The Simplest Way To Make Your Business Work
So you feel like your business rests entirely on you? Are you stuck in a business that consumes you, yet you struggle to make it predictably profitable, let alone grow it? This is for you.
If you are the owner of a professional service business and you’re feeling maxed out and stuck, or you just want to find a better, faster, easier way to double your revenues and profits, then I wrote this article for you.
Let me start by sharing a conversation I had with a business owner recently.
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“Everything in my business rests on me”, he said. “I mean, I love my business, I love what I do, but I am stuck in it. If I leave, things will break. I cannot stop working, and that’s pretty much all I do. It consumes me. I am missing out on life. I am missing out on precious time with my family. I am just working, working, working to keep this monster I created alive”.
Those were more or less the exact words he uttered. And these words were more or less the exact words I would have uttered ten years ago as I felt imprisoned by my multi-million dollar consultancy.
Chances are you can relate because this is the reality of almost every professional service business owner, regardless of the size of your service business.
Here’s the problem with how most of these types of businesses are operated by their owners.
The business is (often extremely) vulnerable and unpredictable, and they work only when the owner works. Like my client said as I met him, everything rests on him. And this is the main problem.
A business that operates at the expense of the owner, is essentially a broken business. Sure, the business might turn a profit and work with great clients (as mine did from time to time), but as long as the prerequisite is that the owner has to provide constant “life support”, the business is not healthy. And with life support, I mean working extra hours, paying yourself too little, compensating for the shortcomings of your team members, etc.
That’s not healthy. It’s not sustainable. And that’s not how it should be.
In my business, although it was successful by most people’s standards, the worst thing was the unpredictability. Despite winning great clients and doing what I loved, I was constantly stressing over where the money would come from, and when.
The more I grew, the worse it got.
That taught me why you should never grow a business that is not healthy and profitable at the core.
Ironically, the solution that only a small fraction of business owners implement is very simple. Yet, owners are “too busy” to implement it. They are too bogged down working in their business, too short-term focused and they never take the time to do the only thing that will set them free. Which is to fix their offering and implement three core systems.
I can guarantee you that if you don’t get these four things right, your situation will never change. You will never see the growth you want, the predictable profits, and the freedom. With twenty years of experience building service businesses and consulting service businesses, I can say this with a great deal of certainty.
So, let’s get to it.
Here are the four core things you need to dial in. When you get them right, you earn yourself a new set of problems, but let’s deal with them later. I mean stuff like team building, leadership, finance, payroll, admin stuff, etc. But let’s park these things for now, because your business first needs to get healthy and profitable.
Get The Strategy And Offering Right
The first problem that needs to be fixed is usually the offering (the services offered). More often than not, the offering is too broad and too generic, and the pricing and business model are weak.
By saying what everyone else is saying, and by positioning your business and services through generic category terms, you’re asking prospects to connect the pieces, to figure out how you’re their best choice. They won’t. It’s too complex, and their attention span is too short. You must make it simpler and easier for them.
Secondly, with a too broad and generic offering, you’re likely serving too many customer segments with many different needs and requests. That means you’re watering down your positioning, and you’ll eventually become mediocre. It’s tempting to serve anyone who wants to buy, but it’s not a strategy.
Your strategy needs to be highly focused, or your offering will be all over the place. To become profitable, you must know which customers and which offerings are the most profitable and fulfilling for you.
When working with clients, this is always my starting point. In every business, there are inefficiencies. Even if a company turns, say, a 20% net profit, there are activities, clients, and offerings that provide little or no profit. So you’re best off weeding out everything that does not provide you with exceptional profit.
As I already said, the worst thing you can do is grow an unhealthy business. Therefore, the first step is to understand what is profitable and potential, simplify, then define a strategy around that foundation.
Your offering is absolutely vital for your success. You cannot compensate for a weak offering. So get it right. Position it in a way that is clear, where you can make it a No-Brainer for prospects to work with you.
The far majority of offerings in the professional service space are weak, which means you have a great opportunity. Just look at the sea of sameness online, and you’ll understand what I mean. For example, “The 360 agency", or “full service” is not a position, nor an offering. Or to claim that you “transform brands and businesses” is not a position, nor an offering.
