Profitology

Author: Issa

  • Are Your Business Systems Hurting or Helping You?

    Are Your Business Systems Hurting or Helping You?

    One evening, I was watching my daughter feed the dog. I noticed she would spoon the biscuits one by one into the dog bowl. The process was painfully slow. But given it wasn’t hurting anything and she was entertained while I cooked dinner, I let her go on.

    Then it dawned on me how many of us continue with slow systems when running our business. Though our current business systems are not necessarily the most efficient way to complete a task, we still don’t change them. It’s crazy, isn’t it?

    Many years ago, I had a client who vented his frustrations about a staff member who performed a particular task really slow. The said employee would set up a piece of equipment on the work bench at the start of his shift. At the end of the day, he would disassemble the equipment and put it away for storage. If he didn’t dismantle the equipment, he wouldn’t have to reassemble it for the next day’s use, saving the company hours of unnecessary work.

    It’s a simple change. But it makes a lot of difference over a long period of time. These minor inefficiencies within the business add up, affecting the company’s productivity (and profit).

    I had a similar experience at a firm where I used to work at. Their system of invoicing clients was also incredibly frustrating. There are too many steps involved for something as simple as creating an invoice for a client.

    To give you an idea, here was the process:

    1. The manager notifies the admin that a job could be billed.
    2. The admin then pulls the report containing the amount of time spent on the job to send back to the manager. This document also has the amount billed the last time the same job was prepared, if applicable.
    3. After receiving this report, the manager advises the admin how much they want to invoice.
    4. Subsequently, the admin drafts the invoices to send back to the manager (e.g. for proofreading or to check the wording).
    5. Afterwards, the manager reviews the process. If it’s okay, he will send it to a partner for final approval. If changes are needed, he has to send it back to the admin for changes. The admin will make the necessary corrections and send the invoice to the manager who will forward the error-free document to the partner.
    6. When the partner finally approves the invoice, he will notify the admin to send the invoice to the client.

    This clearly illustrates that the existence of a system does not necessarily mean business processes are as efficient as they could be.

    Taking the time to analyse your system’s effectiveness could save you valuable time and might lead to a much better bottom line.

    So, when was the last time you stepped back and reviewed your systems?

  • So You Want a Waiting List of Clients…

    So You Want a Waiting List of Clients…

    Wouldn’t it be great to have a waiting list of clients wanting to buy your product?

    I know the owners of a business who are in this exact situation. Yes, they have a long list of clients waiting to buy their product. For many budding entrepreneurs, this is dream come true. But despite their blissful situation, these business owners still face a problem.

    If my business clients wanted to meet the huge demand for their product, they needed a large capital outlay. I’m sure you are all thinking what I immediately thought. When you have such a high demand for your product, you can increase your prices.

    The ladies admitted I was not the first person to suggest this to them. But they are facing fears of losing customers on account of raising their prices. As an option, I suggested they keep their existing clients on the original fee and then increase the price of their product for new customers.

    To solve the cash flow issue of having a large capital outlay, I proposed they charge the first two or three years upfront. This would allow them to buy the materials required to create the product and supply the orders.

    What’s the upside to this? The supply of this particular product means they can increase revenues from other related income streams within their business. So, increasing the volume of sales of the major product has a flow on effect in other aspects of their business.

    How to generate a huge demand for your product or services

    Once you’ve created a product that answers a pressing need or satisfies your target’s desire, generating a buzz is the next crucial step.
    There are various ways to increase the demand for the product you have created. Some use scarcity. Some address the pain points of their target buyers. Others use exclusivity.

    The ladies knew their target market on a deeper level. That’s why they were able to develop a product tailored to their customers’ need. They also built a product they are passionate about. Their compelling marketing strategy? Share their beliefs, unique story and passion with their target market.

    The buyers of their products have the same ideals and beliefs as they do. They have attracted a loyal base of clients who want to be a part of their company’s story. By purchasing their product, their customers are able to interact with the company and create their own story.

    Having lots of customers waiting in line to buy your products is a great aspiration and if other business owners can do it, you can, too.

    Great product, compelling marketing, and smart cash flow management are the key to success.

    Do you know a good story that your target audience can relate to? See how you can effectively use it to persuade buyers to line up for your products or services.