The Three Year Plan


 

December is a natural time to reflect upon the accomplishments of the past 12 months, and to set goals and objectives for the New Year.

In doing so however, most of us think too much about next year, and too little about our longer term and multi-year business horizons.

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Growthink Innovation Series: FinTech


 

[To listen to a recording of the webinar, Click Here

On this recorded webinar, the Growthink Innovation Series turns to the transformative world of financial technology.

According to PWC, within the next 3-5 years, cumulative investment in FinTech globally could exceed $150 billion. Quite simply, the digital, mobile, and Internet revolutions are transforming the way customers access financial products and services of all types, and across all consumer and business sectors.

Traditional financial products and services being fundamentally disrupted by these new digital technologies include consumer and commercial banking, fund transfers and payments, investment and wealth management, insurance, and investment banking.

Webinar Description: Entrepreneurial and Investment Opportunities in Fintech

You’re invited to listen to a webinar, hosted by Growthink co-Founder and Managing Partner Jay Turo, where a select group of Fintech entrepreneurs and investors will share how they and their companies are winning in this incredibly dynamic space.

The panelists are:

  • Mr. Rafe Furst, Co-Founder Crowdfunder. Crowdfunder is the equity crowdfunding leader for sourcing and funding high-growth ventures with a network of over 130,000 entrepreneurs and investors. Crowdfunder and its VC Index Fund provide the opportunity for direct online investment into single ventures, as well as diversification into a broad VC-led portfolio (Index Fund) of early-stage startups – backed by many of the world’s leading Venture Capital firms and private investors.
  • Mr. Alo Ghosh. Alo Ghosh has over 35 years of experience on the frontiers of FinTech including teaching finance at Wharton, co-leading McKinsey's Finance practice, running a $4 Billion sovereign wealth fund, and is now an angel investor in 2 deep learning based FinTech startups.
  • Mr. Steve Hensley, Executive Vice President at KAL Software, a global software company operating at the forefront of the ATM industry. KAL’s product suite of applications, management servers and platforms enables ATM hardware, software and services from multiple vendors to work together perfectly.
  • Mr. Matt Stewart, Senior Marketing Manager, LendingTree (NASDAQ: TREE). LendingTree is an online lending exchange that connects consumers with multiple lenders, banks, and credit partners. Since being founded in 1998 LendingTree has facilitated more than 32 million loan requests.
  • Mr. Ned Tobey, VP Product Management, Q2 Holdings (NYSE: QTWO). Q2 Holdings is a leading provider of secure, cloud-based digital banking solutions. Q2 empowers community-focused banks and credit unions with digital banking solutions that help them "scale smart and grow beyond" with retail and commercial account holders.

On the webinar, the panelists answer questions including the following:

  • Where are (and will be) the biggest areas of financial industry disruption and change and why?
  • How is the real / impactful is the world of mobile payments and where is it going?
  • What does financial disintermediation really mean? How much savings / efficiencies gained is there in peer-to-peer financial platforms like Prosper,          Lending Club, et al?
  • What happens to "cash" in this coming "cashless" society? What does this mean for globalization and traditional concepts of national sovereignty?
  • Which are some "under-the-radar" FinTech companies and entrepreneurs that smart investors should really be watching?

Listen to the webinar via the below link:

https://attendee.gotowebinar.com/register/6249526614805165060 

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Why You Can't Live (or Die) Without Business Systems


 

Business systems, business systems, business systems....why is everyone always going on and on about systems in your business? 

Well, it's simple really. If you don't have a business system, and your entire operation relies on you personally performing certain actions, then you really don't have a business. You may be a really busy and even profitable self-employed, independent contractor, but you do not have a business.

A true business may require your leadership, strategy, vision, and even daily performance of work. But importantly, it will also continue to operate and make money even if you take a day off, go on vacation for a month, and be prepared for this, even if you die. 

What is a Business System?


In its simplest form, a business system is a process or collection or processes that dictate the way your business operates.  You may have a system for client acquisition, product delivery, customer loyalty, invoicing, supply chain, etc. 

