Pythagoras, the Greek mathematician, wrote about the personality of numbers, and claimed to have learned about it from the Egyptians. Mystical qualities have been associated with numbers from ancient times, and the number “3” has a particular fascination. The three primary colors of red, blue, and yellow can be combined to produce all other colors, including white.
The triad or trinity is a symbol of the unity of body, mind and spirit, and it is found throughout the world and history. The triangle is associated with the divine number of three, it is a symbol for power, and it also represents success, prosperity, and safety. The two interlaced triangles known as King Solomon’s seal, or more commonly as the Star of David, is called in India the seal of Vishnu. It signifies the bipolarity in nature of spirit and matter. The upward triangle represents spirit, consciousness, and concealed wisdom, while the mirrored downward pointing triangle represents matter, manifestation, or wisdom revealed.
What would happen if you could harness the number “3” to realize greater success and prosperity in your business? Now imagine your business developing to a point where you eventually had no weaknesses, and your combined strengths in each of the seven dimensions would allow you to minimize any challenges and aggressively take advantage of every opportunity available to your business so you could realize continuous breakthroughs in productivity, performance, and profits?
That’s what your 3/3/33 solution can do for you. You complete this exercise by simply stating your biggest challenge in a sentence that you and others can focus their thoughts on, and then brainstorm all the possible ideas you can think of to meet the challenge. From that list, choose the top 3 solutions, that when accomplished in 3 months would result in at least a 33 percent improvement.
The good news is that it’s not necessary to take massive action each day to achieve massive results – although it may take a lot of effort to get the momentum moving in the beginning. In order to realize the 33 percent improvement in the next 90 days, you only need to improve 0.33 percent each day. Is it possible for you to improve your productivity, performance, or profitability by 1/300th in a 24-hour period?
If you planned your day to accomplish this improvement, you could increase your results much more than 1/3 of 1 percent – probably more like 33 percent in a single day if you really focused your efforts. This would get you off to a great start, but it would be difficult to sustain over a longer period of time; therefore, it’s scaled down to an average daily 1/300th improvement.
By setting an easy-to-reach goal each day, and aiming to be consistent in your results over time, you should reap the 33 percent target within 3 months. By continuing at this pace, the compounding effects will double your results by the end of the third quarter, and it will produce three times more than where you started 12 months earlier!
For example, if you had a starting profit of $100,000 and you increased by 33 percent the first quarter, you would end up with $133,000. As your improvements compounded, the second quarter would yield $176,890 in profits; third quarter $235,264; and by the end of the year your profit would be $312,900. If you could continue that pace you could almost add another zero to your bottom line by the end of the second year, as compared to your starting profits, and after three years, an incredible 3,064 percent or 30 times more!
This may seem unbelievable, and if you continue to operate your business as you’ve always done, it may very well be impossible. However, by thinking outside the box and setting up the proper strategy, systems and support to think and act much bigger, you could realize jumps in profitability, productivity, and performance that were once unimagined. In last weeks article, you learned how it could be possible to achieve a 33 percent profit improvement with as little as a 1 percent improvement in five areas of your business.
Even if you cut the improvement by one-third to a consistent 10 percent per quarter improvement in profits (which is about 3 percent compounded per month), you would more than double your profits within two years and triple it by the end of the third year.
Applying the principle of continuous and never-ending improvement in one dimension of your business will also lead to improvements in your other dimensions. For example, as you constantly aim to improve the service you offer to your customes, it will increase the number of referrals and sales you enjoy. As you consistently get better in some areas, it will lead to growth in other areas also.
Completing the 3/3/33 solution will help you realize the potential your business has to grow beyond what you might have imagined. This is the step that separates the leaders from just the readers. The power of “3” will allow you to gain more control of the future of your business and all that it can do for you, your employees and your customers. So, what are the top 3 things you can do in the next 3 months to produce a 33 percent improvement?
