By Melissa Willis, coaching and consulting
Smart business owners focus on what they CAN control rather than worrying about what they CAN’T control. No amount of pacing and handwringing will change the current economy or the pace of inflation. While it might be tempting to keep lamenting about what’s not working, business owners whose doors stay open will be putting on blinders and tracking ways to win.
Here are five ways owners can take control of key areas in their businesses without spending any additional money on staffing, marketing or advertising.
1.Take Control of Pricing and Stop Discounting
Everywhere owners turn, prices are going up. The cost of supplies rises almost daily.
When small businesses are talking about raising prices, it invokes the type of fear felt as a child when there was the thought of monsters under the bed.
If a business hasn’t raised its prices in two or more years, it is past time. More importantly, there should never be an apology with a price increase. No grocery store on the planet puts a little note next to the butter saying, “Sorry about that extra 50 cents, we had no choice.” Buyers noticed it, and they put it in the basket anyway.
Now, about that discounting that business owners think “gets people in the door.” Stop doing that. Instead of a discount, what can owners offer that has a high perceived value and goes with the purchase? Think cosmetic companies with their crowd-pleasing “gift with purchase” or a caterer offering a free dessert with the purchase of a family meal pack. Low cost, high value. Scrap those discounts and add value. Everyone likes “free.”
2.Expense Clarity
Tough markets don’t create inefficiencies; they shine an interrogation light on them.
This is the time to put the company’s profits and losses (P&L) statement under a microscope. Where can owners make some changes? Here are areas to consider: employee redundancy, cost of supplies, shop insurance and shop other services like internet, cell phone and other regular expenses. Negotiate with company vendors. Ask if they would be willing to offer better pricing if the company signs a year-long contract instead of a month-to-month agreement. This will take a bit of time, but it could add up to big savings.
One final note about expenses: many business owners use Amazon to purchase supplies and also veer off into other areas when they need personal items, too. “We need printer paper, and I also need paper towels for the house.” Keep personal and professional purchases separate by using different cards to pay for them.
3.There’s More Business in Existing Customer Base
If an owner has a business with 1,000 customers and adds on a new product or service that costs $50, with only half of its customers taking advantage of this new offer, the company added $25,000 in revenue. Who better to make an offer to than the folks who already know, like and trust the owner and company?
The point here is that many businesses offer multiple services, but the majority of their customers only use one or two of them. How many times does the company “make the sale” and stop asking if the customer needs or wants anything else? There are 34% of customers who will spend more money at checkout time – if asked. Most business owners and sales professionals don’t ask.
Take a good, long look at the company’s current customers or clients. What else can the company offer them to be of service and give more value, and at the same time, make more money? The same fear that keeps business owners from raising prices also keeps business owners and sales professionals from asking, “Would you like fries with that?” Companies may not be offering fries, but they get the idea. Upsell and cross-sell – companies will thank themselves later.
4.Follow-Up and Conversion are Grossly Underutilized
How many businesses go to the trouble of preparing a quote or a proposal for a prospect and then never follow up? Over 50% never follow up at all. The fortune is in the follow-up. That is an uncomfortable truth. Money is left on the proverbial table more often than it is picked up. Without a system in place for follow-ups, they likely will never happen. Create a system that makes all those proposals turn into closed deals.
Studies show that it takes eight to 12 contacts to even have a meaningful conversation with a prospect, much less close a sale. It might be surprising to learn how often a sales professional states, “I tried to call twice and then gave up.” Companies never know what is going on with prospects behind the scenes. There could be someone who really needs the service, and the sales professional gave up. Don’t give up.
5.Know the Business Numbers
Business owners often leave the numbers to the bookkeeper and the accountant. Business owners must know their numbers. How can an owner track growth or address issues without knowing the numbers?
While it is said by many accountants, “Let us worry about your numbers so you can run your business.” This often leaves business owners in the dark, and problems become unwanted surprises.
Consider monthly meetings with the bookkeeper and/or the accountant. The numbers are a clear indicator of how the business is running, and the owner should be up to speed in all aspects of the business. An unexpected benefit of knowing the numbers is the confidence that comes with it. A business owner will feel more in control of the business when there is financial visibility.
The bottom line is that focusing on what owners can control vs. worrying about what they can’t will put the business on a path to success and prosperity. Making small changes every day will lead to big improvements in every business and will diminish the overcast economic conditions.
Melissa Willis is a coach and consultant who has helped owners and sales professionals over her career. Willis can shine a light on the areas that need the most work while acknowledging what has been successful. Specializing in profit acceleration and communication styles, Willis helps businesses make more money and keep more of it.
More information: www.melissawilliscoaching.com