The more automated and error-proof your system, the more you are able to dedicate your time and energy to growing your business rather than simply running the day-to-day operations.

If more time and greater revenue is not reason enough to have solid systems in place, let's consider these other factors that influence why you can't live, or die, without a business system.

Funding

Try walking into a bank or a venture capital firm and telling them what a talented widget maker you are and that they should give you money to build your company. 

When they ask for your business plan (a first step in building a business system), tell them you don't need any of that mumbo jumbo, you are Joe Blow, Great Widget Maker EVER!  What do you think is most likely?  That they will hand you a check or that they will laugh you out of the building? 99.99% will laugh hysterically (the other 0.01% are your parents and they are biased).

They will laugh because they recognize that a person is not a business.  Yes, one person can create a business, and one person can be the vision and soul behind a company, but no one person is the company.  

Apple is moving on without their visionary Steve Jobs, KFC is still selling chicken just fine without the Colonel, and Microsoft is still a giant while Bill Gates focuses on philanthropy.   You may be central to your business, but to have real value, the business needs to be sustainable without you.

You Can't Sell Yourself Into Slavery


Let's say you have worked for your business for a few years, developed a good customer following, revenues are high, but you do everything yourself and nothing is documented.

If so, think about your exit plan.  Will you someday just close up shop and let all those clients just melt away?   Will you pass the business onto your children or chosen successor?  Will you sell the business?

If you have a thriving business, selling may be an excellent idea and may significantly contribute to the funds you have to support your twilight years.   But how will you sell a business that doesn't have clearly defined systems?  How do you sell the business if you are the business?

Ok, so maybe the sale's agreement stipulates you will stay on as a consultant for a few months or years to show the new owners "the ropes" and transition the client base.  Guess what you will be doing in those months? That's right, creating systems! 

The fact is that you will sell your business for a lot more money and to a wider base of potential buyers if you have clearly defined systems in place.  When you are the business, new owners have to hope they can either replicate your actions or have a plan to do it better.  When you can show them proven business systems they can easily adapt, they will clamor to buy you.

What Will You Bestow?


Perhaps your dream is not to sell your business, but instead to pass it on as a legacy to your children or a chosen successor.  There are many strong family businesses in the United States that have been passed on through generations.  Is it your goal to be one of them?

The argument here is the same as in the previous section.  How do you bestow a business if you are the business?  How will you enjoy your retirement in Tahiti if Johnny Grandson is calling every two hours because he needs to know how you did this and that?

You Can't Die in Peace

Is the income from your business a necessary part of your household income?  If you die, and that income stops, how does your family survive?

If you need a solid reason for building business systems, perhaps this is it.  A business that can continue running without you, even if not running 100%, but can survive even without you, has value to your family.  It can be operated by relatives, it can be passed on to heirs, and it can even be sold.

But if your business evaporates into thin air then minute you stop breathing said air, you are doing your family a disservice.

A business with a solid foundation of systems will survive you.  It may even become your legacy.  Your brand, when attached to proven processes and workflows, can endure.   

Feeling Squeamish?

Have you felt the tingle of cold sweat as you read this article?  Are you wondering how you will ever sell your business when it primarily exists in your head?   In many ways, a business is collection of abstract concepts.  It's your reputation, your relationships with clients and suppliers, it's the quality of your product and service, and it's the word of mouth on the street.

To solidify your business, you need to give it form by building systems that can be documented, followed, and replicated by others. 

Depending on the nature of your business these systems may require a strong team, wise delegation, trustworthy partners, and reliable vendors. Maybe all you need is clever automation that can be passed on to others.

If this article made you feel at risk, then take the time to carefully analyze your business. What can you automate?  What can you document? What can you delegate?  What can you reliably outsource? 

Find ways to truly evolve from a self-employed worker to a smart owner of successful business systems.  Build it right and you can live (and die) in peace.

 

Suggested Resource: Would you like to know how to build business systems that dramatically improve your business, and turn it into one worth $10 million or more? If so, check out Growthink's 8 Figure Formula. This video explains more.

