I recently hosted at a meeting of the Elite Ayrshire Business Circle held in the Showroom of Kitchens By J.S. Geddes in Kilmarnock, which included a cooking demonstrations and lunch from a top Milele chef. I spoke at the event about how to succeed in a slow economy and turn the downturn into an opportunity to improve personal productivity and business profitability and wanted to share with you an executive summary. The key to achieving this is to Shift Your Paradigms:
The Change Paradigm: Let me share my definition of crazy in today's ever more dynamic economic climate - Doing the same things you have always done over and over again and expecting different results ... Yip sounds insane but the majority of businesses are doing just that right now. As for my definition of insanity - trying even harder to do the same things over and over again and expecting different results. The world has changed, our economy has changed, and as business owners we must lead change in our organisations...
The Prosperity Paradigm: Your prosperity is directly related to your philosophy and not to the economy. We need to stop focusing our thoughts on things we cannot directly affect and have no direct control over, then communally complaining to each other about them or blame them for the state of our businesses. Instead, focus our thoughts on those things we can affect within our business. When you understand the cyclical nature of recession we can begin to grasp that now is when we should be investing in our team, our marketing, our company and ourselves, why?... because all our competitors are doing the exact opposite; "battening down the hatches" just trying to ride out the storm. Now is the time, we must take action and grasp this opportunity to streak ahead of our competition because you can Build A Great Business in Any Economy.
The Recession Paradigm: The cycle of recession is approximately every ten years and the catalyst for the start of the 2008 recession was the crash in the US Subprime mortgage market. Our economic growth is measured in Gross Domestic Product (GDP) which is the monetary value of all the goods and services produced within the UK borders in a specified time period. Overall GDP has fallen by just over 5% since 2008, which in business terms simply means supply is outstripping demand. Information which we can chose to hang ourselves with or we can choose to look at it in terms of massive opportunity, because inversely 95% of all the wealth in this country that was spent in 2005,6,7 is still being spent today and to get our share we must be better than our competition in all aspects of our business. If you want some of that wealth then you need to change your way of thinking and doing... NOW. Read my Blog on The Economic Paradigm and begin to understand the state of our nation and how we can change it.
The Banking Paradigm: Banking is a passionate subject but let's put philosophical debates about banking corporate structures, historical lending, investment decisions or even bonuses to one side, after all we cannot affect any of these things directly. What we can affect is bank lending... Yip I said we can affect it. Many owners tell me they can't wait to get back to normal... there is no more normal; normal as you know it has changed forever. We cannot on the one hand blame the banks for historical slack lending policies that got us into recession and then expect them to lend like they once did. Yes, risk assessments need to normalise and will, however as business owners we can no longer rely on our accountants or bank managers to tell us, or access our historical numbers. We need to know our numbers real time through Key Performance Indicators (KPI) and result indicators like weekly P&L figures, cash flow budgets... We need to learn about the Ratios that banks and investors like myself use to analyse investment risk because Healthy Ratios = Healthy Business
The Profitability Paradigm: The first paradigm shift we need to make is to realise that our goal in the modern economy is 'not' to sell our products or services; it is to Buy Customers. The cost to buy a customer is our "acquisition cost" or "cost per sale, a must know KPI because after all marketing is simply Maths... If the Maths add up keep doing it and we will turn your marketing cost into an investment. The second shift is to know and practice The No1 Marketing Rule... 'Don't tell them what you do; tell them what they get out of what you do'. The third shift is to understand that customer service and hiring team members is just other forms of marketing and that it is 6 times less expensive to market to current customers that to buy new ones. The fourth shift is to change your focus; Most business owners I meet measure 3 things: the amount of customers they have, the revenue they get from those customers and the resultant profit. These are all outcomes, so to truly maximise profitability we must focus improvements on the inputs that generate these results. Cutting costs will no doubt save you pennies, working on the 5 main inputs above your Gross Profit line will make you pounds. The key to profits is to divide to multiple and achieve the compounding effect by working on these 5 key areas. To learn more download my PDF eBook: How to Grow Your Profits or listen to my Youtube Video
The Leadership Paradigm: A business or team is nothing more than a reflection of its leaders. So before you ask yourself how can I get my team to improve, firstly ask yourself how I can improve as a leader. Leadership is all about people, where as management is all about processes. If then you are managing people then something needs to change and in my experience it is firstly always you. If I have not convinced you and you still believe it is your team; then ask yourself who hired them! If you think you have a good team and you just can't get them to be as passionate about the business as you are, then it is you that has not given them a greater purpose other than to turn up and do just what they need to do in order to collect a wage. The true question to ask yourself firstly is What is Leadership and then, why do people in my company actually follow me; through my position as the boss or through my passion as their leader to inspire them to live our values, be guided by our purpose and strive to achieve our goals and vision?
The Coaching Paradigm: Business coaching is all about leading change. It is a mixture of Personal Development and Business Development designed to maximise potentials at every level in and of the organization: Training means do as I teach based on a model. Consultancy means do as I say based on my recommendations. Mentoring means do as I have done based on my experience. All have place and benefit, however only coaching goes deep enough for you to understand how and why I do what I do. Only coaching can create a platform to break your conditioning to start internal change that will influence external change in your teams and in your business. Read My top 7 Reasons Why Businesses Succeed and my Coaching Guarantee
The Business Paradigm: People do not buy What you do; they buy WHY you do it.. To learn more take me up on my complementary business coaching session normally worth £375, and I 100% commit to help you when we meet.
