty because they’re corporations. You’re a small business owner – you’re expected to be passionate about your business and care about every tiny detail!Not sure if you’re endangering your business? 

I recommend taking a day trip and evaluating several different small businesses and big boxes/chain restaurants.  End the day by coming back to your business with these new fresh eyes and look around.  How do you measure up?  Are you happy with what you see?  What can your business be doing better?

Feel free to share your discoveries!

Is It Too Difficult for People to Do Business With You?

I just had a couple of very frustrating experiences trying to refer significant business to two different companies. It made me wonder if they realised how difficult it was for someone to do business with them and how many clients they are likely losing.  Have you ever reviewed the experience a new person has when trying to connect with your company?

First, it is important for you to know that I had no existing relationship with these companies; however, they are well-established and well-known.  I looked up the company websites to get contact information and didn’t see any phone numbers or email addresses listed (they were impressive, professionally designed sites).  I was simply directed to one of those “contact us” forms that make you wonder if anything will happen if you fill it out.

After a lot of digging around, I finally succeeded in finding phone numbers to share this great opportunity.  The experience I had with the first company was like the Spanish Inquisition!  I was asked 20 questions by a receptionist to prove that I’m worthy of their time. 

Eventually, I spoke to a coordinator who was able to help, but I came away with a lukewarm feeling and little desire to want to work with them.  When I called the second company, I was met with a receptionist who couldn’t grasp what I was requesting and got nowhere!

I see this all too often.  Companies are so afraid of being inundated with sales calls, that they hide their contact information.  Here’s the problem, if the sales people can’t figure out how to contact you, then clients definitely won’t be able to figure out how to contact you! 

Even worse, the sales people will still find a way to get the contact information because they are motivated to do so.  The clients will get frustrated and move on to one of your competitors.

When people do succeed in making contact with your company, how are they being received? Is the person answering the phone using a warm and inviting tone?  Are they knowledgeable?  Do they make the caller feel welcome and valued?

If you want your company to be successful, you need to make it as easy as possible for people to do business with you.  Particularly in this economy!  Additionally, you want to make the experience people have when interacting with your company (virtually on your website and in real life) as enjoyable as possible.

Not sure what type of experience people are having?  Ask some business colleagues to ‘secret shop’ your company as a potential client and share their experience with you.

Employees Don’t Belong Under the Bus

We last talked about how customers are not always right.  A bad habit that many business owners and managers have when they know the customer is wrong is to blame a front-line or lower level employee for the mistake to make the customer feel like they’ve gotten their way.  Wham! The employee was just thrown under the bus.

Throwing employees under the bus is one of the quickest ways to ruin your business – and it will definitely prevent you from having a happy business! 

First, it immediately betrays and damages the trust the employee has in you.  Further, the employee will not be motivated to do their best work for you. 

Second, if it happens more than once, you’ll have a full-blown employee morale problem because everyone will be waiting and expecting it to happen to them. 

Lastly, the bad employee morale will quickly disintegrate into employee retention and turnover problems.  If you’re not able to hold onto quality employees, then your business will never be successful.

So, what should you do instead?

First, clearly communicate and train all of your employees on business standards and expectations so that they can clearly identify when the business is at fault and when the customer is unreasonable.

Second, invest in training your staff in conflict resolution.  Proper training will help prevent your employees from taking customer complaints personally.  Additionally, it will enable them in deflating the situation so that it does not interfere with the business operation or generate negative impressions.

Finally – and most importantly – when an employee makes a judgment call that is within the scope of their authority and within the standards and expectations that have been clearly communicated, then back them up!  Support the decisions your employees make. 

You could still find yourself in the role of mediator between the customer and your employee.  In this situation, you have to find a solution that hopefully pleases the customer but that doesn’t undercut your employee.  If possible, discuss the situation with the employee who made the decision and come to an agreement as to the best solution before presenting it to the customer.  This way, if you have to move backwards from the decision the employee made, then they are part of the decision to do so.

When you support your employees’ decisions, you demonstrate how valuable they are to you.  Further, you empower them to take greater ownership in the business operation and success – which can only help your business grow!