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The Cycle of Business

Business Coaching Article | Ten Principles of LeadershipSuppose you called your business tomorrow morning and said, “Hi. I’ve got a really amazing opportunity that has just come up and it will take me out of the country for six months. It’s going to difficult to keep in touch during that time. So, keep up the good work and I’ll see you when I get back.”

Could you leave your business in the care of your team for six months and know it will be performing at least as well as it is now?If your answer is, “no way…the company would be bankrupt when I get back,” then you really don’t have a business…you have a job.

Our definition of a business is, “a commercial profitable enterprise that works without you.”

So … do you have a business or a job? The issue for you, as a business owner, is not whether you will leave your business for one day, one week, one month or even one year without disrupting its profitable growth.

The issue is knowing you can.

That gives you options. And, consider the benefit that having options provides you and your family.<br /><br />Using the ActionCOACH formula of &ldquo;Six Steps to Building a Better Business,&rdquo; you can create the options you dreamed about when you started your business. By learning to build a solid foundation; generate consistent cashflow by having and exploiting a niche; leveraging through people, systems, marketing and money; developing and recruiting a great team; aligning all of those elements together; and, finally, accomplishing results you want &ndash; business becomes a means to an end, rather than the end itself.</p>

<p>So, ask the question, &ldquo;Am I really achieving the results I want in my business&rdquo;?&nbsp;<br />If not, why not?&nbsp; <br /><br />Then explore how business coaching may be the step you need to take your business to the next level.<br /><br /><br /><strong>Team</strong></p>
<p><br />Most people operate under the belief that the customer should always come first. <br /><br />But sometimes, more success stems from the belief that employees come first. <br /><br />&ldquo;When you treat your employees well, you demonstrate how to treat others,&rdquo; ActionCOACH ((COACH)) says. &ldquo;And team learn by your example how people should be dealt with.&nbsp; This idea follows the &lsquo;trickle-down&rsquo; theory:&nbsp; How you respond to and work with one group impacts how they work with others.&rdquo;<br /><br />In other words, when your employees are happy, your customers will be as well. <br /><br />The best way to get a good reputation for excellent customer service is to provide an excellent, supportive and positive work environment for your people. After all, the company is the people who work there.&nbsp; And, happy employees work together better, are more motivated and productive.<br /><br />&ldquo;I had a perfect example a while ago,&rdquo; ((COACH)) says. &ldquo;I was thinking about buying a new car and went to the local dealer.&nbsp; The salesmen, Bill, spoke to me for a while, going over the car’s benefits and details.&nbsp; Then, he took me out for the test drive.&nbsp; While driving, I asked him what he thought of the dealership. <br /><br />Bill’s smile widened as he began filling me in on how much he liked his current job.&nbsp; It was a lot different than other car dealers where he had worked previously.&nbsp; The dealership was very good to their people, recognizing and rewarding the staff and clearly communicating with everyone involved.&nbsp; Bill said that it was a wonderful place to work.<br /><br />&ldquo;This explained a lot to me because Bill was an excellent good sales person who treated me right, was friendly, knowledgeable and helpful.&nbsp; Bill did his job well, but was also a pleasure to work with.&nbsp; Excellent service came easily to Bill because he was happy to be there and happy to help.&nbsp; This was the perfect example of the trickle-down theory in action.&rdquo;<br /><br />So what can you do to put your employees first?&nbsp; What methods can you use to improve morale, treat your people well, and create the atmosphere that builds on itself as a positive force? <br /><br />As new standards are set for customer service, the company will respond in kind. Soon, those efforts will go far in making your service reputation soar.<br />&nbsp;<br /><br /><strong>Customers</strong><br /><br />One of the most common complaints made by small-to-medium sized business owners is, &ldquo;We can&rsquo;t compete with the big guys on price.&rdquo;<br /><br />The perception in the market place is that people are shopping based on price alone.<br /><br />The only reason your customer asks for the price upfront, is because that&rsquo;s what business has trained them to do.