by George Hedley
A winning business must work regardless of the economy or market. It must work well, super fast, extremely efficient, very lean, and produce a profitable bottom-line. If your company doesn’t work or achieve its’ goals, it’s not the economy or marketplace; there must be something wrong with its’ business model, operations, or company leadership. To develop a winning game plan, you’ve eventually got to face reality. If your competitors are still in business and continue to take jobs away from you at lower prices, the problem is not the competition; the problem is your playbook and how you play the game.
Winning companies today have to be innovative, creative, cutting-edge, AND always achieve exceptional bottom-line results. Old methods of playing the game of business, former customer pipelines, and outdated management techniques won't deliver what company owners need and want. Even though, a majority of business owners stay stuck in their past ways and continually play catch up with more competitors, new contract methods, new delivery systems, and high-tech project requirements that appear quick, difficult to implement, and intense.
Often older, slower, or established businesses sit and watch their competitors be first implementing new ideas, technology, training, management techniques, operational systems, or equipment. Some also resist making tough decisions about their future and don't change until it’s too late. Some hope that everything will work out as it always has before. This type of leadership will only do one thing in today's exponentially pressured business climate ‑ FAIL.
Today, it takes innovative strategy, decisiveness, clear vision, additional investment, and added risk to be successful. It also takes guts to make tough decisions to keep your company in business and allow it to emerge as an industry leader. It takes real strength and confidence to win beyond 2010.
Start With A Blank Playbook
To build a "Beyond 2010" business, start with a new outlook and a fresh piece of drafting paper. Ask the question: "If we could start over, how could we design this company to be a cutting-edge industry leader?" Forget about your current people, positions, procedures, rules or customers. Think new. Think new markets. Think real customer needs. Think creative approaches. Think beyond the same old box. Think different and NEW delivery systems, pricing structures, chain of command, rewards and incentives, management reporting, productivity programs, customer relationships, sales and marketing approaches, and profit goals. Think YOUNGER with less control. Think about rewarding and compensating results in new ways.
Think FASTER. Think BETTER than ever before. Think BEYOND. Customers today want it all. Design your product or service for today's demanding customer who expects perfect quality, and perfect service, at a great price. Design your company to deliver bottom-line results twice the industry average.
Define What Game You Play
A business that wins beyond 2010, knows what it does best and why it does what it does: the game it plays. It has a clear vision of the business’s purpose, why it exists, and what measurable results are expected. In many cases, business owners work too many hours for the return he or she receives. This is common in small and medium size entrepreneurial companies where the owner and business are one in the same. In those cases, the owner doesn't own a business, he owns a job that doesn't pay very much. With a clear purpose, one would have specific reasons why one owns a business, what results can be expected, and the benefits expected for business ownership.
The purpose of a business is to give the owner what he or she wants. In publicly traded companies, stockholders want two things:
- Quarterly earnings or profits
- Increasing stock values
In private companies, the owner can want a variety of things. The purpose for your business might be to generate ongoing profits, create equity and wealth, and give you freedom from day-to-day operations so you can focus on your priorities that will give you the highest return. You can use your company to also create business opportunities that allow you to achieve these goals. In order to do this, one approach can be to put heavy focus on retaining loyal customers and maintaining a great place to work that attracts and keeps the best people in your industry. To reach this objective, one tactic might be to design an incentive program to share your profits with your key leaders and management team. This would make it a win-win-win for you, your people, and your customers.
The purpose for your company can be whatever the owner wants it to be: freedom, finances, fun, family, faith, image, prestige, community involvement, to help others, provide service, or anything else you can think of. The purpose of your business is NOT to keep your crews and equipment busy, create stress, work hard, or barely break-even.
Expect "Beyond 2010" Results!
For a business to work, expected measurable results must be written down, measurable, and clear. Some examples of results you can shoot for include the following:
Return On Equity - Minimum 15% to 25% pre-tax
Return On Overhead - Minimum 20% to 50% pre-tax
Net Profit On Sales - Minimum 2% to 10% pre-tax
Total Revenue - $__________
Maximum Overhead - $__________
Loyal Customers - Minimum 25% to 50%
Repeat Customers - Minimum 33% to 66%
New Customers - 12 per year
# Customer Referrals - 24 per year
Number of Contracts - 24 per year
Minimum Contract - $1,000,000
Employee Retention - 90%
Employee Training - 40 hours per year each
The key to making it happen is to know what score you are striving for. Set clear measurable targets and then make people accountable and responsible to make them become a reality.
