A-Head for Success

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A-Z of Business: X- X-Ray Vision – Know your Business Inside Out

Business performance

Your business results don’t reflect the effort you put in. Sound familiar?

If so, you are not alone.  Indeed, some of my clients have been working so hard that they are nearing burnout.  This is often because they are focusing on the wrong thing, which they believe to be the right thing.  This is why having a forensic view of your company – x-ray vision – helps you to focus on those factors which make the biggest difference to your success.  Working smart, not working hard is the difference which makes the difference.  Productivity, not activity.

For example, if you are spending a lot of time bringing in new business but haemorrhaging customers out the back door, your efforts will be as effective as attempting to fix a burst pipe with a sticking plaster.

Or perhaps you are spending your time bringing in new business that you don’t have the infrastructure to support?  Like building a house without it’s foundations.

Maybe your customer service is poor and you are busy sending out feedback forms when really the problem is that your hiring processes and training do not enforce your company value of customer satisfaction?

Or is your business booming but your customer’s aren’t paying their invoices?  This is where success leads to ruin.

So, x-ray vision on the essentials helps you work strategically – making the right decisions about how you spend your time and your money and what will be the best strategy to take your business forward.  The first step is to get yourself some key performance indicators.  These help you to measure your performance against target on areas you consider to be important, for example:

  • Turnover
  • Profit
  • Product revenues
  • Sales growth
  • Cost of sales
  • Costs
  • Performance against budget
  • Sales conversion ratio
  • New sales by marketing method
  • ROI (see individual blog about this)
  • Revenue by customer
  • Employee satisfaction
  • Employee performance
  • Revenue by employee
  • Customer satisfaction
  • Customer complaints
  • Customer complaints resolved
  • There are also various KPIs for:
    • Social media
    • Site engine optimisation
    • Call centre performance

Lies and statistics

A lot of clients view a nice big turnover as proof of their success and they just work very hard at increasing that number.  However, a forensic examination of the statistics will let them know whether there is also a healthy profit because if the ratio of profit to turnover is low, you are working hard for little reward.  It will help you look at what is creating the biggest profit and whether you need to make a loss on something to bring in profit on something else.  This is both an art and a science.  Also, if you are producing lots of nice big invoices but not getting paid because your credit control is not effective, that turnover is meaningless.

Here are my 5 steps to help you take control of your business with x-ray vision:

  1. Consider what KPIs you want in your business (the above are just a few examples)
  2. Regularly review performance against these
  3. Look at the relationship between them
  4. Decide what is causing the positive results and do more of those
  5. Determine what is causing negative results and take remedial action.  Make sure there will not be negative consequences elsewhere.

Remember that an x-ray shows you what is wrong structurally, it is up to you to find out the cause and to take appropriate action.

If you need help with any of this – it is hard doing it for yourself – do give me a call on 0845 130 0854.  I look forward to hearing from you!

© Tricia Woolfrey 2013

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: EQ – The Difference Which Makes the Difference

Emotional Intelligence

In this A-Z of Business series, we have reached the letter Q.  Now, I could have talked about quotas, quoting or questions if I was being a purist.  But, if I look at the balance of what’s been written and what’s missing, I think that EQ (Emotional Intelligence) is far more important.  Anything which omits this key area of business success is lacking.  So I decided to break my own rule and hope that’s OK with you?

In case you haven’t come across this before you may be wondering why it’s called EQ when it refers to Emotional Intelligence (EI)?  The Q refers to “quotient” which is the amount of a specific quality or characteristic, in this case, emotional intelligence.  But, what does it mean?  It is the capacity for self-insight, for understanding and managing your emotions and having empathy for others’.  In this way you can better manage your relationships and your stress levels.

It is such an important skill that it is thought to be more important than IQ in helping to get you promoted, in creating sales and in building collaborative effort.  Research suggests that it accounts for around 90% of managerial success as opposed to IQ which only accounts for 20%.  Not that IQ is not important.  Of course, it is.  But you need both.  The ability to put your knowledge, your expertise, your skills into effect in the most  constructive way possible is said to be the difference which creates the successful business person whether you work for yourself of for an organisation.

