THE ENTRECODE BLOG
Entrecode: The easiest way to make money is to stop losing it
In using entrecode® with businesses there are a number of common challenges they face which when addressed can really boost their performance.
One area is to work ON the business as well as IN it. The reason people do not work on the business is that they are too busy working in the business dealing with the day to day issues. Very often they find it hard delegate to free them up to work on the business. So a key skill they need to learn is to ‘let go to grow’. I found they can be helped by providing entrecode® processes and the facilitation of a small internal team to work on the business.
A quick win is to help them to recognise the easiest way to make money is to stop losing it. Many are inadvertently throwing money out of the window. The main reason is that they do not have the right level of analysis which helps them to identify where they are really making and losing money. This process also improves cash flow and can provide internal funds for growth as opposed to needing to go to the bank with a begging bowl.
Liam Burke of P Squared Limited who provides private radio facilities to major clients
Liam analysed his business in depth as part of a strategic review and identified where he was throwing money out of the window. As a result his overall revenue increased by 10.4%, Net profit increase 35%, the company is on track to reduce travel expenses by 30% by reducing the number of ‘on site’ sales visits and replacing them with remote demonstrations using online meeting technology. He has also reviewed and rationalised his product range to focus on profit centres.
Mark Eggleston of W J Components Ltd who provides timber treatment
Mark stopped losing money when he clearly identified which products made or lost him money. He enjoyed making wooden furniture for the caravan industry and took great pride in the quality of his work. A detailed in depth cost analysis revealed he lost money on every sale. During the analysis Mark also identified that his new product DeckWright – anti slip decking for boats – was a growth market and was highly profitable. He sold his machinery from the caravan furniture business and invested the money into new DeckWright machinery. As a direct result his profits will quadruple by 2015.
Business Improvement – A Recipe for Success
1. Re-do your strategy, particularly mission, vision and values. These are not just fancy words, they are what provide focus and direction and hold the business together.
2. Identify the 6 key actions you need to take in order to deliver your strategy.
3. Appoint the right people as champions to work on the business on the 6 key actions.
4. Manage the process to ensure the actions are taken.
5. Let go to grow – focus on what you are good at and enjoy. Get others to cover your weaknesses.
6. If you do all of the above well, treat yourself and enjoy your success.
Two values that help create great businesses
I have had the good fortune to work with some great businesses over 30 years as a consultant. What, if anything, do they have in common?
Well one thing is clear; the very best have two common values as part of their culture. Firstly, treating employees, and in fact all stakeholders, with dignity and respect. This is from the recruitment process through to how they are managed and even when they need to let people go. They do it with dignity and respect which creates a very positive culture of commitment within.
The second value is delighting customers, going that extra mile to ensure all customers are delighted with the service they receive. This leads to high levels of repeat business, new business from referrals from delighted customers and a lowering of sensitivity to price. In my view some people mistakenly believe this is the soft stuff but this is not the case. Great values turns into the hard stuff – profit!
Common sense? I would sooner name it rare sense because I don’t come across it that often!
Insights into Growing a Business Successfully
I have been working with 6 businesses in Humberside who are wanting to achieve significant growth. What did we learn from the process?
Firstly, few had a clear strategy for the next 3 years i.e. mission, vision, values, market choices and product focus. Secondly, none had recently completed a customer perception survey and when they did it provided real insights into what they needed to do to build competitive advantage in order to grow profitably.
Finally, a real big issue is that too often businesses are highly dependant on the entrepreneurial owner. The owner becomes so busy working in the business, often trying to do things they are not good at, which means they have little time to stand back and work on the business to help it to grow. The principle here is that they needed to let go to grow.
A key priority for most was to get a team of people around them to free them up to grow the business. The key principle is same values, complimentary skills.
Having sorted these issues out the businesses are now starting to flourish and grow.
Free toolkits are available to help others undertake this work. For more information see www.davidhalluk.com and www.entrecode.co.uk
Entrecode – Unlocking the Entrepreneurial DNA
My new book Entrecode – Unlocking the Entrepreneurial DNA is to be published shortly. The book is the result of 25 years research into how entrepreneurs really do start, grow and revitalise businesses.
