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Failing to Plan is Planning to Fail!

While strategic planning is often thought of as something reserved solely for big businesses, it is equally applicable — and even more critical — for small businesses. Unlike bigger companies that can afford to make a strategic error, a mistake at a smaller company can put it right out of business.

For this reason, failing to plan is literally planning to fail. By going through the strategic planning process, entrepreneurs define, refine and fully communicate the product or service for themselves. They learn to match the strengths of their business to available opportunities, enabling them to determine how their company is going to generate revenues.

Before you embark on the strategic planning path, however, there are a number of “strategic planning traps” to watch out for. Identifying and managing these challenges upfront is critical in creating plans that position your company for long-term growth.

Not Doing Strategic Planning

The biggest mistake entrepreneurs make is not doing strategic planning at all. Rather than looking at the long-range, big-picture, they focus on operational issues and day-to-day survival. They end up working harder not smarter. Having a clear strategic direction — where you want the business to be in five years, 12 months and 90 days — will enable you to allocate your time and financial resources more effectively and efficiently. The right competitive strategy can make up for many tactical errors, but no amount of effort can compensate for the wrong strategy.

Lack of Commitment to a Market or Strategy

Entrepreneurs are often unwilling to commit fully to a market or strategy. Start-up entrepreneurs especially tend to measure their success by the volume of activity. As a result, they have difficulty turning away opportunities that come their way and end up taking any jobs that come along. Thinking strategically means making choices both about what you want to be and don’t want to be. A company needs discipline to differentiate itself and create a competitive niche. The best approach: figure out the spot in the market where you can make the most money and then go for 80% of that niche.

Being Overly Optimistic

By their very nature, entrepreneurs have to be optimistic — otherwise, they would probably never start a business given the high rate of failure. But, putting on blinkers to potential pitfalls or gaps in your company’s strategy will not make them disappear. Being more realistic about your market, your company’s capabilities and your competition can only increase your chances of success. It is important to realise that there is a difference between negative thinking and critical thinking. Critical thinking is purposeful, reasoned and directed at increasing the probability of a desirable outcome. Critical thinking takes an unbiased view of the situation. This means looking at both the pros and cons. People that are overly optimistic only see the pros and naysayers only see the cons. Critical thinking attempts to balance the two to arrive at a more reasoned decision So, the strategic planning process should seek to uncover possible risks and challenges, not simply highlight the benefits. Taking a serious look at why a strategy might not work makes it possible for your company to take proactive, preventive action to avoid anticipated stumbling blocks. On the other hand, being overly optimistic about the wrong strategy can only make your venture fail — faster and harder. So, the key is to be realistic in developing the strategy and to be optimistic in implementing it.

Not Making the Strategy Concrete

It’s not enough to come up with the ideas in your strategic planning sessions and then hope they will be put into place. The plan needs to be put in writing. The difference between having a plan and having a written plan is significant Once the plan is written down, you need to make sure it does not gather dust on the bottom of the bookcase. People do not need to refer to the plan daily, but it should serve as an umbrella to guide day-to-day behaviour. The only way it can do that is if it is translated into specific, measurable goals, objectives, and action plans. Once this is done, you need to communicate the plan fully to all employees and make sure they understand it and what is expected of them in reaching the goals. Lastly, to make sure the plan remains realistic and effective, it must be continually monitored, evaluated and updated. Changes in the business landscape can alter any business plan. Staying on top of what’s going on internally and externally will help make sure you stay on the right course.

Not Involving Others in the Planning Process

Too often, entrepreneurs think they know everything they need to know about the business — so why involve others in the planning process. Entrepreneurs also believe that because they are taking the risk, not the employee, why should the employee be involved in deciding what direction the company should take. However, involving others in the process makes the plan more strategic and better poised for success. People have a variety of experiences and look at things in many different ways. Bringing multiple perspectives to the table is vital in uncovering potential challenges and pitfalls In addition, by involving others in the process you gain their support. Employees like — and need — to feel that they can make a difference. Soliciting their input and ideas will make them a valuable part in creating the plan and implementing it. They will be energized to put forth their best effort to reach the stated goals and objectives.

Putting it all Together

Starting a new business is hard enough. In fact, 80% of businesses fail within the first five years. But, you need not fall into this category. Taking a strategic, but not negative, look at your business will enable you to develop a plan that will position you for future growth — and make you a survivor.

You can’t measure what you don’t manage.

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Eight Strategies To Maximise Your Business Profits Fast

In today’s business environment too often business owners are constantly chasing new leaders, continually investing more and more into marketing, and forgetting about simple strategies that can help them effectively and quickly grow their revenues and profits.

You see, I remember hearing this saying years ago that, “A customer is a customer is a customer.” And once you acquire a customer and you start working with them, it’s essential that you nurture the relationship, and you help that customer buy from you again, and again.