So, ask yourself:

  • How well do you respond to setbacks?
  • How well do you understand people’s different motivations and behaviours?
  • Do you have a balanced view of your own strengths and weaknesses?
  • To what extent are you able to control your responses in situations which challenge you?
  • Are you good at building collaborative relationships?
  • Could you be described as someone who is level-headed, positive and flexible?
  • Do you inspire trust?
  • Do you manage conflict well (rather than avoid it)?
  • Are you self-motivated?
  • How good are you at bouncing back when things go wrong?

You can learn more HERE on our website.

Emotional intelligence is one of those concepts where you need a lot of it to know you have it.  So if your EQ isn’t as high as you think it is, it will almost certainly be inhibiting your progress.  To be sure what your level of EQ is, why not book an assessment?  It’s well worth it and can put you on track for success like nothing else.  Call me on 0845 130 0854.

© Tricia Woolfrey 2013

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: K – Knowledge – Your Competitive Edge?

It is estimated that 15% of success is from your technical skills whereas 85% is through gaining trust and respect.  So, what has knowledge to do with this?  Plenty, as it happens.  Knowledge covers the whole spectrum.  Good technical skills are, of course, important.  But not if the knowledge is out of date.  Technology is changing all the time – as are trends – and it is essential to keep abreast of what’s going on in your market place and in your profession.

Solicitors and doctors go through years of training in their profession before they are able to practice.  Yet, how much training have you had to run your own department, or your own business?  How much knowledge have you acquired to help you be successful?  Whether you are running a department or a business of your own, the knowledge you need to be effective is extremely broad and most people simply muddle through.  In the meantime, what happens to the trust and respect essential to 85% of your success?

The following table helps you to understand some of the fundamentals for trust and respect and the kind of knowledge you need for them:

TRUST AND RESPECT KNOW-HOW
Good people and rapport skills Influencing and leadership
Doing what you say you will do Planning and organising
Doing an excellent job Technical and delegation
Managing complaints effectively Problem solving and conflict management
Meeting your obligations Business acumen and resource management
Emotional intelligence Understanding of people and yourself and how to manage yourself and your relationships in times of stress

 

 

 

 

 

 

 

 

Business knowledge – such as sales, marketing, finance, operations –  is important whether you run your own business or manage a department as you need to see how everything fits together.  These will help you to exploit strengths, minimise weaknesses, seize opportunities and handle threats from a point of strength.

So, how can you increase your knowledge?  Through coaching, training, reflective learning and study.  Often, you don’t know what you don’t know (in the case of business, ignorance is not bliss) and it is helpful to have someone there who can help you see your blind-spot. Having your own coach and mentor is an excellent step to take to help you stay on top of your game.  For more information call 0845 130 0854 for a no obligation chat.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: I – Influencing Skills

The ability to positively influence others with integrity is a key skill in business.  It affects your ability to have people buy into you, your business, your product and your ideas.  It impacts your leadership style and your ability to build constructive relationships.  It can also be incredibly stressful if you are unable to influence people constructively, impacting your productivity, your sales and even your profitability.

Influence is about your ability to have a positive effect on someone.  It differs from manipulation in that it is undertaken with integrity and regard to the interest of the other party.   It’s about having people buy in to your ideas and perspectives, so that they say ‘yes’ to you more.

 

The talent for influence requires flexibility in style, clarity of outcome, the ability to understand a situation from several perspectives, and creating and maintaining a resourceful state, particularly during times of conflict, or when the stakes are high.

It is not about imposing but inspiring someone to take a particular action, while maintaining strong rapport and building positive relationships.