<br /><br />More often than not, people go into a business not really knowing what model, style, color or features. What if they purely ask the price?<br /><br />This actually creates an opportunity for the salesperson. Should the sales person come back with the direct response, &ldquo;that is $29.95&rdquo;?<br /><br />Or should the salesperson ask the customer some questions about what or how they are looking to use the product or service?<br /><br />This can be further explained by using the example of a kettle.<br /><br />&ldquo;In most people&rsquo;s eyes a kettle is a kettle,&rdquo; ActionCOACH ((NAME)) says. &ldquo;But it can have many different features and offer many different benefits. So a salesperson could tell the customer, &lsquo;Just so I can help you better, is it okay if I ask you a couple of questions about the kettle you are looking for?&rsquo; This is a better response than simply telling the customer how much the kettle costs.&rdquo;<br /><br />This starts building a rapport with the customer, from which the salesperson could ask more penetrating questions, such as:<br /><br /><br />&ldquo;Are you looking to replace an existing kettle or is it a gift for someone?&rdquo;<br /><br />&ldquo;Do you regularly use your kettle or is it rarely used?&rdquo;<br /><br />&ldquo;Would you like a kettle with a quick boiling time?&rdquo;<br /><br />&ldquo;Have you seen the cordless options that are available?&rdquo;<br /><br />&ldquo;Are you looking for something to match your kitchen?&rdquo;<br /><br />&ldquo;So what color are you looking for?&rdquo;<br /><br />&ldquo;Is it important that it have an automatic cut-off when the kettle is boiled?&rdquo;<br /><br />&ldquo;Are you after a stove-top option, or an electric kettle?&rdquo;<br /><br />&ldquo;Kettles come in different cup capacity; do you require 10-cup capacity or is five a better size for you?&rdquo;<br /><br />From these questions, the customer gets the idea that the salesperson is genuinely interested in needs, and that the salesperson is able to offer options in the most suitable kettles based on needs.<br /><br />The price, is therefore, negated. It is just a matter of now asking the customer to buy the kettle and close the sale.<br /><br />To close, a good salesperson could ask, &ldquo;Well, based on what we have just spoken about, there are two options to choose from, model X and model Y; which one suits you best?&rdquo;<br /><br />Finally, the question could be, &ldquo;Great, I can either put that away for now or I can process it on a credit card for you and have it delivered to you tomorrow &ndash; which do you prefer?&rdquo;<br /><br />It is important to make sure that the prospect is aware if there are any delivery charges, or if the option they choose is to have it put away, the salesperson then has an opportunity to get the customer&rsquo;s name and contact details.<br /><br />If the customer chooses this option, the salesperson should have a time-frame within which the customer picks up the item.<br /><br />This example was based on a kettle- a relatively small dollar item. How does this apply to other businesses?<br /><br />&ldquo;This process works equally well on cars, houses, furniture, service-based businesses and any other product there is, including funeral homes,&rdquo; ((COACH)) says.<br /><br />Every business owner needs to work out what his customers are actually looking for when they ask for the price, and what&rsquo;s most important to them in their buying decision.<br /><br />Only then can real rapport occur, with more sales the end result<br /><br />&nbsp;<br /><br /><strong>Business</strong><br /><br />Do your business have (or has it ever had) one of those salespeople who thinks that giving a discount is the easiest, quickest way to make a sale?<br /><br />Of course, they may be right, but what about the profit (your profit) they&rsquo;re giving away?<br />&nbsp;<br />If your product has a profit margin of 30% and your salespeople give a 10% discount to make the sale, you&rsquo;re losing a massive, one-third (33.333%) of the available profit!<br />&nbsp;<br />During a seminar for the buyers of a large retail group with branches all over the country, an attendee shared the following tactic:<br /><br />&ldquo;My job is easy. I just let the salesperson make a full sales presentation. I ask questions and listen to their explanations. When they&rsquo;re finished, I simply say, &lsquo;I&rsquo;d like to place an order with you, but your prices are too high…&rsquo; and I then simply sit there and enjoy myself, because the once-confident salesperson suddenly doesn&rsquo;t know what to do or say next.<br /><br />&ldquo;With much less conviction and enthusiasm, they may repeat the benefits and features of their products, but most of them get in to see me by giving me a lower price in the first place. Whatever new price is offered, I usually respond by saying, &lsquo;You&rsquo;ll have to do better than that!