In a tough economy, making a profit is hard. Maintaining profit is even harder. But doubling and tripling it is a whole other ball game.
It’s not all about the money, but without money you cannot realise any of the dreams that you have for your business. You have to first make money before you can start changing lives.
We have managed to more than triple our bottom line profit from the previous year. Our team is now applying the keys and practices that enabled this growth to our clients’ companies with similar success.
I would like to share five of the most important learnings with you:
1. Focus on a specialised niche
People are willing to pay more for specialised skills than for generalists. Select a profitable niche and ensure that you are an absolute expert in the area of business you work in. Know your market and your focus area within the market.
Be at the cutting end of trends and technology within your niche and make sure that you have what it takes to serve them well. Identifying your perfect profitable niche requires both an inward and outward focus.
First, look inwards. What are your passions, purpose, natural talents, knowledge and experience. Think about what has been placed in your heart and decide what your personal message is. It’s important to position yourself to do something that you love.
Running a business will always include challenges and tribulation, but doing what you love and what you were made for will help you to persevere.
Secondly, look outwards. Focusing on what you love will only convert into profit if it’s something that sells. Health, wealth and success. Beauty, relationships and sex. Personal development and spirituality. Relationships and happiness. Technology and innovation. Make sure that your niche is something that has a definite market.
Then drill down to find that ‘inch wide and mile deep’ part of the market that you want to speak to. Instead of being just another law firm, if your passion is entrepreneurship and technology, be a law firm that specialises in tech start-ups using the latest technologies to service them.
2. Brand eminence
A hard process of cost cutting is required to grow profit without growing top line revenue. Growing profit is a lot more achievable when revenue growth is high. Establishing yourself as a thought leader in your industry goes a long way towards building your brand and ensuring that new business seeks you out.
Make sure that the differentiating factors of your offering have some superiority over those of the competition and that this fact is made visible. Your brand must command eminence. Being seen in such a light drastically changes what foot you start on when negotiating with a new client as well. Drive new business to fuel top line growth through an established, visible brand.
Writing good content for press distribution, taking up sensible invitations to speak at industry conferences and events, ensuring positive social media engagement and streamlining all of your communication material are all low cost ways in which to start adding bulk to your brand.
Once you are established within your industry and seen as a leader in your niche, work should be flowing in. Now the secret is not to be overwhelmed. Biting off more than you can chew could lead to non-delivery on those big promises that you and your brand have made. Delivery as promised will be required to turn once-off projects into long term, retainer clients.
Working harder and longer is not sustainable. New staff cannot always be found, trained and equipped fast enough. What you need is systems. Some work will always require your personal touch, but a large portion of work and business processes can be automated.
Yes, material hours will go into developing systems and processes. Hours that are not billable. But these sacrifices ensure that you can handle volume as your business scales. Good systems ensure that nothing falls through the cracks and that your delivery is on time and up to standard. Over time, it also enables you to perform tasks faster, which increases profit margins.
Work flow, client relations management and financial reporting are three of the first areas that you need to automate. Planning workflow and keeping track of billings can be done well using an online tool like Harvest. Managing leads and saving client information can be done for free using online CRM systems like Zoho.
Bank transactions can automatically be drawn into cloud accounting packages like Xero, making month-end reporting and live financial records possible. There are amazing automation tools out there to suit almost all business processes.
4. Cash flow management
The age old concept that cash flow is king applies. Managing cash in and cash out well is a big management challenge. When sales are soaring and new contracts are coming in, careful planning is needed to ensure that short-term obligations can be met.
Accounting profit is not cash flow profit and ignorance on this topic could cost a fast-growing company the ultimate price. Be sure to build enough detail into your cash flow model to be able to effectively plan and manage the lifeblood of the business.
Start with cash in the bank at the beginning of the period (normally a month, could be a week) you are analysing. Add all expected cash inflows for that period, taking careful note of when debtors are expected to pay. Subtract all expenses that you know will need to be paid in that period.
Make sure that all repeated transactions (like rent, telephone bills, salaries) are kept in mind for each month. Also remember to prepare for the payment of all non-standard items (like that annual licence renewal or the new asset purchase due).