There are numerous language patterns which enhance your capacity to increase your powers of influence which are too numerous to go into in this short article but which I teach to many of my clients and which I include on my Influencing Skills training course.  The issue, though, is not what the skills are, but the effect that they can have on your success.  They can help you deal with objections and concerns so that you are able to transform potentially negative situations elegantly. It’s the YES factor!

 

Whether your intention is to create change, elicit support or diffuse potentially contentious situations, influencing skills can be a real boon to you in your business.

For further details, please contact Tricia Woolfrey on 0845 130 0854 or see www.pw-consulting.co.uk.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: H – Health – How Can Your Business Be Healthy If You’re Not?

 

To succeed in business you need to be firing on all cylinders.  In fact, you could say that the health of your business is a reflection of your own health.  If you are tired all the time, or run down with frequent bouts of colds and flu, suffer frequent headaches or if you are at the mercy of IBS, can you really be functioning at your best?

Health is more than just an absence of symptoms.  When you are healthy in every sense of the word (physically and emotionally), you will have more stamina and energy to deal with the stressors of business life; mentally you will have clarity of thought and direction, the ability to solve problems quickly and your memory will be more reliable; you will feel more motivated and less irritable; health will also mean that your immune system is strong to safeguard you from colds and flu as well as more serious illnesses.

If you’re feeling tired-all-the-time, or low motivation, it could well be as a result of your body needing to be stronger and healthier.

Your health can be affected by many factors including:

  • Food choices
  • Depleted nutrition in foods
  • Cellular health
  • Alcohol
  • Sugar
  • Cigarettes
  • Stress
  • Negative emotions
  • Environment
  • Lack of exercise

Taking care of yourself is taking care of business. We take great care of our cars:  fill them with petrol, make sure there is enough oil and water, take them for a regular MOT, but are you doing this for yourself?  For a health MOT, call 0845 130 0854.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: F – Finance – 5 Tips to Help Your Business Succeed

 

1.  Cash is King

Cash flow is the main reason for business succeeding or failing.  An apparently successful business may have a full order book, and even good levels of projected profit, but if funds cannot be collected from customers in a reasonable timescale the business will fail.  You should ensure your customers are aware of your payment terms before carrying out tasks and where possible advanced payments, should be requested.

Tip – Get paid on time by ensuring you have regular communication with your customer and that you have an effective credit control procedure.

 

2.  Overtrading

This is where a business has a full order book but struggles to convert turnover (sales) into profit.  This situation usually develops when tasks are taken on at a cheaper rate when compared to competitors in order to secure orders.  Subsequently, the business becomes very busy but the income generated is not sufficient in order make a profit, and so the business fails.  This strategy can be used carefully in order to try and build a reputation but for small businesses it should not be used in the long-term.  Remember “turnover is vanity, but profit is sanity”.

Tip – You are usually in business to make money so ensure you do not under-sell your products or services unless you have a clearly defined plan.

3.  Control the Controllable

Fixed costs – these costs do not vary regardless of the business activity undertaken, i.e. rent and rates.

Variable costs – these are dependant on the level of activity, i.e. heat and light or staff overtime.

Tight control and effective monitoring of these costs is essential.  Whilst fixed costs by their very nature are easier to control, effective negotiation with suppliers is an important step.  Variable costs can often get out of control if not properly managed, i.e. buying stock recklessly can tie up cash and may lead to unforeseen losses.

Tip – Ensure there is an efficient method of recording  and managing costs.  Monitor them on a regular basis.

4.  Supplier Relationships

Negotiating with your suppliers is important in order to gain value for money but when evaluating a potential supplier do not focus solely on the costs.  You should try and build a close working relationship with your suppliers and also consider the following:

  1. Product efficiency – do they have a good reputation for supplying reliable products?
  2. Delivery – can delivery be made in a timely manner?
  3. Payment Terms – extended terms can often ease your own cash flow concerns.

Tip – Ensure you question potential suppliers to ensure they meet your key criteria.