Wednesday, October 19, 2011
The 100-Day Challenge: Grow 100% in 100 Days
About three months ago, I started compiling some of my best articles into a book called “Your BizGrowth Challenge: Solutions to Move Your Business to the Next Level of Growth.” It includes numerous stories of how businesses have overcome challenges, and the book uses the 7 Strategic Dimensions of every organization as a framework. Each of the stories and concepts are designed to help you and your staff to discover solutions to specific challenges in each of the dimensions and realize massive breakthroughs, as well as incremental improvements.
The 7 Strategic Dimensions identifies important areas to maintain a balanced business, and they include: 1) How to remain innovative and plan for growth, 2) train employees and offer opportunities for professional development, 3) develop systems for smooth operations, 4) manage stakeholder relationships, 5) identify appealing products and develop effective marketing strategies, 6) choose measurable metrics, and manage costs, and 7) develop a customer-focused culture that creates loyal customers and dedicated employees. In the end; however, the results of all those activities must produce a profit on the bottom line so your business can continue to grow and remain viable.
To prove the viability of the concepts, I am issuing a challenge to invite a few businesses to participate in what I’m calling the 100% BizGrowth Challenge. The goal of this challenge is to grow participating businesses by 100% in sales or profits in 100 days. Many of the principles have been proven in the field with clients I’ve worked with over the last 20 years, but I haven’t combined all of them into a comprehensive program that specifically identifies the greatest opportunities for growth and creates a plan to achieve rapid growth.
This may sound ambitious, especially in this economic climate; however, let me demonstrate how small changes in just a few key areas could dramatically change your bottom line. If a business is operating with a 10% return on sales, you only need to improve 3% in the next 100 days in 5 key areas to double your profits.
Let me go through this step-by-step to demonstrate how this can be accomplished in the five areas. If you have: 1) 2,000 prospects who visit your business in a month (about 70/day), and 2) 50% of them become customers (1,000), 3) who make an average purchase of $100, and 4) return to your business 10 times in a period of time, your sales would be $1,000,000; 5) subtracting variable costs (VC) of 50% and $400,000 in fixed costs (FC) would produce $100,000 (I’ll leave taxes out to simplify the example).
A 3% improvement in just one area, the average purchase amount ($103), will increase your sales by 3% to $1,030,000, without doing anything else in the other areas. When you subtract your variable costs (VC) of 50% of gross sales, and $400,000 in fixed costs (FC), the result is a 15% increase in profit. The percentage will be more or less depending on your profit margin. The main point is that it doesn’t take much to increase your profits with minor improvement in just one of the three areas. How difficult is it for you to increase the average purchase amount by just 3%? You can provide better customer service, offer an extended warranty, up-sell, bundle products together, offer a deluxe alternative, or dozens of other methods.
Let’s look at what happens if you follow a plan, that you’ll follow as part of the 100% BizGrowth Challenge, to improve in all five areas by just 3%. These aren’t huge jumps in the number of new customers, their average purchase amount, or the number of times that they return. Your sales would increase by 15.8%. In addition, if you make a 3% improvement in your variable costs by examining all the waste and inefficiencies within your business, this would produce an additional $113,894 to the bottom line. The combined results in this example would more than double your profits. My goal is to help you realize at least a 3 to 6% improvement in each of the areas in the next 100 days, and much larger jumps in some of the areas by implementing a strategy and following-through on a plan that is tailored to your business.
To break this down to the ridiculous, the plan requires you to just realize a 1 to 2% improvement per month in five key areas, and I’ll show you how it can easily be achieved if you know what to work on. Again, the results you’ll realize will be different because of the differing variable but it illustrates how incremental improvements can compound over time in key areas to produce impressive results.
The 7 Strategic Dimensions identifies important areas to maintain a balanced business, and they include: 1) How to remain innovative and plan for growth, 2) train employees and offer opportunities for professional development, 3) develop systems for smooth operations, 4) manage stakeholder relationships, 5) identify appealing products and develop effective marketing strategies, 6) choose measurable metrics, and manage costs, and 7) develop a customer-focused culture that creates loyal customers and dedicated employees. In the end; however, the results of all those activities must produce a profit on the bottom line so your business can continue to grow and remain viable.