The end result of this sum would be your cash balance at the end of the period. If you make use of more than one bank account, be sure to add the cash movement in each of them to your calculation.
Having all of these figures plotted out for a period like a month shows you very well where your cash is coming from, where it is going and what you have left to work with.
It is far more valuable to monitor than just to look at the profit and loss for the month. As the saying goes — turnover is vanity, profit is reality, cash flow is sanity.
5. Expand revenue streams and profit centres
Once work-flow is automated and cash flows are being controlled well, your success should be reflected in your bottom line. The final step is to diversify your streams of revenue.
Explore various other avenues of revenue generation within your area of expertise and within your niche. For each new revenue stream, follow the same process of establishing eminence, engineering automation and monitoring and managing cash flows. You already have the recipe — now rinse and repeat.
The easiest way to establish a new revenue stream is to look at your existing client base and to ask — what else do they need that I am not yet supplying? If you’re a Software-as-a Service provider offering a solution to the finance industry, you might not consider offering ready-made meals to your client pool next.
Related: How Smart Managers Drive Profits
Adding a consulting arm to your solution that you also offer to your existing clients, or adding a new functionality that solves a different problem could however be good for business.
Applying these learnings to your business with persistence will ensure an uptick in profit. Patiently think them over and incorporate them in your company to ensure that critical bottom line success.
What To Look Out For When Seeking A Mentor Or Coach
There is value in choosing a mentor or coach to help you build your business, says Dr John Demartini. Here he offers some sound advice on how to go about doing this so that you benefit from the experience.
When I was in practice I noticed many doctors attempting to build a business would seek out mentorship from management consultants, from people who have already been down that path. And there’s wisdom from learning from foresight and not learning from trial and error. But there’s a pitfall – I noticed that not everybody is able to do or sustain the actions that these consultants would suggest. Where some would follow and immediately go and succeed, there were others who would sometimes feel self defeated because they couldn’t sustain the actions that the consultants would suggest and recommend.
So a small percentage would excel and do extremely well. But there were those who would spend their money on the coaching and they’d never get anything in return. So the question is – what made the few excel with the help of a coach, consultant or mentor? And why is it that the majority of them didn’t do as well? And it boils down to how congruent the actions of the coach or consultant are with the values of the person that’s striving to build a business.
I have listened to numerous professional consultants all offering slightly different information about how to build a business. I have taken and learned from all of them. Some of them would suggest things I just couldn’t do – it just wasn’t me – and other things that I could do. And when I couldn’t do something, the coaches and consultants believed I just was not disciplined, not driven. They would imply that I didn’t have the drive… Their material works, but I wasn’t following it.
And those of you who have had the same experience will understand what I’m saying. And you need to know that the reason you don’t do what these coaches suggest is because it’s not aligning to your values. So you are labeled lazy, undisciplined, not driven. You are given these labels instead of realising that you’re self defeating because what they suggest is not congruent with your values. And so you go to different consultants until you finally find the one who matches, whose values are aligned with yours.
So it’s important to not envy and imitate somebody with a drastically different set of values. If you’re seeking a coach or mentor, make sure the coach/mentor has a value system that is closely enough aligned to yours or you will be setting yourself up to fail. Just because somebody is successful doesn’t mean if they are your coach or mentor that they will have the values that will lead you to that same form of success. You need to either shift your values to be able to succeed in their system or you need to find the mentor that aligns more with your values. Otherwise you’ll be beating yourself up thinking there’s something wrong with you when there’s nothing wrong with you. When you find the right mentor, you will take off.
So you either have to change your values to match the objectives of the coach, or change the coach to match the truth of your own values.
So the bottom line is, if you’re going to get mentorship, coaching or consulting from somebody, don’t just select the person because they’re successful. Select them because they’re successful and they have some alignment with your mission and your values. Make sure you select your mentorship and a consultant that is truly valuable to you; don’t live in a fantasy about who you are.
