The Most Important Thing To Understand About Your Business
When I talk to business owners I’m often shocked at how little they understand about one of the most important things about their business.
Perhaps even worse, there are quite a few well known gurus and experts that have made me cringe when they start talking about “this” because they get it wrong. It’s strange they don’t have a better understanding because it governs everything they are trying to teach.
What is “this”?
It is how your business makes profit and generates cash.
In particular it is how the performance drivers of your business model fit together.
Every business has a business model, even if it’s not understood. It’s usually evolved rather than been designed and it may not work consistently.
And the simple fact is that if it’s not understood, it can’t be managed properly.
Time, effort and money can’t be invested with any certainty outside of guesswork and gut-feel. The consequences are inevitable.
What Is Your Business Model?
If I asked you, can you sketch out your business model on paper or explain it to me in words?
What I hear from many other business owners (and managers in bigger businesses) is a broad financial understanding based on two main concepts:
- More sales revenue is good – it’s not always true so email me if you’d like to know about the exceptions.
- Lower costs are good – again not always true as some businesses have discovered when they have cut the wrong costs in these difficult times.
Unfortunately most decisions usually breach one of these principles because they involve trading off one for the other.
However without a detailed understanding of the business model, these decisions are difficult and stressful.
The Solution Is To Have Your Own Objective Business Model
If you have a complicated business, I recommend that you sit down with a commercial accountant and talk through, design and build your own business model.
It needs to start with the things that you can control (or at least influence) and predict the outcome of the decisions you are considering.
Of course that takes time and money and, to be honest, it’s tough to find the right accountant because too often, they don’t understand how marketing and sales work.
Over the last couple of weeks I’ve been preparing a spreadsheet model for you based on the Six Steps Profit Formula.
I’d describe it as simple based on the limited number of items that need to be input but it has taken a surprising large amount of time to develop and test.
My original intention was to give it to all my email subscribers but I changed my mind.
It’s too good.
I only want to give it to business owners who are serious about growing the profit in their businesses and who want to develop a deeper working relationship with me.
It will take a couple of more days to complete the report that goes with the model so that you understand how to use it and, more importantly, what it is saying about your business. I will email members when it is ready.
What Is Profitable Growth Strategies?
It is my new online business training membership website that is packed with practical help, ideas and tips on how to grow your business profitably.
I could write a lot about it and tell you how wonderful it is but I believe the best thing is to show you and let you take 30 days to look around and put the training into action.
You will learn more if you click on the appropriate link:
After the 30 day trial, there is an ongoing monthly fee while you stay a member but you can stop at any time.
I launched the membership at a very special price and last week I told the website designer to increase the fees from Wednesday January 23, 2013.
The ongoing fees on www.profitablegrowthstrategies.com after the 30 day trial will increase from $47 to $67 per month.
And at www.profitablegrowthstrategies.co.uk, the increase is from £27 to £47 per month.
Even at these higher prices, I believe the training is great value and you have the 30 day trial to prove that for yourself.
If you click on the link before the website designer has switched pages and sign up, you can lock in the lower rates for all time you are a member of Profitable Growth Strategies.
That’s right… join today (Tuesday January 22nd, January 2013) or early tomorrow and you will only pay the $47 or £27 per month after your trial has ended and if you decide to stay a member.
And as a bonus you’ll receive the business model spreadsheet I’ve been working hard to develop so that you can pinpoint where you have the best opportunities to increase your sales revenue, to improve your profits and to put more cash in the bank.
If you get there too late, then I’m sorry, I can’t backdate the price.
You can still join for the 30 day trial and see how good the training is and how much there is. You’ll then get the business model spreadsheet.
I Promised You Something Special
Clients have paid a lot of money for me to write and develop spreadsheet models for them. In one extreme example, a client paid me about £20,000 for one very large, all singing, all dancing financial model that took months to write and test.
You don’t have to pay anything like as much as I’d charge a small business client for something similar but tailored to that particular business.
You can have it for a $1 or £1 investment in a 30 day trial of Profitable Growth Strategies.
I realise that some of you won’t want it so I have something else to give you.
Last week I talked about the important distinction in your marketing between prospects who are ready to buy (from you or a competitor) and those who are in the process of getting ready.
I said that for those getting ready, the relationship needs to be nurtured to build trust and preference.
A great way to do that is for non-information businesses (i.e. not consultants and coaches) to use information products that helps potential customers make the right decision.
For example, used car salesmen have a certain reputation – hence the expression “would you buy a used car from him?”
But what if one offered a free report “The Consumer Guide To Buying A Used Car: How To Spot And Avoid The Common Scams That Rip-Off Innocent Buyers.”
Would that make you think this supplier was different from the rest?
I interviewed Peter Thompson on using information products as a bonus for people joining my previous membership website, Your Profit Club.
I want to give you the mp3 recording to download.
Peter is the UK’s leading author for Nightingale Conant and has published many information products over his career as a business growth and personal growth achievement specialist. He’s a great speaker and I think it’s a very interesting interview.