Growing Your Skills: Five Ways to Boost Business in 2017
If you’re like most business owners, then you’re likely concerned with the growth and development of your business. After all, it’s your livelihood and you want to make sure you’re doing what you can to stay relevant, provide great services/products, and keep growing.
According to business guru Keith Cunningham, nine out of ten businesses shut their doors within their first decade. Many business owners think it won’t happen to them, but the statistics indicate that without the right planning and preparation, it’s only a matter of time until some difficult choices must be made.
However, the good news is that this can all be avoided with the right tools. In his book, The Ultimate Blueprint for an Insanely Successful Business, Cunningham lays out some solid strategies to help keep business owners on track and bolster the growth and development of their organizations. Here are five tips to help you grow your business in 2017:
Businesses are inherently dynamic, not static. They’re in a perpetual state of flux, thanks to a ton of changing variables: competition, consumer preferences, interest rates, the economy, etc. How do you keep up with all this change? By measuring your progress, your shortcomings, and your planning to achieve long-term goals.
2. What gets measured is what gets done
It’s impossible to know what to change if you don’t know the numbers. In addition to the flexibility to handle the constant changes in the business world, a business owner must also be acutely aware of what is and isn’t working and find ways to modify unsuccessful behavior. Simply keeping track of things isn’t enough. What gets measured should also get managed: measure the effect and change the cause.
3. If you can’t read the scoreboard, you don’t know the score
According to Cunningham, most business owners get the numbers from their accountant, but don’t really know what to do with that information. To be effective, business owners must have an accurate understanding of where they stand financially. Without this knowledge, it can be frustrating for business owners, since they can see the results of a problem. But without knowing the cause or understanding what to change, they may be leaving money on the table by not correcting the appropriate problems. Know your terminology, know how your finances work, and you'll be in a much better place.
4. Solely relying on growth isn’t an answer unto itself
What's the first tactic for many struggling business owners? Grow the business. Several individuals, when faced with a problem, try to grow their way out of it: they hire new employees, revamp their promotional materials, modify the company’s commission structure. However, unguided growth rarely solves financial problems. Per Cunningham, “I see a lot of businesses struggle and fail, not because they aren’t adding new customers but because the owners are lousy at keeping the ones they’ve got…How big would your business be if you still had every customer who ever tried you?” The goal for businesses should not be growth for growth’s sake. The focus should be on creating sustainable success.
5. Operating cash is crucial
Operating cash flow measures a business’s ability to convert profits into cash. “A good business is a business whose operating cash flow is not only positive but also bigger than its profits,” Cunningham says. Many businesses without positive operating cash delay paying bills, dip into savings to do so, or borrow more money. But when you’re out of cash, it’s impossible to keep the business functioning. There’s no way to sustain this long-term: profits must be successfully converted to cash flow for operations, or your days are numbered.
Running a business is hard work. It takes a tremendous amount of dedication, but if done correctly, the rewards can be extensive and long-lasting. For more information on Keith Cunningham or his books, check out his website www.keystothevault.com