Developing a "Beyond 2010" FOCUS
The "Beyond 2010" company focuses on making an above average industry profit, continually seeks to find new customers who value what they do for them, and strives to convert every customer into repeat customers and then into loyal customers. This focus must permeate and be the central theme and priority of all business operations at every level in your company.
Many construction companies experience a constant struggle between what they want to offer and what their customers actually buy. Customers demanded first class quality and top service but often make their buying decisions based on price. The challenge is how to deliver on all three: schedule, quality, and price, and still make a fair but significant profit. It’s difficult to be the low bid provider while delivering above standard quality and superior personalized service.
Consider pinpointing your company’s focus. Consider these target area examples to get your business headed in a positive direction.
- Your #1 priorities - Repeat loyal customers
- Make 20% minimum return on equity
- What we do best - Provide personal service
- Integrity & trust
- What project types we do - Commercial & medical buildings
- What size projects we do - Over 50,000 square feet
- Over $2,000,000.
- Where we do business - Within 100 miles from our office
- Who we do business with - Hospitals & Medical
- How we do business - Full service & full value
- Total project management
- Design-Build negotiated contracts
- Difficult high-tech projects
Jack Of All Trades?
This economy has taught most contractors that by trying to be all things to all people doesn't work. When you are unfocused and chase every kind of work imaginable, all across the State and beyond, you can’t make any money while you get real tired and broke trying. One real benefit of getting focused is the ability to know when to say "no!" When you decide who and what you are, the opportunity to excel increases dramatically. You become laser beam focused and don't get off track. This improves your sales success ratio, operational efficiency, customer loyalty, and bottom-line profits.
To achieve your #1 priority of making a profit and focusing on finding and creating loyal repeat customers, you’ll have to rewrite everyone's job description accordingly. It’ll be your task to create clear targets and expectations in the area of customer loyalty and profit for every employee to keep them focused on what it takes to win the game. You will also want to develop incentive plans for them focused on these goals as well. This will help you build a beyond 2010 business, insure productive people, nurture lifetime customers, and generate respectable profits. With continuous loyal customers, finding new opportunities will become an easy task for your business development department.
Building "Beyond 2010" Systems
An effective goal to increase your profits is to be systemized and organized. This will produce consistent results and set a clear standardized procedure for everyone to do the work. Written, followed, and trained operational systems determine the ultimate success of an efficient business. Good systems equal good results. Poor, unused, and unmonitored systems equal sporadic results that are too dependent on great people.
To build this consistent machine, it’s management's job to work onthe business and develop, refine, and perfect its’ systems. Priority must be given to dedicate a portion of your week to improving, documenting, training, and refining all operational systems. As you work onrather than inthe business, your role will change from doing the work to managing the systems. An organized and systemized "Beyond 2010" business will allow your people to respond to customers in a consistent and predictable manner. Building a business that works or rebuilding an existing one is not easy. It takes a lot of dedication, hard work, and forceful leadership. But, the end results are well worth it ‑ a winning business that works well beyond 2010!
Your leadership decisions determine your everyday results. Weak and meandering actions will not get the results you want. Where are you now? Where do you wish you were? How can you make it happen? Be bold. Be brave. Be radical. Try something new. Set clear measurable goals and targets. Write out exactly what you do and don't do. To build winning "Beyond 2010" business takes hard work, positive decisions, and visionary determination. Don't and you won't. Do and you will!
ABOUT THE AUTHOR
George Hedley is the best-selling author of “Get Your Business to Work!” As an entrepreneur, popular speaker and business coach, he helps business owners build profitable companies. E-mail: email@example.com to request your free copy of “$ure $trategies To $urvive A $lowdown!” or sign up for his free monthly e-newsletter. To hire George, attend his “Profit-Builder Circle” academy or be a part of an “Executive Roundtable Group” call 800-851-8553 or visit www.hardhatpresentations.com.
George Hedley HARDHAT Presentations
Email: firstname.lastname@example.org website: www.hardhatpresentations.com
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