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