&rsquo; And more often than not, they do&hellip;in fact, do better than that! I get lower prices by just sitting there, enjoying the game!&rdquo;<br /><br />How can the salesperson win at that kind of &ldquo;game?&rdquo;<br /><br />&nbsp;If you are selling, or have others selling for you, you must protect your price and your margins. Teach your people not to hesitate or stutter when a buyer insists on a lower price. Start negotiating and using tactics to hold firm on your prices. Sell value&hellip;perceived and real.<br />&nbsp;<br />Of course, there is a monetary reason for doing this. Is it actually possible to work 50% less and earn the same income from selling? It can be done.<br /><strong><br />Here&rsquo;s how:</strong><br />&nbsp;<br />Suppose your company sells pumps, with selling price of $10,000 per unit. Assume that your net cost per pump is $7,000. That means that the net profit on each pump would be $3,000. If ten pumps are sold at the full price, the net profit for your company will be $30,000. Compare this with again selling ten pumps, but this time at a discount of ten percent.&nbsp; The total selling price for ten pumps is then $90,000. The net cost for ten pumps remains at $70,000.&nbsp; The net profit has decreased to only $20,000 compared to the original transaction $30,000 where no discount was given.<br /><br />If your company continued to sell at ten percent discount, then you&rsquo;d have to sell 15 pumps to achieve a net profit of $30,000. Here&rsquo;s how it looks:<br />&nbsp;<br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sales&nbsp;&nbsp;&nbsp; Sales Price&nbsp;&nbsp; Discount&nbsp;&nbsp; Gross Sales&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net cost&nbsp;&nbsp;&nbsp; Profit<br />&nbsp;<br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $10,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $100,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $70,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $30,000<br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $9,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $90,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $70,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $20,000<br />&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $9,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $135,000&nbsp;&nbsp;&nbsp;&nbsp; $105,000&nbsp;&nbsp;&nbsp;&nbsp; $30,000&nbsp;&nbsp;&nbsp; <br />&nbsp;<br />What are the lessons to be learned from this example?<br />&nbsp;<br />A ten percent discount means your company must sell 50% more units (15 instead of 10) to earn the same profit dollars.<br />&nbsp;<br />A ten percent discount means someone has to work 50% harder to earn the company the same dollars.<br />&nbsp;<br />By not giving discounts, in essence the company can &ldquo;work&rdquo; 50% less and earn the same income.<br />&nbsp;<br />In spite of this, some owners still think, &ldquo;But, if I don&rsquo;t give discounts, I&rsquo;ll lose sales! It&rsquo;s an industry norm to give them … everyone does it. If I don&rsquo;t give discounts, they&rsquo;ll go to the competition!&rdquo;<br />&nbsp;<br />And you may be right, of course. You may lose a few deals if you don&rsquo;t give discounts &hellip; but the good news is you can afford to &hellip; and still make the same or more profit.<br /><br />&nbsp;<br /><br /><strong>Owner, Revisited</strong><br /><br />A recent survey published in Australia&rsquo;s &ldquo;Daily Telegraph&rdquo; revealed some very interesting statistics.<br /><br />Many businesses now regard their Business Coach as being as important as their accountant.<br /><br />The survey, commissioned by ActionCOACH, found that one in two (50%) small businesses viewed their Business Coach as vital.<br /><br />Further, one in 10 (10%) of those surveyed nationally said they would not be in business if they didn’t have a Business Coach.<br /><br />Only one in five (20%) felt the same way about their accountant, according to the survey. One in every four (25%) respondents believed Business Coaches helped make the numbers grow in their business, while accountants counted and checked the numbers.<br /><br />It also found one third (33%) of small businesses surveyed identified cash flow as the biggest challenge they faced and almost nine in 10 business owners nationally did not outsource services.<br /><br />Do any of these stats ring true with you and your business?<br /><br />&nbsp;Is it time for you to take action?<br /><br />Are you looking for help with your team, time management or cashflow issues?<br /><br />Many business owners are starting to realize a Business Coach is truly the best advisor to help with the success and growth of their businesses.<br /><br />Maybe it&rsquo;s time you did, too.<br /><br /></p></p>


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