You need to get much more clear and specific, and you need to ideally solve a painful, urgent problem, not a nice-to-have.
Create offerings that you can standardize and systematize, otherwise, you will get trapped in the delivery, and you will not be able to scale.
With s sound strategy and offering in place, you’re ready to implement the three core systems you must have to make your business work (without you doing all the work).
1. The Lead Generation System
Almost every business in the professional service space relies on random referrals. While getting referrals is great, the fact that they are random is not.
The main reason you might struggle with predictability (and the cash flow issues that come with it), is that you don’t have a systematic way of generating leads. To make your business grow predictably, having a system in place that generates leads from multiple sources is absolutely vital.
As with most things that relate to systems, owners typically don’t get around to doing this. It’s too complex, too time-consuming, and too long-term, considering the short-term fires they are putting out. And that’s the paradox, of course.
At The Simple Company®, we have built all these systems for you, so all you need is to implement them and make small adjustments to them to make them work for you. This takes out the biggest pain in the equation of building systems.
Lead generation comes down to three core steps:
1. You must have ways to reach the right people
2. You must know how to connect and create trust and interest
3. You must be able to activate them
There are dozens of great ways to do all of the above. We have a vault full of plug-and-play tactics waiting for you, should you want to make it faster and easier for you. All you need to do is to have a system, put new tactics into place, and track them.
Without a lead generation system, your machine won’t work. It will start and stop, and you will not have the predictable growth you want.
The Sales Conversion System
Unless a business is able to convert leads into paying customers (and into repeat business) at a cost lower than its cost of delivery, it will not survive. And unless the business can generate enough volume of sales and profit to cover its operating expenses, it will run out of cash.
Your ability to maximize the conversion rates between leads to sales while minimizing the costs of doing so is one of the most critical skills you can have.
When lead generation, prospecting, engagement, sale conversations, and follow-up activities are sporadic or left to chance, a business will inevitably suffer.
From the hundreds (if not a thousand people by now) I’ve consulted and coached since I switched from consulting large corporations to focusing on entrepreneur-led businesses, only a small fraction have a systematic approach to converting leads into sales. And an even smaller fraction master the sales conversation.
Let’s imagine your business generates 100 leads per month. Let’s assume the average sale you make is $30.000.
The opportunity you have is to make $3 million in sales per month from those 100 leads, (not even to mention the back-end sales opportunity that comes from them, which could be worth much more). No one will convert all the conversations into sales, of course. But the question is, how do you optimize and maximize your opportunity?
You’re paying the price of generating the 100 leads (in time, money, and energy) regardless, so why not get more out of what you already have?
To do so, you need to systematically perform three types of activities;
1. You must engage with the leads and move them into a sales conversation (or any other means for getting them to consider your offering).
2. You must close the sale
3. You must follow up with those that did not buy
Mastering these three core activities will significantly increase your sales and profits.
Let’s say Company A converts 20/100 leads into sales conversations, and they convert 1/6 of conversations into paying customers. They make 3.33 sales out of the 100 leads they generated. With a 30k offer, that means they make around 100k in sales.
Company B converts 30/100 leads into sales conversations, and they convert 1/3 of the conversations into customers.
The same amount of leads. Same costs and everything.
How much more money is Company B generating?
Company B makes three times more money from exactly the same starting point. In this example, they make 300k per month from the same amount of leads. I’ve seen this play out many times, by the way.
Your offering will play a huge role in how well you are able to convert. And so will your sales conversion system. So why not strengthen both and put the multipliers to work for you?
By learning how to systematically engage with prospects, mastering the sales conversation, and following up with prospects and past clients, you will be adding exponentially more revenue and profits. It’s a no-brainer.
If you work with us, we help you implement your sales conversion system, and we train you to build up the capabilities and the team you need to make this happen in the simplest, fastest way possible.
The Value Delivery System
The last piece in the three most crucial systems in your business is your value delivery system (also called the fulfillment system).
In addition to the three systems I cover here, you will eventually need a couple more systems, such as your whole operating system, and a management system. But before you earn yourself leadership problems, recruitment problems, accounting problems, etc., you need a healthy, growing core business.