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Growthink Launches New Business Plan Informational Website


 

We are really excited to announce we have launched a new business plan website, BusinessPlanTemplate.com.

As the name indicates, the site will include business plan templates for all types of businesses. Currently, we have forty templates on the site. Templates are organized into 3 categories: Food & Retail, Service, & “Other” business plan templates.

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Stock Market Up, Confidence High - What Does It Mean for YOUR Business?


 

The three big economic stories since last month’s election have been a dynamic stock market rally, a strengthening dollar, and rising economic confidence.

Here are some encouraging statistics to ponder:

  • The Dow Jones Industrial Average closed Wednesday at 19,549, up more than 9% since Election Day.
  • The Dollar's steady strengthening continues, since November 8th up 3% against the Euro and 8% against the Yen.
  • The U.S. Economic Confidence Index this week reached its highest level in 9 years, up a full 15% since the week before Election Day.
  • In November the U.S. economy added 178,000 jobs, reducing the unemployment rate to 4.6%, its lowest level since August 2007.

Of course and as one looks for them, threatening economic clouds can be found everywhere. But for now, the US economic mood is one of optimism, confidence, and possibility.

And so the ambitious executive should ask: How should 2017 business plans and performance expectations be “reset” in light of this improved outlook?

Here are three ideas:

#3. Raise Capital. As your business has adjacent opportunities for which the raising of outside growth capital would accelerate their pursuit, now is the time to go out there and get it.

In my 15 years of working with companies of all types and sizes with their fund-raising efforts, I have found that overall economic confidence is by far the most important factor as to the success or failure of any particular company's financing efforts.

When economic confidence is low - as it was during the Great Recession -almost nobody can raise money.

And when confidence is high, for example as it was during the late 1990s, almost anyone with a solid plan and who gives a heartfelt, assertive effort can.

So if the predictions of 3%+ growth for the US economy in 2017 hold true, then with them will come increasing economic confidence and thus a far easier time for companies of all types and sizes to raise capital.

#2. Work Harder. I vividly recall a conversation I had with a very successful IT services entrepreneur a few years back. He said that in reviewing his financial records October 2008 to March 2010 he determined that he would have made more money if he had closed his doors and sat on the beach during that time instead of actually running his business!

Well, good economic conditions like these are the karmic reward for those that fought and scratched to keep the "lights on" when times were dire.

AND the right reaction is NOT to work less because getting good results takes less effort, but rather to work twice as hard to profit from all the growth and expansion opportunities frothy conditions uniquely allow.

#1. Raise Expectations. As a proud and lifelong New England Patriots fan, I have been so inspired by the “winning is the only option” mindsets of Messrs. Belichick and Brady.

Sure, there's always some excuse for why a game was won or lost, or why a business grows or does not.

Excuses yes, but really no good reasons.

And just like my Patriots are marching relentlessly toward another division title and Super Bowl berth, so is 2017 shaping up to be a championship season for US business.

And that should be the expectation for all of us - record years for sales, profits, asset allocation, and growth.

The macro conditions are there for the taking.

Now it is up to us to go out and win the game.

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Use the Opportunity Acid Test to Grow Your Business


 

We choose to go to the moon and do the other things not because they are easy but because they are hard.

                            - President Kennedy’s “Moon Speech” September 12, 1962

A fundamental executive leadership challenge is finding the right balance between focusing on what is "core" to one's business and investing time and resources into pursuing adjacent and complementary opportunities to it.

Examples of this include:

  • Traditional services business, web design and IT consulting for example, trying to build and sell software.
  • Restaurateurs trying to package and market their own line of food items - i.e. CPK selling frozen pizzas at the supermarket.
  • Traditional retailers, like flooring, boutique clothing stores etc., trying to build ecommerce businesses.
  • Businesses that develop a work process expertise, like a law firm that is particularly good at attracting new clients, in turn trying to sell that expertise as a service to other law firms.

On the surface, all of these “adjacent” opportunity pursuits seem worthwhile.

They build on business assets and trade secrets, they often leverage "remnant" organizational resources, and diversification of revenues and customers is a sought after business goal is it not?