5.  Initial Funding

Many small businesses often underestimate the amount of necessary funding needed to commence trading or start a new product line or service.  This lack of funding will immediately restrict any business capacity and will greatly threaten the potential growth and stability of your business.  Always identify and try to properly estimate the amount of money needed to launch your business and to cover the costs for at least the first year which should include both running expenses and capital investment.

Tip – Take time to plan the financial implications of your business plans.

With thanks to:

Colin Bentall FCCA
Ford Bentall LLP
www.fordbentall.co.uk

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A-Z of Business: E – Employees: The Ten Fundamentals for Motivated and Productive Staff

Employees can make or break your business.  Finding the right ones, putting them in the right roles and keeping them motivated can feel like a full time job in itself.  Making poor hiring decisions and mismanaging your employees is alarmingly expensive, and can influence the morale of the rest of your team, as well as having a detrimental impact on your business and your time.  Here are my ten fundamentals to get you started:

  1. When hiring, be clear about the skills, knowledge, attitudes and motivations you want from the individual.  If they don’t have the right attitude, no matter how skilful a leader you are, keeping them focussed, productive and positive will be a drain on your energy, your team and your business.
  2. Being clear about what motivates an individual helps you match them to your vacancy.  An extrovert will not thrive in an isolated role; a big thinker will make expensive errors in a job requiring lots of detail work.  Their motivation will drop quicker than you can say “job satisfaction”.
  3. An effective interview process ensures that you treat every applicant equally, you leave no stone unturned and that you are making a balanced business decision, rather than reacting to their charm at interview.  Charm over substance is never a good hiring strategy.  In addition, many hiring decisions are based on urgent need – consequences are not considered until they are experienced in glorious and painful high definition.
  4. Make sure you involve the right people in your interview process.  Having input and feedback from people who will be working with the new recruit is invaluable – not just to have a second opinion, but also to make sure they buy into the hiring decision.
  5. A comprehensive induction process will make sure your new hire gets up to speed and feels part of the company as quickly as possible.  Things to consider are:  computer, phone and desk (yes, some people forget to plan these for new recruits!); meeting work colleagues, other departments, learning about the company, it’s products, values, processes and procedures, what to do and where to go if there are any problems.
  6. Make sure your new recruit is pre-announced to the rest of the team so they are expecting them and can extend a warm welcome.  I have seen new-hires feel shunned because their team-members were not expecting them and didn’t understand the reason for them joining.
  7. Have regular 1:1s to discuss progress, plans and projects.  It is also a good time to discuss any concerns they have and, do please make sure you take action promised – it can be very demoralising otherwise.  1:1s, well run, are hugely motivational and can be a great way of increasing confidence, productivity and motivation.
  8. Delegate well.  To do this, you need to understand the skillset and motivation levels of each individual member of your team.  Some people need a lot of support and direction, others will require more autonomy.  Delegation is not about abdication, nor does it involve micro-management.  It’s about giving them what they need to perform well.  This is a complex and important area that could benefit from a several blogs in its own right.
  9. Know when to take remedial action.  A disciplinary – formal or otherwise – is about improvement.  Inaction can make a bad problem worse as the employee believes that poor performance is acceptable.  Worse, fellow-employees may also see that this is the new standard they can relax into.  Worse still, if you decide to dismiss someone after a period of inaction, it may be difficult to prove your case in a tribunal.  Dealing with problems as they arise is essential.
  10. Develop your individuals.  You need to develop them in the right way, in the right things.  You can develop them through training, coaching, increased responsibility, new projects, and secondments.

Hiring and managing employees is highly rewarding when done well.  It is, however, a minefield.  If you are even slightly concerned, or are not getting the results you want, do seek support.  With the right structures and skills in place, you can experience the rewards on several levels:  a better relationship with your staff, an empowered and motivated workforce, happier customers, greater profit and a reputation as being an employer of choice.

To your success.

Tricia Woolfrey

PS For help with hiring the right people and effective people management and development call 0845 130 0854.  This is not something you want to leave to chance.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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