To prove the viability of the concepts, I am issuing a challenge to invite a few businesses to participate in what I’m calling the 100% BizGrowth Challenge. The goal of this challenge is to grow participating businesses by 100% in sales or profits in 100 days. Many of the principles have been proven in the field with clients I’ve worked with over the last 20 years, but I haven’t combined all of them into a comprehensive program that specifically identifies the greatest opportunities for growth and creates a plan to achieve rapid growth.
This may sound ambitious, especially in this economic climate; however, let me demonstrate how small changes in just a few key areas could dramatically change your bottom line. If a business is operating with a 10% return on sales, you only need to improve 3% in the next 100 days in 5 key areas to double your profits.
Let me go through this step-by-step to demonstrate how this can be accomplished in the five areas. If you have: 1) 2,000 prospects who visit your business in a month (about 70/day), and 2) 50% of them become customers (1,000), 3) who make an average purchase of $100, and 4) return to your business 10 times in a period of time, your sales would be $1,000,000; 5) subtracting variable costs (VC) of 50% and $400,000 in fixed costs (FC) would produce $100,000 (I’ll leave taxes out to simplify the example).
A 3% improvement in just one area, the average purchase amount ($103), will increase your sales by 3% to $1,030,000, without doing anything else in the other areas. When you subtract your variable costs (VC) of 50% of gross sales, and $400,000 in fixed costs (FC), the result is a 15% increase in profit. The percentage will be more or less depending on your profit margin. The main point is that it doesn’t take much to increase your profits with minor improvement in just one of the three areas. How difficult is it for you to increase the average purchase amount by just 3%? You can provide better customer service, offer an extended warranty, up-sell, bundle products together, offer a deluxe alternative, or dozens of other methods.
Let’s look at what happens if you follow a plan, that you’ll follow as part of the 100% BizGrowth Challenge, to improve in all five areas by just 3%. These aren’t huge jumps in the number of new customers, their average purchase amount, or the number of times that they return. Your sales would increase by 15.8%. In addition, if you make a 3% improvement in your variable costs by examining all the waste and inefficiencies within your business, this would produce an additional $113,894 to the bottom line. The combined results in this example would more than double your profits. My goal is to help you realize at least a 3 to 6% improvement in each of the areas in the next 100 days, and much larger jumps in some of the areas by implementing a strategy and following-through on a plan that is tailored to your business.
To break this down to the ridiculous, the plan requires you to just realize a 1 to 2% improvement per month in five key areas, and I’ll show you how it can easily be achieved if you know what to work on. Again, the results you’ll realize will be different because of the differing variable but it illustrates how incremental improvements can compound over time in key areas to produce impressive results.
Tuesday, October 4, 2011
Reconnecting with Key Stakeholders
It’s easy to focus on the immediate stakeholders of your business, such as your customers and employees, and ensure that their needs are being met. However, there are some stakeholders that tend to be neglected because they don’t appear to be as important or don’t bring attention to themselves. This is a common mistake made by many business owners, but it can come around to bite them in the future. If those relationships deteriorate, it becomes essential to rebuild them and repair the damage that might have been done. But just like any other relationship, it is often more costly in time and resources than just taking the time to maintain those associations in the first place.
I had the challenge of mending broken stakeholder relationships over ten years ago when the Small Business Development Center (SBDC) was under Northern Marianas College. The college was undergoing budget constraints and evaluating which programs should be cut, and the SBDC was on the chopping block. This was because the former director had treated it as an autonomous organization, neglecting the link it had with the college, and therefore the relationship with college personnel deteriorated. At the same time the Center was being pushed away from the college, it was also being pulled by another agency to move the Center under the Commonwealth Development Authority, and in all likelihood, the move was going to happen.
With the position vacant, I was asked to apply for the director’s position in order to help unite the college community with the Center. I was the faculty senate president at the time and worked closely with upper management. When I was hired, my first task was to align the SBDC with the college and demonstrate the vital link it had with the mission and goals of the institution. This was accomplished by creating a strategic plan and creating programs that would immediately benefit the community and reinforce the value we provided to local businesses.
