Recently I’ve been out visiting and interviewing lots of small businesses and discovered something truly remarkable.
YOU determine your results! – so stop blaming the economy, your staff or even your location.
The turnover and profitability of any business is mostly related to just ONE THING – the behaviour of the owner! It turns out that the way you behave determines the quality of the team you get, the customer service levels you deliver and how much eventual PROFIT you make.
This profit then determines most of the value of your business and how easy it will be to sell in future. There are many buyers for large profitable businesses but few buyers for smaller unprofitable ones. You can get around 3x to 5x EBITDA (profit + addbacks) for a managed modern style business. Did you know that if you increase your profit by $100k p.a. the value of your business can go up by around $300k to $500k?
Most smaller businesses range in turnover from around $0.5mto over $3m. YOU (the leader) determine whether your turnover grows or declines over time. The bigger SMEs and multi-business groups are run by owners that had built a great team, were systemised & organised and focussed on their sales & financial results. The businesses that struggled financially were run by overwhelmed owners, clueless and cranky staff and the working environment was untidy.
The great news is that a 10% shift in your mindset (what you think and do) can improve your sales turnover by 10% and double your profitability. Every team is a reflection of the mindset of the leader and the sales results are a reflection of that team.
Here are some of the success traits of the great business operators:
Teambuilder – Willing to spend time finding, inspiring and keeping the best staff
Organised – Following an agreed system or set of processes, house rules and team discipline
Disciplined and Fair – upholding the agreed standards, rules & guidelines
Positive & optimistic – Grateful, friendly and appreciative (not a complaining bag of misery)
Planning for the future – Focussed on clear objectives and goals – daily, weekly, monthly
In my book The VIP principle (www.thevipp.com) , we introduced the concept of Rabbit and Tortoise Leaders. So what sort of LEADER are you? – Are you a run-around Rabbit or a wise Tortoise?
At many businesses I have visited it was clear that the owner was a run-around Rabbit – busy, busy, busy running around the place – a hands-on DIY type of guy – trying to be involved and overseeing every job. Desperately needing some better staff but not much time to recruit, train or manage them well. Rabbits also complained of no time to look at the financials, do the marketing or take some time off. Tough gig and potential divorce –
As TV Doctor Phil is fond of saying – “How’s that working for you?”
Tortoises on the other hand, take the time to find the best people, use lots of processes and spent time coaching and training the team. They learned to delegate and trust their staff to follow their rules and systems – The follow the Way for an Easier life & Happy spouse!
Any Rabbits that do manage to expand to multi-location operations without good systems or processes in place are usually back to running just one location real quick – with their tale between their legs. It really is a case of learning how to build a trusted team and learning to recruit, train and delegate.
At the most profitable businesses and most well-run multi-store operations, the owner took time to be a wise tortoise, working on the business NOT in the business. The place was well presented, the staff were working hard and it was well organised. Many also had a business coach, knew their financial numbers coach and took long overseas holidays.
So it’s really all about YOU – your attitude, belief, confidence, discipline, energy, focus and goals.
Stop eating the BREAD (Blame, Reasons, Excuses, Attitude and Denial) – just take the ROAD to success in your store – Responsibility, Ownership, Accountability and Decisiveness.
If you want some more ideas or a chat with Dave send an email to firstname.lastname@example.org or phone 0408375100.