It can be, and yes effective executives should always default to a positive and optimistic mindset toward opportunities but...

...they obviously 
must be the right opportunities to pursue.  

A simple “Acid Test” way to rate opportunities is to ask two questions:

One, is the opportunity one in which my business can truly be best-in-class?

And two only if the answer to the above is yes, are the market dynamics for the opportunity favorable for its pursuit? 

I call these the internal and external opportunity acid test questions.

Internal in their inward look at the real strengths of a business and its people.

And external in their evaluation of the market landscape in which that business competes.

The internal acid test is easily performed by listing the business’ key strengths, like:

  • Marketing Strengths: Our brand is well-respected and well-known.
  • Sales Strengths:Our marketing-to-sales to conversion is excellent, perhaps driven by a great sales culture, CRM technology, etc.
  • Operations Strengths: Our operational systems allow us to deliver high quality at low cost.
  • Financial Strengths: Our balance sheet is strong and our cash flow is predictable.

As we list these strengths what will arise will be “non obvious” wisdoms as to the likelihood of a successful pursuit of the considered opportunity and perhaps more valuably...

...“aha” moments as to other, more appropriate opportunities for the business to potentially pursue.

“Potentially” is the important word here, because in addition to the opportunity passing an internal acid test, it must also pass an “external” one too, with questions like:

Market. How big is the market for the opportunity? How expensive will it be to pursue?

Customer. Who are its customers? How pressing is their need? How hard are they to reach?

Competition.  In our global age, by far the most important question - and not coincidentally the one that most executives do the worst job in asking - how strong and formidable is the competition?

What advantages - first-to-market, brand, relationship, cost structure, etc. - does the competition have that we will need to match and beat?

What points of differentiation must we build and emphasize to successfully compete and win?

As we honestly ask these competitive questions, very often discouragement can set in.

Everything can just seem really hard.

But this sad feeling is actually a good thing.

Because as we work through the discouragement we really learn if we have an opportunity worth pursuing or just a passing fancy.

If it is just a passing fancy, then we will quickly move on to the next bright shining object that passes our way.

But if it is an actual opportunity, then the internal and external challenges that present themselves to pursue it will embolden us to roll up our sleeves and go for it.

For sure, successfully pursuing any new business opportunity is hard.

But let's never confuse hard with impossible.

By properly performing these internal and external acid tests, we can distinguish between hard and impossible...

...and then relentlessly put forward our best energy toward going for it, crushing the competition, and winning! 

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5 Benefits and 5 Keys to Raising Crowdfunding


 

Crowdfunding is getting a group of regular individuals to collectively fund your venture. And when I say "regular individuals" I am contrasting them to professional investors and lenders like banks, venture capitalists and angel investors.

Clearly, Crowdfunding gives the key benefit of providing funding to your business. But, I have found other key benefits. Below I list those benefits as well as 5 keys to successfully raising Crowdfunding.

5 Benefits of Crowdfunding

1. Market Research

Pre-selling your product is incredible market research. If people buy it, then your marketing message is on target and there is a real need for your product or service.

If people don't buy it, then maybe a market doesn't exist, or you need to adjust your marketing message or target market.

In either case, getting this market research BEFORE raising or trying to raise a ton of money is invaluable. It allows you to test whether you have a winner before going through this process.

2. Built-in Customer Base

When you get others to fund you via Crowdfunding, you build a customer base. If you provide a good product or service, these customers will be prone to buy more products and services from you (the same products, upgrades and/or new products you develop) in the future.

3. Case Studies/Testimonials

Showing case studies and testimonials from customers is a great way to convince new customers to buy from you. And you can get these case studies and testimonials from those customers you gain from Crowdfunding (assuming you delivered them the product/service and they liked it).

4. Word of Mouth Marketing

People who fund your company will tell their friends about it. Particularly if you make them feel like founders/initial investors (which you can easily do via email and on your website).

Done correctly, Crowdfunding can result in thousands of customers, most of whom can tell numerous friends and colleagues about your products and services. This word of mouth marketing can be worth millions of dollars.

