Do You Have a Business or a Job?

Fees
Most business do not know how to set their fees properly. It’s not just that they leave “Money on the Table” but very often they struggle to derive sufficient income to make the business pay more than a decent wage. A business owner should be compensated for the role they play in the business as any employee would and in addition be compensated for the risk they have taken in opening up the business in the first place. Also they need additional funds to develop the business.

Yet I have found most people simply look at what the competition are doing and charge similarly, without understanding their business model. Fees should be set by understanding your true cost of doing business plus the true value you bring to your customers/clients.

Multiple Steams of Income
All businesses have a core service that they offer, however very often their customers/clients will purchase further services/products from that business as they know, like and trust the business. Therefore the hairdresser can offer a sunbed tanning service, the estate agent offers mortgage brokering service, letting agency, etc. As they are your existing customer/client they will be pleased that they can purchase these additional services from someone they know they can trust.

A business needs to have in place a sales system that has been tried and tested to your particular business model and is known to produce certain results. There are two types of sales systems. One for service providers (Accountants, Lawyers, Plumbers, Joiners, Builders, Web Designers, etc.) and one for products (retail shop/website, restaurant, wholesale) and will consist of four stages.

Sales Funnel for a Service Business

Filling the Funnel
In using online and off line techniques you will identify people and organisations that have a reasonable possibility of being interested in your service. These will include people who are ready to buy now and those who may buy in the future. Your system with the use of automation should be able to identify the most likely hot prospects. You funnel will also contain a follow up system for those customers/clients that are not ready to buy.

Schedule Appointments
In this part of your system you are only interested in making contact with your prospects with the sole objective to “Get the Appointment” you are not trying to sell them your service.

Meet with prospects
This is where you meet with your prospect either face to face or using many of the technology options available today. You process here should identify the customers/clients’ needs. You can then educate them on how your service will benefit them. At no point should you sell to them. If you genuinely believe that your service can benefit them and they are having difficulty is seeing this then it simply means you need to educate them some more.

If you identify that you cannot help your prospective client improve their position then you should thank them for their time and walk away once you have asked from if they know of anyone that may have a need for your service.
After all you have now educated them on what you do and not tried to sell them something they don’t need. They are on your side. Of course for may prospects they may not be ready to buy so they go back into your funnel for follow up until they are ready to buy. Again a lot of this follow can be automated. This part of the process may require one or several meeting depending on the service you are offering.

Close the sale
When you have successfully educated your customers/clients they will be ready to buy. You have now completed they most expensive process for any service business which is acquiring new customers. Make sure you look after them! That’s covered in the next section.

Sales Funnel for a Product Business

Attract prospects
Irrespective of whether you have a bricks and mortar or online location or a combination of both you need to attract people and organisations to your location. Your marketing should be targeted to those who are most likely to buy. You should where possible use a system that allow you to follow up with those who were not ready to buy until they are ready to buy.

Real estate
Once you have attracted them to your location you need to entice them to stay long enough to discover what you can offer them. If its bricks and mortar then a shop that is well presented, clean, warm/cool (depending on the climate) with friendly help available if needed. Online in addition to making it easy to navigate and a good display of products you also need to provide additional information and the use of images, videos and audio where appropriate.

Demonstration
Depending on the product a demonstration may or may not be required. If you were buying everyday food then it is unlikely a demonstration would be required. If it was a car on the other hand then a demonstration would almost certainly be required. Online this can be achieved by producing a video showing the product in use. In both these situations the demonstration should appeal to people’s emotions.

However if it is not fit for purpose then a sale should not to be made. Difficult online I agree, however a generous returns policy should help here with additional benefit of closing more sales as you take away buyers risk.

Close the sale
When you have successfully educated your customer they will be ready to buy. Make this process as easy as possible and with the fewest possible steps, particularly online. You have now completed they most expensive process for any service business which is acquiring new customers. Make sure you look after them! That’s covered in the next section.

Even many successful businesses do not look after their existing customers/clients.  Imagine what would happen to them if they did!  You should have in place systems and procedures to make sure your customers/clients are looked after all the way.

• Do you have a new welcome experience for your customers/clients?
• What processes and systems do you have for looking after existing customers/clients?

When you provide a great experience for your new customers/clients they expect that every time.  When you don’t deliver they are disappointed.  It’s not a logical thing, it’s purely emotional.  That’s what makes it dangerous when we don’t offer consistent value and service to our customers/clients and you and I know that we make so many decisions based on emotion.

Every procedure, every process that is used to operate your business should be contained in the company’s operations manual. At the Jim J Davidson Partnership we have three manuals that makes up our operations manuals. These cover:

Finance
Financial planning, accounting, cash flow, bookkeeping, payroll, tax and KPI’s (Key Performance Indicators)

Marketing
PR & advertising, sales, social media, email marketing, graphic design, copy-writing, bloging

Operations
Production, diary management, phone answering, transcription, email management, helpdesk support, vendors, outsourcing, process for developing new systems

Having an operations manual is important for several reasons:

If you take on new employees you have a reference manual to guide them through training, ensures constancy and cuts down the time someone has to spend with them personally to being them up to speed.

If something is not working in your business it allows anyone in the organisation to investigate why and rectify the situation.

It’s make your business a much more valuable saleable asset should you wish to sell it or pass it on to future generations.

When a business has implemented all of the above it does not require the presence of the owner at a particular location on a day to day basis. In fact with use of technology the owner can be anywhere in the world and still control their business. The chances are that anyone who has built up a business to this stage is unlikely to want to laze around all day.

So what do they do now? They would focus on building their asset base. The more time they focus on this then the wealthier they become. The reason for this is when you focus on building your asset base you are carrying out one time actions that produces continuous streams of income with very little maintenance. i.e. you purchase a property, have a system in place for it to be managed and the rent comes in every month without any additional effort from you.

Want more information on this then visit our section on property.