BUSINESS SUCCESS
3
Simple Keys To Business Success
I love discussing business with entrepreneurs. These discussions often lead me to find new ways to frame and simplify issues that entrepreneurs struggle to overcome so that they can take action. At a recent dinner with a client, it dawned on me that it only takes three things to be successful at business:
1. Figure out what the market needs 2. Find a way to do it profitably 3. Tell everybody about it
I said it was simple, but it is not easy! You would be amazed at how many times we ignore one or more of the three or get them out of sequence.
WHAT THE MARKET NEEDS I have clients who perform market research and even they will tell you that potential customers lie to you about what they want. However, some of us can be successful at this skill by having a great gut feeling for what the market needs; others do it by trial and error. One of my best examples is a client who recently started an Etsy store and, in one year, drove it to $ 3 million in revenue and 15 % bottom line profit( yes, after real owner compensation, too!). His ability to do quick testing in small runs of what the market wanted prevented him from making a big bet too early that would have wasted capital.
• Are you selling what you make or do? Have you put the effort into what your customers really want?
• Are you where you need to be? Do you need to be in a larger geographic area or should you focus on dominating a smaller market?
• Have you identified the ideal range of customers to focus on or are you trying to be all things to all people?
FIND A WAY TO DO IT PROFITABLY I personally think this is the easiest task. Using our Simple Numbers Profit Model, we have simplified the key drivers of profitability rates and volume that are needed at each stage of the business. More importantly, we can set key production targets for direct labor as well as management labor. Our model also flushes out whether or not you have the willingness to do what is necessary to be profitable and create a sustainable business. Being a successful entrepreneur is often more about eating your vegetables than getting dessert every day.
• Are you setting prices based on the market and then figuring out how to make the cost fit so that you can make a profit?
• Avoid setting your price by taking your costs and adding profit. You will never challenge your team’ s efficiency and value that way. It is a great way to give away your expertise and charge for your ignorance!
TELL EVERYBODY ABOUT IT Too often, marketing confuses activity with accomplishment. We take a real netdollars approach to evaluating effective marketing. I may not be a marketing professional that can tell you what to do, but I can keep score. Most marketing efforts in today’ s world are paid back quickly so that measuring success rates is easier now than ever. But you may not like what it says.
My Etsy client is a great example regarding this skill. The owner had a
BY: GREG CRABTREE, CPA, CEO, CRABTREE ROWE & BERGER, PC
great sense of the market, but he did not let that sway him to over bet. He did small test runs to make sure he could attract the amount of activity he needed to make a product run successful. As in every business for products or services, you need a balance of rate and volume. I can have a great rate but not enough of it, or I can have a lot of volume at a bad rate. Both will kill me.
• Marketing in today’ s world is more like R & D spending than the old days of media buys. Patiently test in affordable increments what works before you go all in.
• Be a subject matter expert. If you have done your market research into what the customer really wants, you have no excuse to not be a content leader in your product or service area.
• Customers love it when your message and stories resonate with their unmet needs. They can easily ignore descriptions that go“ blah, blah, blah.”
If you find you have not done your homework on these skills, hit the pause button, address all three, and you will find clarity for the next stage of your entrepreneurial journey! +
Greg Crabtree, CPA, is the author of Simple Numbers, Straight Talk, Big Profits!( www. simplenumbers. me). Greg is also the CEO of Crabtree Rowe & Berger, PC, a CPA firm dedicated to using consulting and tax advice to elevate entrepreneurs so they can run profitable, wealth-building businesses that make an impact in their communities.
24 | SPRING 2017