5. PR

Local media sources are enamored with Crowdfunding as it's new and unique. As a result, countless entrepreneurs who have raised Crowdfunding have been profiled in local newspapers, radio shows and TV broadcasts.

So, with some legwork, raising Crowdfunding can get you lots of PR.

So, now that you understand the benefits of Crowdfunding, how do you raise it? Below are five keys.

5 Keys to Raising Crowdfunding


1. Inspire People

When you tell your "story" to potential crowdfunders, inspire them. Yes, they are investing in your product or service, but they are also investing in you. Give them an inspiring story about yourself and why you are building your company. Inspire them to want to help you.

2. Provide Value

When people crowdfund you, they need to get something in return, such as equity in your business or your promise to give them a certain quantity of the product or service you create. Make sure potential crowdfunders feel they are getting value for their investment. If not, they won't fund you.

3. Create Social Proof

Social proof is the psychological concept that if someone sees someone else doing something, they are more prone to do, or want to do, that same thing. For example, a line outside a bar shows social proof that the bar is hip/cool/the place to be, and inspires others to want to go inside.

Social proof can be created in Crowdfunding. Here's how. As soon as you launch your Crowdfunding project, get as many of your friends and family as possible to fund it. Then, when others that don't know you go to your Crowdfunding page, they will see that lots of other people have already funded you. This will make them much more likely to fund you too.

4. Market and Build Buzz

Even if you have the coolest company, product or service in the world, chances are that crowdfunders won't automatically beat a path to your door. Rather, you need to market your Crowdfunding raise. Email all your friends about it and tell them to do the same. Tell everyone on Facebook and Twitter about it. And so on. Even if your company is buzzworthy, you need to first create the critical mass of people who know about it and can spread the word. So make sure you do just that.

5. Don't Slow Down


Once you start getting more and more backers to your Crowdfunding campaign, don't just sit back and let the money roll in. Crowdfunding is a fixed-term capital raise. For example, on Kickstarter, your Crowdfunding campaign can only last 90 days. So, once those 90 days is up, you can't raise more money (you'd have to start and market a separate campaign later). So, during the campaign, try to raise as much money as possible. Communicate with those who have backed you. Thank them and tell them to tell their friends to back you too. And make sure they don't have "buyer's remorse" - assure them that you remain steadfast in achieving the vision you laid out when you convinced them to back you.

Crowdfunding is an exciting new source of funding with many benefits. To get it, prepare yourself and follow these steps.

 

Want Crowdfunding for your business? Check out Crowdfunding Formula. The program is a series of videos I recorded that walk you through each of the 14 steps to raising rewards-based Crowdfunding. Many of you have already joined the program and raised money. If you haven't, click here to get Crowdfunding for your business now!

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The Secret to Highly Effective Marketing


 

In this article, I'm going to give you the secret to highly effective marketing.

Let me start with an example.

Let's say your competitor runs an advertisement that reaches 10,000 target customers and gets these results.

  • 1 percent response rate (response rate means that prospective customer visited competitor's website, went into their store, called them, etc.)
  • 35 percent conversion rate (conversion rate means the responding customer then purchases)
  • $500 price per widget (widget being the item sold by your competitor)
  • 1.5 widgets per buyer (average buyer purchases 1.5 widgets in initial order)
  • 30 percent profit margin
  • 10 percent repurchase rate (10% of customers buy from your competitor again)

Assuming the ad reached 10,000 target customers, your competitor's gross profit from the ad would have been $8,662.50 (minus the cost of the ad).

Now let's assume that your company did a 20 percent better job on each of these factors. Your results would be as follows:

  • 1.2 percent response rate
  • 42 percent conversion rate
  • $500 price per widget
  • 1.8 widgets per buyer
  • 36 percent profit margin
  • 12 percent repurchase rate

Now let's look at the results.

If your ad reached the same 10,000 target customers, your gross profit would be $19,596.

That's 2.3 times greater than your competitor's.

Now, what would happen if you generated 2.3 times greater profits than your competitors every time you ran an ad?

The answer is that you would absolutely dominate them.