Too often your clients or customers don’t really understand the depth of how you can help them. They came to you with an initial problem which you solved, but the conversation never went on from there. Now I’m not saying you should just sell anything and everything to them, you still have to fulfill a need that they have, or solve a problem that they have. But more and more we need to be communicating effectively and consistently with our clients and customers in order to achieve increased revenue and profits without having to work any harder.

So here are eight simple strategies that you can implement quickly that are going to help you increase your revenues and profits

Number one is follow up on all leads.

This is too easily pushed to the side. You see, we work hard, we invest money into generating inquiries and leads, but we don’t hunt, we don’t hustle to get them to cross the line. Or we might send a proposal or a quotation, follow up once or twice, and we just let it be. See you need to followup relentlessly, followup, followup, followup, whether it’s an email, a phone call, an SMS. Followup is critical. If you can improve your conversion rate quickly, simply and by implementing a simple follow-up system and it’s a system, not just random followup, you’ll see an increase in your bottom line.

Number two, communicate all of your products or services to your clients regularly.

If you’re not sending a newsletter at least once a month educating your clients and showing other products or services that you offer, then you’re leaving money on the table. A simple frequent communication schedule where you add value and also share other products or services that you offer is critically important and will see increased sales quickly.

Number three, have a price increase.

When was the last time you had a price increase? Many businesses have had the same pricing for years, and the only person that has a problem with increasing the prices is you. Most organizations that I work with, when we recommend a five to 10 percent increase in price, they’ll wrestle with it, but when they implement it, they don’t lose a single customer. And how about this, what about the compounding effect that this will have when ongoing you’re now charging higher prices for your current services, and your delivery costs haven’t increased one cent?

Number four, allow payment terms.

If you’re selling higher ticket items, you may want to consider things like After-Pay or Zip-Pay because what that will do is that will help to increase the average spend that your customer has. Now yes there is a small cost to this, but if we can negate that by the increase in average spend, then providing customers with a payment plan option may be a way to increase their spend with you, and hence increase your revenue and profitability.

Number five, loyalty programs.

I’m surprised that every business doesn’t have a loyalty program. These days you go to most well known retail stores, and they’ll offer you to sign up to their loyalty program. Now you don’t want just to become a ‘me too’ loyalty program, you want to make sure that you create a loyalty program that’s meaningful to you and your customers. It may offer incentives that they can’t get in the free market. You may do VIP nights or days or again, you may communicate differently through a different newsletter. You may have different status levels as they do with the airline programs where you go from a bronze to a silver to a gold to a platinum, based on spend and other activities.  But a good loyalty program will number one, help keep your customers longer. And number two, have them spending more with you.

Number six, create an upsell or a more significant option.

Mcdonalds has done this for years, you know, would you like to upsize that? Would you want to go from the regular size to the large size? Every organization can find something where they can increase the sale. It might be the number of garments you’re purchasing; it could be a service where you go from the basic service to adding additional features and benefits. Come up with an option that gives your customers the opportunity to go up to the next level.

Number seven, cross-sell.

This is the, “Would you like fries with that?” And again, I use Mcdonalds as an example because they’re the best at it. Whoever thought of having fries with burgers? I mean it was just years and years ago it wasn’t even thought of. But now it’s just, “Would you like fries with that?” And if you think about your products and services, there’s always an add-on. There’s always something that they need that goes with your services. So you want to think of some examples. If you’re in retail it could be an accessory. Online shopping carts do this really well where they say, “People who bought this product also bought this, this, and this.” You want to consider the cross-sell because again, the customer already knows, likes, and trusts you. So you’ve just got to put something of value in front of them.

And number eight is you need to seed the need.

This is more relevant to service-based businesses but can be used for product-based companies as well. If you’re an appointment-based business, you need to at the time you’re seeing them, and they’re paying you money, book the next appointment or book the following 10 appointments, whatever frequency you’re going to do this. If you’re dependent on each time the person having to go away, remember to call, you’re leaving money on the table. You need to make sure those appointments are booked then and there. Another thing is if you’re selling products, think about the usage time and then time the communication … We worked with a supplement company and they knew that the average reorder time was around about four weeks, and that was if you were buying supplements, that was the amount in the packet. So what we did is we implemented at three weeks and four days an SMS that would go out and incentivize the customer the repurchase the same order, but it would also then provide other opportunities, whether upsells or cross-sells, in that same communication. So seeding the need is critically important.

So, in conclusion, you want to think about:

  • How can we get more from what we’ve got?
  • The clients and customers that we’re serving, how can we help them achieve faster, achieve more, buy more of our products and services?  

This will be critical to you growing a sustainable business because otherwise, you’re just going to be chasing more leads after more leads after more leads.

You can’t measure what you don’t manage.

Get clear on what your score is so you can win in your business.

Download our FREE Cash Flow Planning Tool