The Link Between Scaling, Relationship Building And Technology
It is the first solution of its kind in South Africa, this platform supports entrepreneurs to effectively establish legal foundations in their businesses for optimum growth and overall business success.
The challenges and opportunities of this new world and that the world is more connected than ever. The constraints of distance is no longer applicable and as a result business has little constraining borders. Networking is therefore still a component in key relationship building.
It brings me to my real point – in a world so busy and connected, what we cannot make more of is time and time, unlike any other commodity is invaluable when it comes to forging important relationships and sustaining them. So, if technology can break barriers when it comes to legal cost and time spent on it… why not? Especially when so many have experienced the consequences of not documenting the most important relationships in their business.
The SchoemanLaw SME Self- Service DeskTM is the ideal tool for any member-based organisation wanting to capacitate and empower members. It is an affordable and reliable online solution for start-ups and SMEs, where Users can customise and download their own contracts online and in minutes. It is the first solution of its kind in South Africa, this platform supports entrepreneurs to effectively establish legal foundations in their businesses for optimum growth and overall business success.
The following documents are examples of those available on the platform (currently hosting over 35 documents / agreement types):
- Confidentiality and Non-Disclosure Agreement (“NDA”)
- Independent Contractor Agreement
- JV Agreement
- MOI and Shareholder’s Agreement
- Supplier Agreement
- Letter Demanding Payment
- Various HR Documents and Company Resolutions
- BBBEE Affidavits (EME and generic QSE)
and many more!
Prices range from R195 and R895 per document if downloaded on a pay- as- you- need- basis or R249 / R495 per month on a subscription basis, this is over 75% less than usual rates if traditionally drafted by an Attorney. What is more, Users have the support of a Law Firm not only having created, but who maintains the platform and supports each User. We even offer customisable solutions. So, there support and a solution for any business regardless of size and industry are on offer.
The platform is easy to use, no prior legal training is required, and Users are supported through help texts, free podcasts, videos and training events. In the case of a legal incident occurring, you can consult with an attorney with the click of a button.
The platform is also ever evolving and completely customer- driven. Documents are added as and when customers request them. All the documents are also frequently updated to ensure that they align to the latest best practice. There is no need to leave your legal needs unattended ever again! The SchoemanLaw SME Self- Service DeskTM therefore ensures that SMEs are no longer invisible and capacitates them to free up time needed to build relationships, grow and scale their businesses.
Empower your business today, go to: https://www.schoemanlaw.co.za/online-legal-services/
To Survive And Thrive, You Need A Growth Mindset
The business case for a growth mindset is not what you think it is — if you’re serious about success, you need to start believing in yourself.
Any leadership and personal mastery principle that booms in popularity is ripe for misinterpretation. Growth Mindset has been hailed as one of the defining leadership principles of top international companies and is believed to be one of the core skills that will keep individuals future fit in disruptive times.
Despite its popularity and importance, many companies still think a growth mindset is about the profit growth of a business. It’s not. And if you don’t know what it really is and how to apply it, you and your business might not be around to grow at all.
Growth Mindset is about Belief in Ability
Studies that we have done at the NeuroLeadership Institute (NLI) have shown that many businesses still believe that having a growth mindset means keeping eyes towards profits and striving for business growth.
Having a growth mindset is really about the continuous belief that improvement is possible and that failures are opportunities to learn. It is much larger than the objective of improving earnings, although applying a growth mindset makes one more resilient and engaged in times of change, which can only improve earnings overall.
Another study completed at NLI revealed that there are five reasons why businesses are applying a growth mindset to drive business success.
1. Digital Transformation
The most popular reason is to stay agile in the face of technological uncertainty. Digital technologies are continuing to disrupt the way that we do business and a growth mindset is put forward as a priority to ensure businesses thrive through digital disruption.
2. Business Improvement
A growth mindset encourages feedback and continuous improvement and many businesses look to embed this when they are streamlining work streams, teams and business processes.
When organisations are pivoting they use a growth mindset in their approach to reinvention of culture, operating model and leadership challenges. The growth mindset principle of seeing challenges as opportunities and not threats has an impact here.
