Coaches to Super Stars Patty DeDominic & David Finkel want you to be even more successful!
My friend and client, David Finkel, is a brilliant business strategist, a coach, an investor in businesses, people and real estate. His bestselling books have helped over one million entrepreneurs grow their companies.
Recently, David sent a letter to his clients and new business prospects with some valuable advice. I have reprinted his advice here. -Patty DeDominic
By David Finkel, CEO Maui Mastermind
1. Formalized referral systems. If you find that a lot of your business comes by "word of mouth" then FORMALIZE several referral systems so that you can consistently control and spark inbound referral leads. • One services firm we work with uses a "check in" form with 3 blanks for referrals ("we'll send them a complimentary...") • Another medical practice we work with hosts quarterly "Friends and Family Health Days". • One online retailer we work with offers a coupon code to give a friend of theirs $20 off their purchase.
2. Create an "Expert System" to increase your production capacity, lower your real costs, increase your value offering, and control for consistency. An "Expert System" is a system that captures the "know how" for how you run a core process in your business into a standardized method. This allows you to staff down to less expensive staff, to automate steps, have checklists or controls in place, and to at the very least template the process. It also pushes you to rethink how you do what you do to increase the value at the same time. • One CPA firm we work with increased their margins by taking 30% of what they used to have to do their expensive "Tax Seniors" do, and turned that over to admin help who used a clear template. • One manufacturer we work with reduced their risk by getting the "know how" of their senior engineer into a concrete system just in case he ever got hurt.
3. Tune up your collections system (A/R) to improve your cash flow and increase your operating profit. Generally most owner reliant businesses are lax with either the pace or consistency with which they collect on their receivables. Yet just about every business owner I ever talked with tells me this isn't a problem for them. Still our business coaching team consistently finds that the average new client we accept into the Business Coaching Client has a past track record of losing between 5-15% of their A/R to poor collection practices. This is wasted pure operating profit since they are already paying the all the expenses of the business. No wonder that they smile--we help them find the fees to work with us and then some, often within the first 120 days of beginning to work together! • One occupational therapy clinic we work with found $66,000 of missed billings after two focused coaching sessions on this part of their business! • An I.T. company we worked with found and collected on $48,000 of receivables that they had never even billed for!
4. Implement a regular "Reactivation System". Most businesses never formally and systematically go back to their past customers to regularly ask them to come back and buy from them again. What a waste! It cost you so much to initially acquire them as a client, but unless you have a system to automatically prompt you to effectively work to reactivate former customers, you're missing out. • Implementing a Reactivation System helped one manufacturer we work with generate $80,000 of new orders in 60 days. • One dentist we work with got a 25% conversion with her Reactivation System (and grew her clinic by over 30% in the process.)
5. Improve your Financial Pillar so that your financials are set up correctly to show you your true financial picture. One of the biggest point failures for most business owners is their lack of financial sophistication about fundamental financial concepts that are critical to running a successful business. How do you stack up on the "Big Three" warning signs that your Financial Pillar needs work? • Can you clearly see your "gross profit"?
Your gross profit is the money you make after you subtract the direct costs of producing or acquiring your product or service. It is THE MOST IMPORTANT number for a business owner to track and review weekly (ideally) or monthly (at minimum).
Yet over 90% of small business owners can't give me their true numbers off the top of their heads! (OUCH!) • Can you easily look at your financials by product, or by sales channel--at the push of one button in your financial software? (If you can't, you simply haven't set up your Financial Pillar the right way!) • Can you clearly understand your cash flow situation over the next 90 days on a rolling basis within 5-10 minutes of pulling up the correct report? (Again, when you set up your Financial Pillar correctly, your accounting software can immediately process this into a simple report or dash board for you!)
David and I wish you greater success in 2013! We are hoping that you will write or call us if you need help in growing your enterprise. Or, better yet, you can to get a complimentary copy of our latest 176-page bestseller,