Don’t Win the Game and Lose Your Business! Part 2
Read part 1 of "Don't Win the Game and Lose
Your Business" here
Define What You Want and Need to
A successful business over the next several years
operates by knowing what it does best, why it does what it does-its
purpose, and what it needs to do to stay focused and gain market
share. It has a clear vision of why the business exists and what
measurable results are expected to keep it winning for a long time.
The purpose of a business is to give the owner what he or she
wants. In publicly traded companies, stockholders want three
- Quarterly earnings or profits
- Increasing stock values
- Revenue growth
In private companies, the owner can want a variety of
things, including the three listed above. Small business owners
also want their businesses to create wealth, build equity and give
them freedom from handling the day-to-day operations. Some use
their companies to create investment opportunities that reap
fantastic returns. Others put a heavy focus on loyal customers.
While others seek to maintain great place to work that attracts and
retains the best people in their industry.
To reach your objectives, start by deciding what you
want and what you need to do to be successful over the long term.
The purpose for your company can be whatever you want it to be:
freedom, finances, fun, family, community involvement, service or
In many cases, the owner works 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. With a clear purpose, one would have specific reasons why
one owns a business and what results can be expected.
Expect the Results You Want!
For a business to work, expected measurable results
must be clear, precise and written. Some of the clear results a
commercial construction company might shoot for include the
- Return on Equity: Minimum 15% to 20%
- Return on Overhead: Minimum 20% to 50%
- Net Profit on Sales: Minimum 1.5% to 3%
- Total Revenue: $12,000,000
- Maximum Overhead: $800,000
- Loyal Customers: Minimum 25%
- Repeat Customers: Minimum 50%
- New Customers: 1 per month
- Number of Customer
Referrals: 12 per year
- Number of Contracts: 24 per year
- Minimum Contract: $500,000
- Employee Retention: 90%
- Employee Training: 40 hours per year each
Set clear, measurable targets and then make people
accountable and responsible to make them a reality.
Developing a Winning Focus!
A winning business finds and keeps customers at a
profit. This must be the central theme and priority of all business
operations at every level in your organization. A typical
construction company experiences a constant struggle between what
it sells and what its customers buy. Customers demand 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 profit. It is difficult to be
the low-bid provider while delivering the best quality and superior
To improve your bottom-line success, get your winning
strategy and focus on-target as follows:
|Your #1 priority:
Repeat loyal customers
Make 20% minimum return on equity
|What we do best:
Provide personal service
Integrity and trust
|What project types we do:
|What size projects we do:
Over 20,000 square feet
|Where we do business:
||Within 60 miles from our office
|Who we do business with:
|How we do business:
||Full service and full value
|Total project management:
Jack-of-All-Trades = Losing
In your business, you can't be all things to all
customers. It doesn't work. A 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, both of which
improve customer loyalty and bottom line profit.
If you want to focus your top priority on creating
loyal repeat profitable customers, you'll have to re-write
everyone's job description to include focusing on customer
satisfaction. You might also need to change your incentive plans
with targeted results based on finding and keeping customers. This
should result in productive and focused people, lifetime customers
and above-normal profits. With continuous repeat customers, finding
new opportunities can become an easy task for your business
Call Winning Plays!
The ultimate goal in business is to be systemized and
organized. This will produce the same results every time and
deliver the results you want. This requires a set standard way of
doing the work. Good systems determine the ultimate success of any
business. Poor, unused and unmonitored systems equal sporadic
results that are too dependent on people and the owner making too
many of the day-to-day decisions.
To build a consistent machine, it is management's job
to work on the business and develop, refine and perfect its
systems. Focus on dedicating a portion of every week to improving,
documenting and refining your operational systems. As you work on,
rather than in your business, your role changes from doing the work
to managing the systems.
An organized and systemized business allows 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
business that works!
Your leadership decisions determine your everyday
results. Weak and inconsistent actions will not get the winning
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 will do and don't do. To build your business takes
hard work, positive decisions and visionary determination. Don't
and you won't. Do and you will.
George Hedley is a professional
construction BIZCOACH and popular industry speaker who helps
contractors increase profits, grow and get their companies to work.
To learn more, visit www.hardhatpresentations.com.