BASIC INSTINCT
The longer I work with businesses, the more convinced I become that success is often achieved by simply adhering to the basics. True competitive advantage in a service industry is more likely to be gained by doing the basics better than your competitors than constantly striving for the next big thing.
But why is this advice so easily forgotten, just when we need it most? I believe this is because today's conditions of turbulence and change make it easy for us to forget these simple rules. As the pace of change increases, it is easy to take our eye off the ball and get caught up in the apparent need to plot ever more complicated strategies to meet the new challenges we face. In this article, I would like to revisit some of these business basics and explore how you can employ them to maximum advantage.
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First, have a plan. It amazes me how often businesses of quite substantial size have no clear vision or specific goals to pursue. They may be able to articulate a vague direction for the business, perhaps to become more profitable or to be the biggest IFA in their area. However, when inquired "How much profit?" or "Biggest in what terms?", it becomes apparent that these are, at best, wishes.
A clear, well-defined purpose and set of objectives are essential to determine direction and leadership and are the benchmarks against which all a company's activities and decisions can be judged. So often I see the absence of clearly articulated medium or long-term strategic objectives as the reason why business owners struggle to make short-term tactical decisions.
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Second, allocate sufficient time for reviewing your plan on a regular basis – monthly at least – to monitor progress. You would never dream of setting out on a journey to some new destination without checking the map at regular intervals, so why take that risk with your business? Book this time as if it was an appointment with your most important client. It is easy to get sidetracked into fire-fighting and never have time to deal with the issues that cause a lot of problems.
Make an objective analysis of your activities and inquire: "Is this moving me closer to achieving my objectives?" A typical failure is the temptation to take speculative or lower-producing client meetings. You may have seven meetings a week, two of which typically yield nothing while others yield between £100 and £500. Invest time in robust client management system and replace these unproductive meetings with more profitable ones.
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Another good tip is to take a good look at your business from a client perspective. Break down your activities and ask yourself: "Is this activity adding real value to my clients, such that they would pay for it if given the choice?" If it does not add value, stop doing it. If it adds value but is not currently profitable, see if the process can be simplified or the cost reduced. If you cannot make it profitable, look at the price you charge and decide whether the client would pay a higher price or fee. If you are not sure, ask your clients.
A robust management information system is one of the most essential basics. Without one, you are not really in control of your business and any decisions you make are likely to be based on symptomatic or flawed data. Failure to accurately measure how long it takes people within your business to do certain tasks for certain clients can cause unprofitable decisions around client activity.
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