No business runs smoothly all the time. And I think that all businesses can continually be improved.
So, you might ask, how can you improve a poor business, and how can you continue to improve it over time.
The answer in my opinion is pretty simple. That is, if you use the system I've adopted and used over the past few years.
The system is very straightforward: take the business or business process you are trying to improve, map it out on a piece of paper, and then, for each process, figure out 1) what you are doing, 2) what you are tracking, and 3) ideas for improvement.
Let me give you an example. Let's say your firm provides accounting services for small businesses. Your big challenge is increasing revenues and profits, which is generally going to be comprised of three smaller challenges:
1. Getting more clients
2. Fully satisfying those clients
3. Getting clients to buy more from you
So, how does your accounting firm achieve this goal of increasing revenues and profits? As stated above, step 1 is to map out your processes on a piece of paper.
I can see at least four processes in play here:
1. Lead sourcing: how your accounting firm gets new leads
2. Lead conversion: how your firm coverts these leads into prospects (more on the difference between "leads" and "prospects" later)
3. Prospect Development & Closing: how your firm converts prospects into clients
4. Fulfillment & Upselling: how your firm completes client work and upsells them on additional work they need
The next step is, for each of the four processes, to figure out what you are doing, what you are tracking, and ideas for improvement.
Let's start with the first process, lead sourcing. Lead sourcing here is defined as getting an individual to contact you (either via telephone, email, visiting your website, etc.) because they have a possible interest in working with you.
Your current list of "what you are doing" may include:
- Getting referrals from customers
- Getting referrals from partners
- Newspaper advertising
Your current list of "what you are tracking" may include:
- How many leads you are getting each month
And your "ideas for improvement" may include:
- Trying new forms of promotions such as radio advertising, social media marketing and direct mail
- Improving your customer referral program by offering rewards
- Better tracking lead sources and which leads convert so you know which lead sources generate the most customers
Here's the punch line (I'll complete the process below, but I want you to understand the end result here), by breaking up and scrutinizing all the specific processes involved in the whole system, you will identify ways to massively improve performance.
Let's move on to the second process, lead conversion. "Lead Conversion" is the process of converting an individual from a "lead" (someone who has gone to your website and/or called you) to a "prospect" (someone who has shown a more serious intent of buying from you).
Your current list of "what you are doing" may include:
- Fielding phone calls and emails from leads
- Routing them to your best salespeople
Your current list of "what you are tracking" may include:
- How many calls and emails you receive each month
- How many calls and emails become clients
And your "ideas for improvement" may include:
- Developing a better telephone script to use when handling incoming phone inquiries
- Outsourcing incoming phone calls during off hours so leads can reach you 24/7
- Improving the time delay from when the receptionist speaks to the lead and the lead speaks to your salesperson
- Identifying which salespeople perform best with which types of leads and routing accordingly
The third process to improve is "Prospect Development & Closing" or how your firm converts prospects into clients.
Your current list of "what you are doing" may include:
- Conducting initial needs analysis calls with prospects
- Preparing price proposals
Your current list of "what you are tracking" may include:
- How many proposals you give each month
- What percentage of proposals become clients
And your "ideas for improvement" may include:
- Better training your sales people
- Finding better sales people
- Creating better sales scripts
- Improving the quality of proposal documents
- Better follow-up on prospects who initially reject proposals
The fourth and final process to improve is "Fulfillment & Upselling" or how your firm completes client work and upsells them on additional work they need.
Your current list of "what you are doing" may include:
- Face to face meetings and calls
- Preparation of key deliverables sent via email and messenger
Your current list of "what you are tracking" may include:
- How satisfied your clients are
- Number/percentage of clients who re-purchase the same service over time
- Number/percentage of clients who purchase additional services from you
And your ideas for "improvement" may include:
- Have additional points of interaction with clients (e.g., extra meetings; video chat conversations) to build more rapport during engagements
- Bring in a senior manager into all engagements to check work and provide additional insight to better satisfy clients
- Create formal processes that require your staff to ask for referrals, testimonials and additional work opportunities during client engagements
- Adding additional tracking to learn which staff members get the most referrals, testimonials and additional work opportunities
To reiterate, by breaking up any process into smaller pieces and then scrutinizing each of the smaller pieces, it's simple to come up with TONS of ideas for improvement. You will also identify new processes to add which further boost your profits and competitive advantage.
In fact, the problem quickly switches to an implementation issue which is: "how do I start implementing all of the great ideas I came up with."
Here I suggest putting all of the ideas, along with their category (which process they relate to) into an Excel spreadsheet. In a column next to each idea, rank the idea from "1" to "5" with "1" being an idea that can make the most significant and immediate impact on your bottom line, and "5" being ideas that will take longer to implement and/or may not impact your bottom line as much.
Then, sort the ideas by rank. Finally, create a Gantt chart showing which ideas you will start implementing first, next and then last.
By following this systematize approach, you can improve anything. It's real work, but it's relatively fun, and it always leads to success!