Here is a review of the book by The Earl of Errol, Chairman, All-Party Parliamentary Group for Entrepreneurship:
“David Hall’s book unlocks the DNA of entrepreneurship. He distils over 20 years of know-how and shares with us a new understanding of entrepreneurs. From the vision and creativity they use to spot the opportunity, to the persistence and determination needed to overcome the inevitable obstacles. Using extensive research and unique analysis, Entrecode identifies 21 key factors of entrepreneurship. With relevant and engaging stories from real-life entrepreneurs, this is an insightful and practical guide for everyone who aims to become an entrepreneur. It takes techniques from high performing athletes and applies them to setting up and growing a successful business, with inspiring results. Entrecode is an excellent tool to help create a new generation of entrepreneurs. As well as revealing the secrets of educating for entrepreneurship, it will add value to both the entrepreneur and the wider economy. This isn’t just another book about enterprise, it’s a radical unveiling of the key traits of business success and how anyone can use them.”
High Performing Teams
I have recently been researching teams for an upcoming Harvard Business Review article and discovered some amazing information.
In the USA hospitals publish their performance figures for various procedures. In some hospitals the success rates vary dramatically from others on exactly the same procedure. The question was, why? It is funding, better consultants, teaching hospitals, facilities… None of these explained the differences.
One day they discovered the answer, almost by accident. In the high performing teams the nurses, doctors, health care people and admin, all worked as a team on the patient agenda – that was it. Teamwork making the difference between life and death – literally!
In another study where a number of people were working together on complex questions, when they introduced themselves to each other and spent a bit of time talking together the results improved by 47%!
Get back to basics… for Christmas
In these difficult economic times it is important for businesses to stay grounded, focused and on the front foot.
As my Christmas present to you I will share two processes that I have introduced into my main clients that have added real value:
1. Alignment
Make sure the key strategic issues are translated into priority actions for your senior people. Then ensure your people focus their time and energy on them. Ask them “take out your diary, what have you been doing this week”. A target of 50% of time as a minimum is a good standard. Most businesses find that it is less than 10% when they start off. Chances of success?
2. Attunement
Make sure your key people model and champion the core values of your business. For example, if it’s ‘delighting customers’ or ‘treating people with respect’ check whether they are doing it. ‘Inspect, don’t expect’ is a good tip in these hard times.
If you get alignment and attunement sorted you are doing well and almost certainly better than your competitors.
Merry Christmas and stay focused.
The easiest way to make money is to stop losing it…
One of the major challenges facing a number of my clients and most businesses right now is responding to the economic situation in the appropriate manner.
After several years of growth and largess, sales are diving but many businesses have been caught like rabbits in car headlights. How to respond? What to do? One thing is clear, they need to continue with a positive cash flow and preferably profits are paramount. If sales can’t go up then costs must come down and in many cases drastically. To enable businesses to make the right decisions they need accurate costings allocated to products or service streams.
Where are we making or losing money? What is a must and what is a luxury we can no longer afford? Some managers are good at growth, others excel when the going gets tough. The problem is that they are usually not the same people…
So get the facts, identify your winners and cut out losers. Do it now before it’s too late! If you’re waiting for government policies, better economic conditions or a lottery win you are deluded.
JFDI!
Helping people to find and release the passion and drive to really succeed
In successful people one common factor is personal passion and drive but where does it come from? How can we help people to unleash it themselves? Our research with successful entrepreneurs provides some clues:
- Moving away from failure at school. Many entrepreneurs want to prove themselves to themselves and others having left school with no qualifications.
- Discovering strengths through processes like proper career guidance. What skills have I got that I was unaware of but can exploit?
- Seeing the future and not liking it. My father told me he hated work when he retired and I was determined that would not be me.
- Finding a mentor or friend who really believes in you and gives you the confidence to become the best you can be.
- Finding a passion for a cause or something you want to put right which you pursue relentlessly.
- Breaking the effect of a peer group with low expectations. All my friends at school were going to work on a building site and I was until I discovered on an Outward Bound programme there were people with much bigger aspirations and I could be one of them!
So there it is, the challenge for parents and educators. How can you help people become the best they can be and to live their lives to the full?