Ironically, the Center had helped numerous business owners develop mission statements and business plans, yet it did not have a plan or a statement of its mission. I worked with the other consultants to create a comprehensive plan that would tie our efforts with the college and community. My purpose was to have a written document outlining how we intended to accomplish certain actions that would create a stronger role with our stakeholder relationships. After several weeks, the plan was finished, presented to the Board of Regents, and given their endorsement.
The next step was to implement the plan. All the consultants worked to develop a six-week program called Business Plan for Success, with the goal to break the planning process into six weekly steps. Each session was taught by the consultants using computers so participants could immediately start working on their business plan. The outcome would be a workable business plan that could serve as the map for growth and success, or to attract capital. We also looked at other programs already scheduled and determined how we could make them more effective.
The end result is that we saved the Center and it remained under the college where it would continue to serve the needs of hundreds of entrepreneurs and established businesses. We were able to strengthen the ties with the college, provide beneficial programs for the community, and continue to work with lending sources and other partners to benefit entrepreneurs. This continued for many years until ongoing budget constraints over the years eventually made the Department of Commerce a more logical home for the Center.
One stakeholder that is often ignored is the government. They definitely have a stake in the success of your business through the collection of taxes and fees. They can either be an advocate or adversary for your business depending on the relationship you’ve developed with local politicians. There are numerous instances when the owner of an organization supported the losing candidate and the consequences were dire.
All healthy relationships rely on open communication, trust, and a willingness to work together to find solutions to a disagreement. Make a list of all your stakeholders and develop a plan to maintain strong ties or reconnect with your key stakeholders.
I had the challenge of mending broken stakeholder relationships over ten years ago when the Small Business Development Center (SBDC) was under Northern Marianas College. The college was undergoing budget constraints and evaluating which programs should be cut, and the SBDC was on the chopping block. This was because the former director had treated it as an autonomous organization, neglecting the link it had with the college, and therefore the relationship with college personnel deteriorated. At the same time the Center was being pushed away from the college, it was also being pulled by another agency to move the Center under the Commonwealth Development Authority, and in all likelihood, the move was going to happen.
With the position vacant, I was asked to apply for the director’s position in order to help unite the college community with the Center. I was the faculty senate president at the time and worked closely with upper management. When I was hired, my first task was to align the SBDC with the college and demonstrate the vital link it had with the mission and goals of the institution. This was accomplished by creating a strategic plan and creating programs that would immediately benefit the community and reinforce the value we provided to local businesses.
Ironically, the Center had helped numerous business owners develop mission statements and business plans, yet it did not have a plan or a statement of its mission. I worked with the other consultants to create a comprehensive plan that would tie our efforts with the college and community. My purpose was to have a written document outlining how we intended to accomplish certain actions that would create a stronger role with our stakeholder relationships. After several weeks, the plan was finished, presented to the Board of Regents, and given their endorsement.
The next step was to implement the plan. All the consultants worked to develop a six-week program called Business Plan for Success, with the goal to break the planning process into six weekly steps. Each session was taught by the consultants using computers so participants could immediately start working on their business plan. The outcome would be a workable business plan that could serve as the map for growth and success, or to attract capital. We also looked at other programs already scheduled and determined how we could make them more effective.
The end result is that we saved the Center and it remained under the college where it would continue to serve the needs of hundreds of entrepreneurs and established businesses. We were able to strengthen the ties with the college, provide beneficial programs for the community, and continue to work with lending sources and other partners to benefit entrepreneurs. This continued for many years until ongoing budget constraints over the years eventually made the Department of Commerce a more logical home for the Center.
One stakeholder that is often ignored is the government. They definitely have a stake in the success of your business through the collection of taxes and fees. They can either be an advocate or adversary for your business depending on the relationship you’ve developed with local politicians. There are numerous instances when the owner of an organization supported the losing candidate and the consequences were dire.
All healthy relationships rely on open communication, trust, and a willingness to work together to find solutions to a disagreement. Make a list of all your stakeholders and develop a plan to maintain strong ties or reconnect with your key stakeholders.
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