Now, the key marketing secret that I'm sharing with you here is that you don't have to revolutionize your marketing system. Rather, small, 20% improvements in each part of your system lead to revolutionary results.

So, here are some ways in which you can improve each part of your marketing system:

Response Rate

The more you know about your customers' wants and needs, the more easily you can design advertisements that appeals to them.

And the more you know about them, the better you could craft a unique selling proposition (USP) to attract them.

For example, if you are local hardware company and you know your typical buyer is a busy male with a wife, kids, and dog, you could easily craft ads with a higher response rate.

You could also boost response rates by developing better offers that attract customers, such as an offer for a 90-day money-back guarantee.

Conversion Rate

Remember, conversion rates are the percentage of prospective customers that you converted into actual customers.

A few ways you could increase conversion rates include having a better process in place for training your staff and sales team, providing better employee incentives (e.g., commissions or bonuses for closing sales), or by developing and testing sales scripts that boost results.

Number of Widgets Per Buyer

To increase the number of units purchased per transition (including purchasing more widgets or related items), you can rely on similar tactics to increasing conversion rates such as better hiring, training, sales scripts and so on.

Remember McDonalds doubled its profits when it started asking "would you like fries with that?" and increased them again when it starting asking "would you like to supersize that?"

Profit Margins

Better systematizing your business and implementing the right processes and procedures will allow you to generate higher profits per sale than your competitors.

Repurchase Rate

Finally, to increase repurchase rates, do a better job of communicating with your clients and showing them how special they are. For example, send them emails, call them, or send them letters in the mail to educate them and remind them that you have products and services that can help them.

As you just witnessed, making small improvements to each part of your marketing system is incredible powerful and massively increases your profits. If you want to learn more, check out our "Double Your Profits" program which provides detailed training on how to make these improvements in your business.

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The Election: With Change Comes Opportunity


 

Last week, I wrote about the Business Physical and of the importance of evaluating a business’ “red,” “yellow,” and “green” areas and proceeding, changing, and innovating accordingly.

As I wrote that post, the most surprising presidential election result of my lifetime took place.

Along with the political change that it represents, so does it foretell a changed landscape of opportunity for businesses of all types and sizes.

This changed landscape starts with the various prognostications on “industry” winners and losers.

Potential winners include pharmaceuticals, infrastructure, and traditional energy, and potential losers include renewable energy, carmakers, and real estate (on fears of higher interest rates).

But let’s note well that these prognostications should be taken with a big grain of salt, as they are made by the same set of pundits that got the election results so wrong to begin with!

But there is one thing as businessmen we can be sure of - that with change in Washington - like with big change of any type - comes big opportunity.

Yes, much of this opportunity will flow from changing federal government policies, but the election result should also be a wakeup call to “reset” on business as usual.

A reset where we reflect on the idea that no matter how long things have been done a certain way - and no matter the conventional wisdom as to how they will continue to go - change is always only a moment away.

As businesspeople, our first responsibility is to find the opportunities in these changes.

And to then act on these findings with velocity and determination.

Here’s three ways how:

#1. Do that Business Physical. As I outlined last week, positive business change starts with undertaking a structured and thorough review of “where things are now” in a business and its marketplace.

A quality business physical drills down into the real value drivers of an enterprise, how to enhance them and how to fend off the constant existential threats to them brought on by fast changing markets, competition, and customer preferences.

Do the physical yourself, or reach out to a qualified advisor to do it for you.

#2. Challenge the Conventional Wisdom. Whatever’s one’s politics, everyone should reflect long and hard on how wrong the “conventional wisdom” was as to the election’s course and result.

As it does in politics, in business echo chambers of opinion and consensus can quickly get formed and hardened

But just because everyone believes something to be so doesn't make it true!

A great exercise to breakthrough “stuck” thinking is to look at our business and our options from a “tabula rasa” place - letting go of legacy considerations, sunk costs, and the various frustrations of things that just didn’t work out - new hires, product launches, sales campaigns, etc.

As we let go, we start to see the choices and opportunities available to us from a fresh and “future forward” place.

