The Power of Small Change

I often hear business owners say things like “I can’t see how I can get any bigger – I’m already swamped and too busy”, “Some of my staff drive me round the bend”, and “If I need something doing I have to do it myself”.

There are things you can do to change these things and we’ve worked successfully with a number of businesses through the challenges and worked to grow their businesses.  The aim of growth isn’t just to increase turnover, profit and staff numbers.  To me it’s also growth that will allow the delivery of successful personal goals for the business owner.  Usually, these lie outside of the business – a new home, car, second home, holiday of a lifetime, or bigger boat.  In one instance, the peace of mind to start a family.

FIVE STEPS to increased profitability:

  1. Leads
  2. Conversions
  3. Average sale value
  4. Increased transaction volumes
  5. Manage margin

Focus activity on each one of the above heads and making small improvements each cycle.  For example:-

  1. Leads

Identify where potential for more exists and plan and implement a strategy to acquire more leads.  After an appropriate period analyse and evaluate the methods used.  Which worked well, which didn’t, and then repeat.  Do more of what worked and do less, or none, of what didn’t.

  1. Conversion

Are some team members / colleagues better at conversion than others? If so, focus and train those to be even better. Are you able to segment into market sectors for better conversion rates – do more of the most successful, do less of the least.

  1. Increase average sale

Identify activities such as up or cross-selling to increase sales and the values of your sales (monitor performance, evaluate and adjust as necessary)

  1. Increased transaction volumes

Identify current transaction levels and set a target to increase these. Identify activities and implement a plan to increase volumes (monitor, evaluate and repeat).

  1. Manage margin

Review and control overheads.  This isn’t about getting the lowest immediate price.  Think quality and long term value – this will prove better value in the long run.  Review your supplier base.  Is having fewer, loyal, suppliers a better strategy than repeatedly tendering for lowest cost?  Service, delivery times, reliability (in short, ‘quality’) in your supply chain can have a positive impact on your ability to deliver quality to your customers.

As I’ve highlighted above, this isn’t just a one-off activity.  Having a programme, and culture, of continual evaluation, and implementing activity for performance improvement across these areas will bring long term benefits.  It will also bring you closer towards your goals – for your business and for you personally.

HOW?

The power of small change: A 5% improvement in these areas can lead to significant increases in net profit (typically over 20% to 33% improvements in net profit).

Either talk to me or our MLP growth team if you’d like to know how we can help your business or for more information.