The Value Delivery System is made of your core processes for delivering great value to clients consistently at a profit. No more roller-coaster profitability, please!
The key to making our value delivery system work is to standardize as much of what you do as possible. Once you understand how your delivery system currently works (which for most companies is a big deal in itself), you can start to design and engineer it to become more predictable, reliable, efficient, scalable, and profitable. Interested?
Oh, and not to mention, the consistency through which you deliver a specific result over and over is the best way to carve out your position and build your brand, to get referrals, testimonials, and more recurring revenue.
As you can appreciate, your delivery system is absolutely vital to the health, sustainability, and growth of your business.
But how do you go about building such a system?
The way we do it is by simplifying. Maybe not a surprise, coming from a guy who named his company The Simple Company.
Simplifying means focusing only on the essential, and designing it to work as beautifully as possible. Simplifying is about optimizing and maximizing each part of your system to perform at the highest possible level of efficiency. To say it in one word, it’s about achieving leverage.
The profit of your business is the difference between your revenues and costs, as you know. So making your business predictably profitable and scalable takes leverage.
I define leverage as the multiplier that sits between the inputs and the outputs in your business. If you sell time, and for every hour you sell you have to work the same amount of hours, you have zero leverage. But if you are able to “build it once and sell it forever” (as our slogan goes for our Beta™ program where we help clients productize their service offering), you build leverage into your model.
So without going too deep into standardizing and systematizing the value delivery of your business, let me just say that unless you can deliver value predictably at a profit, without you having to spend a big part of your time doing the work, you will never set yourself free. Never. Don’t hate me for saying it, I’m just stating the obvious fact.
The more time you spend inside your operations, the less of an entrepreneur you are, and the more of an employee you are. Yes, you might own your job, but you won’t be able to multiply your own time.
So the best way is to create a unique method, standardize and document it, to train other people to deliver the magic. And that starts with shifting your mindset, getting over your perfectionism, and embracing the fact that being an entrepreneur and business owner is not about being the best at everything. It’s about building systems that deliver value and profit.
The systems stuff is often seen as painful and boring, kind of like how you might think of accounting. But building systems is the only way to reach the growth, impact, and freedom you want.
Because we know systems are hard and painful, we have built plug-and-play systems you can implement with only minor adjustments. And that’s why we have a world-class systems expert on our team that can help you.
Whether you like it or not, business success rests on the stuff you do systematically and consistently over time (just like anything in life, really).
There exists an equation at the back of your business, whether you are aware of it or not (you obviously should be aware of it). That equation includes the numbers and conversions that you hit in your business, the scorecard if you will. At The Simple Company, we track and measure seven core metrics both for ourselves and for clients.
Everything you do, therefore, should aim at improving the numbers or the conversions, or ideally both. Because when you make even slight improvement here and there, you can create exponential results. Leveraged results.
The way to impact these numbers and conversions is to get the four pieces I have described dialed in.
1. Your Strategy and Offering
2. Your Lead Generation System
3. Your Sales Conversion System
4. Your Value Delivery System
Without successfully implementing these systems, without tracking and improving them, I can guarantee you that your business will never live up to its true potential. And it is very likely you’ll stay at a level you can barely handle, a level where your business rests entirely on you.
So ask yourself, is that a business you want? For how much longer will owning that kind of business be sustainable? Fun? Fulfilling?
At the end of the day, as entrepreneurs, let’s face it.
We want it all.
More impact. More money. More time. More freedom.
And paradoxically, the only way to achieve that is by focusing on less, rather than more. As we weed out “the fat”, then you need to systematize and scale up the parts that do work. And that way, you won’t have to.
Sounds great, doesn’t it?
If this is something you would like help with, this is what our membership is all about. We help you craft a winning strategy, from your business model to helping you create smart, great offerings, then we plug in the systems, test them, and scale it all up.
You’ll get help from our team of experts and coaches.
To do this, you’ll need somewhere between three to twelve months, depending on where you are at. Most likely at least six months.
To learn more, book a call at www.thesimplecompany.com/meeting or email us at email@example.com
Founder - The Simple Company®
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