How To Improve Your Business
Just as in life, improvements in your business don’t occur without a focus on achieving the desired outcome. If you just wish or hope for something to happen, it probably will not. Improvement comes through creating a plan to get where you want to go. Being able to visualize the goal is the key to achieving it and communicating it to your team.
How do you visualize your goal? It can be as simple as writing down a number, but the challenge is understanding what number to visualize. Here is what I mean; many business owners say they want a certain level of sales in 2015. So they create a goal based on that number and then record each day’s sales to see if they are achieving the level of sales they hope to achieve. Tracking sales each day is fine, but it probably won’t do anything to help you improve sales. Instead, we should be tracking the things that create improvements in sales, because these are the things which actually influence sales growth.
Improvement in your business comes through creating a plan to get where you want to go. Being able to visualize the goal is the key to achieving it and communicating it to your team.
What things measure our ability to grow sales? First would be the average price of an individual sale. No other single factor impacts sales like average ticket. Even a very small increase in your average sale can make a dramatic difference in total sales over the year. For example, if your average sales were $200 in 2014 and you had 700 sales, you could grow sales by almost $18,000 by just increasing your average sale $25! Tracking sales opportunities and the success rate on those opportunities will also help you grow sales. If you closed 85% of your opportunities for sales in 2014 and had 700 sales that means you had the potential to get 124 more sales. If you increased your average ticket to $225 and closed 95% of the sales, you would see income rise by more than $35,000 without adding any new customers!
So, if you want to grow sales, tracking daily sales results won’t help you get the results you want. Instead, track the things that make sales grow and then you will sales the results you want. But why track these things? Won’t your average sale increase without tracking results? Won’t you close more sales without recording them? The answer is NO. Things only change when you make change a priority. Without looking at your results each and every day, you will not improve. Daily scorekeeping creates an awareness that leads to improvement and that improvement is measurable because you have recorded it every day. When you get your team involved in recording their own results and then you merge those results into a total team effort, you change the culture of what is important. Without daily measurement, you cannot make these changes.
What other things can be improved by measuring performance? Another is turnaround of completed projects. If your company fails to return projects to clients in a timely manner, you are going to lose some customers. How do you improve this? Track it every day. Make sure that customers get their projects on the due date by recording how many do not. Then set a goal to improve this. Failure to meet the goal will lead you to finding out why you are disappointing customers. Once you learn what is keeping you from getting projects done on time, you can correct those issues. How about customer problems? Do you have several customers disappointed in the design or craftsmanship of their projects? If you don’t know exactly how many each month, you really don’t know if you need to make changes to correct the problems.
Obviously, the more you know the more you can decide what needs improvement, but you do not need to begin by tracking everything. Start with the most important need your company has. Is it getting more sales the highest priority? Is improving customer satisfaction critical? What will mean the most to the success of your company? Start there and add other less vital issues as you progress. The key to making this work is to choose carefully what needs to be improved, set realistic goals, record results daily and post those results where everyone can see them. Try offering individual and team rewards as ways to celebrate reaching your goals and discuss your progress with the team each month. Soon, everyone will be conditioned to watching what is happening and participating in improving their score. Once that occurs, you have successfully integrated positive change into the culture of your company. Have fun with this and watch performance improve!