Yes, the realities and limitations of our business model and marketplace will come rushing back to us, but it can be surprisingly high ROI (and exhilarating!) how far just a little bit of pure visionary thinking can take us.

#3. Hard Work Trumps All. Whatever one's politics, the energy and work ethic displayed by both candidates through the long and intense campaign season - unceasing 18+ hour campaign days - should be inspirational to all.

And these were a pair of 70 year olds!

Balance is an admirable life goal, but there’s also a time and place for intense “24/7” effort as so many endeavors of potential greatness cannot be achieved by any other means.

So let’s use this “Black Swan’ election as a spur to take stock of where we are, to let go of the conventional wisdom that might be holding us back, and work hard, hard, hard.

And let's all hope, believe, and act to make it so that the New Year and the new regime in Washington brings high ROI change to all of our businesses too!

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Would You Pass a Business Physical?


 

Positive business change starts with a full and complete understanding of what the bottlenecks to positive change are and what can/must be done to remove them.

This may seem obvious, but I am constantly surprised by how many otherwise experienced executives invest time and resources into mission-critical initiatives without understanding the right business levers to pull (and how to pull them!) to transform the mere hope of positive change into its actual reality.

This process of understanding I call the "Business Physical" and like a personal health physical when done right it:

1. Identifies the Green, those areas that are working - i.e. things like good exercise and diet habits in a personal health physical that should be maintained and built upon.

2. Identifies the Yellow, those areas where as a business we are falling short and corrective measures are needed - i.e. like when a health physical comes back with high blood pressure, high cholesterol readings, etc.

In a business physical, green and yellow areas include things like:

  • Company culture. A reading of the qualifications of the people in the business, their work ethic, and their alignment with and excitement for the overall goals of the enterprise.
  • Client Satisfaction. A reading of its highness and sustainability, and of the business processes and disciplines in place to keep it so.
  • Market Dynamics. A reading of to what degree is the market in which the business competes conducive to success: it is large and growing (or smaller but well-protected)? Do its competitive dynamics allow for profitable client acquisition and servicing?

And as in a health physical, these green and yellow areas yield mostly “keep on keepin on” suggestions. Keep leading with ethics and enthusiasm. Keep satisfying your customers. Keep close to the pulse of your market.

3. And most importantly, the business physical identifies the red areas, those heavy matters that if not fundamentally addressed will lead to the business' demise and death.

Here the analogy would be as when a health physical so very distressingly turns up life-threatening conditions like heart disease and cancer.

Now it is in these red areas where the analogy between a business physical and a health physical needs an important clarification.

You see humans are incredibly resilient beings. We can take hard punches, stay standing and when all is said and done recover pretty darn quickly.

Businesses are more fragile - they stop breathing when the cash runs out, which can and does happen to even the strongest of companies.

This fragility is heightened by the nature of modern business competition.

Blessedly unlike the vast majority of human beings on earth every modern business has dozens, hundreds, sometimes thousands of other businesses out there relentlessly trying to
kill them!

Because of this fragility and the “only strong survive / fight to the death”nature of our modern marketplace, as business leaders we must always be super vigilant to the “existential” business threats surrounding us always.

Identifying these threats is core to a quality business physical - even to the point that if those threats are deemed too great to overcome the recommendation can be to sell or close the business.

But far more likely will come a series of recommendations and suggested tasks and projects that
can and will make things better.

Some of these will be “Business Internal” - like tending to our financial health, to our culture, to the satisfaction of our clients, to the effectiveness of our organizational processes and accountabilities.

And some will be “Business External” - like tending to the positive attributes of our brand and reputation, to the “conversion efficiency” of our marketing and sales regimes, and how we leverage these assets in toward healthy growth.

When done right, a quality business physical spits out a list of specific projects and to-dos for executives to work on right away to make things better- more profits, more assets, more overall sustainability and longevity.

I encourage all executives and business leaders of ambition, especially this time of year, to submit their companies to a thorough and complete business physical.

It is almost always transformative and revelatory in its own right, and can quickly put a business on the correct path towards improved shorter term results and longer term health and growth. 

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