4. Growing up
In an effort to scale a business, organisations see the benefit of applying a growth mindset to navigate the challenges and turmoil that accompanies growth.
5. Performance Management Transformation
Some businesses interview for and reward demonstration of a growth mindset. This means that they value improvement over time as a priority.
Clearly a growth mindset has business success at the core of its value-add to many organisations. It helps businesses be more agile and engaged during change, but how does it work, and how can we cultivate it?
When faced with a challenge we either tackle it head on, hoping for positive results, or we shy away from the challenge, feeling inadequate. In the brain, this is caused by how we view the challenge. If we view it as a threat, our body reacts with duress (negative stress) and we don’t prioritise our best thinking, going into survival mode instead. But if we view it as an opportunity, our body goes into euress (positive stress) and we are energised, our body is able to prioritise its best thinking. This type of behaviour can be categorised into two groups, that of a growth mindset and a fixed mindset.
Psychologists have studied these behavioural traits and found that individuals who believe in their ability to succeed are seen to have a growth mindset, whereas people who give up instantly or constantly harp on the negative aspects of a situation are seen to have a fixed mindset. Therefore, a fixed mindset sees no room for improvement and in return devalues their ability to perform.
A fixed mindset is linked to a belief that our ability is fixed and a growth mindset is linked to the belief that our ability can be grown. The surprising finding here is that our default wiring is wired to that of a fixed mindset.
Creating a Growth Mindset
Researchers have found that to incorporate the growth mindset into organisations, leaders should focus on factors such as transparency, empowerment and development.
With the digital age that we are currently living in and even trying to adapt to daily, organisations need to constantly reinvent, improve and manage performance based on digital transformation. A growth mindset assists in the rapid changes that organisations face even on a digital platform.
For a growth mindset to be established in organisations, management needs to lead the overall process. Thus, there needs to be a shared language. To ensure that there is a shared language, managers should encourage employees to build the right behaviours, and have systems and processes in place that promote a growth mindset throughout the organisation.
This can be done by:
- Valuing and rewarding progress in others
- Focusing and highlighting learnings from mistakes and challenges
- Role modelling this behaviour.
Researchers have shown that a growth mindset can have measured benefit in organisations. An internal survey at a technology company showed that 92% of employees agree that learning is a lifelong exercise and 82% of managers displayed growth mindset behaviours. The growth mindset enhances the quality of an organisation for the greater good of future and current employees.
When calamity strikes in organisations, the growth mindset aids in seeing change not as a threat but rather as an opportunity to improve based on a positive mindset.
Shifting Away from a Fixed Mindset Approach
A fixed mindset hinders progress. For businesses to prosper, there needs to be an attitude of constant learning, even when failure occurs. There are certain things one can do to shift your fixed mindset to a growth mindset.
Firstly, eliminate any thoughts of inadequacy. Your thoughts determine your actions, therefore shift your thinking to that of a “can do” attitude. You need to recognise your potential, understand your abilities and that they can be improved, and know that stressful situations are opportunities to learn and grow, rather being a threat.
The minute you find yourself in a fixed mindset with a negative thought process, talk yourself into remembering your capabilities. Try replacing those negative thoughts with, “I know that I am not excelling in this area, but I am going to learn how to improve and come back stronger than before”.
A growth mindset is a phenomenon that you must constantly think about and instil in your daily life, both on a personal and professional level to see positive results, remembering that you are in a cycle of lifelong learning.
Company Posts2 weeks ago
Changing The Shape Of What’s Possible
Entrepreneur Today1 week ago
3 Stealthy Tax Hikes Payroll Managers And Employees Need To Take Note Of
Entrepreneur Today2 weeks ago
How SMEs Can Stand Out From The Crowd
Entrepreneur Today1 week ago
SMEs: Staying On The Right Side Of The Taxman
Entrepreneur Today1 week ago
4 Dangers Of Business Under-insurance
Entrepreneur Today2 weeks ago
Inspiring A New Generation Of Learning – Education As A Basic Human Right
Company Posts2 days ago
Executive Education Geared For Industry 4.0