My primary concern is your business’s financial performance, but before diving into those details, we need to examine three crucial areas first:
- Sales Conversions
- Marketing ROI
- Leadership
If these three areas aren’t performing well, the rest won’t matter.
Sales Conversions
When I meet with a prospective client for the first time, I ask, “How well do you think your sales team converts leads into customers?”
If you’re not confident in your sales team’s performance and are spending a lot on leads that don’t become customers, it’s time to consider a sales trainer. Fortunately, I have a robust network and can connect you with a strategic partner.
As a business owner, you might excel at sales but find it challenging to transfer your skills to your team. This isn’t uncommon. Even the world’s top athletes don’t always make great coaches. Like you, they have an innate ability with people that not everyone possesses. Fortunately, this is a skill that can be learned.
Alternatively, you might be a business owner who’s excellent at your craft but struggles with sales. A sales trainer can help build a process and develop scripts. (Remember, scripts are guides; they’re not meant to be read verbatim.)
Marketing ROI
Marketing is another critical area that should be closely tracked. How often have you paid for something like Facebook ads and gotten zero results? Sometimes, it’s not the platform that’s the issue; it’s the type of ad that was run. And it’s not only the ad; it’s how the ad captures the lead.
There’s more to marketing than just running an ad and hoping it works. Several pieces must be in place for any marketing effort to succeed. Whether it’s a website, Facebook ad, Google ad, social media content, or anything else, the execution must be done correctly to see results. This is where we might need to consider not just one type of marketer but specialists in branding, content marketing, website design, and copywriting.
Leadership
You can’t lead a horse to water, so consult an expert or hire new staff if your management team is ineffective.
Employees don’t want someone to tell them how to do their job. They want a guide and the freedom to develop their way of performing the job in a way that works for them. This kind of freedom allows them to excel in their roles.
If you may not be this guide or have staff that could use some training, it’s time to bring in someone who can help build these best practices.
Next Steps
When these three areas are performing well, we can start to look at your company’s financial performance, focusing on:
Profit Drivers
- Which product or service has the best Profit Margin
- How much of your revenue is spent on the cost of goods sold?
- Payroll Expenses and Owner’s Pay
- Marketing Expenses as a Percentage of Revenue
- Overhead Expenses
- How long does it take for customers to pay you?
- How long does inventory sit?
- Large Purchases for Your Business
- How long does it take you to pay your vendors?
- How are you managing Debt?
- Cash Reserves
- Owner’s Investment/Draws
Addressing these profit and cash flow drivers will give you a comprehensive understanding of your company’s financial health. This will set the stage for the fourth and final stage: control.