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If you’re in business, or thinking about getting into business, it’s your job to understand the fundamental principles of how every successful business person works, before you begin your journey to buy, grow or expand. Sometimes to do that, you need to educate or rebuild you understanding of how to operate and grow a business from the ground up.

Business is one of the most complex, multi-faceted areas of human experience, and trying to understand how to grow a business can be as adventurous, complex, exciting and daunting as flying to the moon.

2. Improving your business:How to grow it!

Buy, Grow, Value,

Sell... a business

Grow your existing business

to make it systemised,

sustainable and profitable.

This 4-page lift out will give you a back-of-the-napkin method you can use to grow or expand your business with confidence and simplicity – whatever the field, industry or service you are in.

Whether you’re flying solo or running a multi-billion dollar enterprise, this is a formula for growing and sustaining a profitable business, and just like baking a cake, if you take any one of these ingredients away, you have something other than a business. If you do these functions well, your business will thrive. On the other hand, if you do them poorly, your business is destined to fail.

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3

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5

Roughly defined, the essential and universal factors of a successful business are:

firstly delivers or creates something of value that

others want or need

at a price they’re willing to pay, in a way that

satisfies the buyer’s needs and expectations and

provides the business a sufficient financial return to make it worthwhile for the business owner to continue operating.

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So let’s break them down, these 5 essential and universal factors…

In a nutshell, a successful business is simply loved or needed by others. Every time your customers buy something off you, they’re deciding whether they’ve received more value than anything else the money in their purse could buy them.

Of course everyone has different perceptions of value, but typically, the following common values are used when evaluating customer satisfaction:

1. Value creation Work out what people need or want and then create it. Fill the gap.

2. Marketing and promotion Build a demand for what you’ve created and attract attention

Speed – how quickly was it delivered/does it work?

Reliability – will it do what it says or what I want?

Effectiveness – how well does it work?

Ease of use – how much effort does it need?

Flexibility – what other functions does it do?

Status – does it affect the way others perceive me?

Appeal – how aesthetically attractive or pleasing is it?

Emotional – how does it make me feel?

Cost – how much do I have to part with, and what’s hidden?

A successful business

is loved or needed by

others.

“Eyes open. The first thing you see is the brand on the alarm clock. It stares back as you fumble for the snooze button. 3000 messages a day. Could that figure be real or is it just marketing myth?” Gruen Transfer

Marketing helps consumers recognize or make a choice between products and/or services you offer. It also notifies the consumer in terms of new additions/products/promotions, and it helps the company or organization sell its products, service, or idea to the public.

Within the last century, the concept of marketing has exploded from an industry worth millions to one worth billions and fast approaching trillions worldwide. Marketing evolved from word of mouth to print, radio, television and online advertisements. It is estimated that the average Australian sees 3000 of those advertisements every day! I would guess 99.9% of those advertisements have come through within the last 100 years.

So when you’re building demand or attracting attention to your products and/or service, ensure that you’re prepared and have a solid strategy in place to gain a maximum return on investment.

Most business owners are not marketing experts, so don’t be afraid to seek help to get the right message across.

Overall, when you’re growing or expanding your business, remember that the things that are quick, reliable, easy and flexible are convenient. The things that offer quality, status, appeal or emotional influence are highly dependable. We know that consumers love convenience, and will return over and over again for good service, but value to the owner is a different kettle of fish.

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3. Sales People don’t like to be sold, but they love to buy. Convert prospects into paying customers.

4. Value delivery Deliver what you promised your customers and measure their satisfaction.

Have you ever thrown a party and no-one shows up? In business, it happens all the time. One critical point to make before you start designing a strategy or spending time or money on growing your business is to know how much value you, as the business owner, will receive in contrast to how much you’ll be investing in growing your business.

Return on InvestmentReturn on Investment (ROI) is usually thought of in terms of money; if you invest $10,000 and you collect $1,000

in profit, that’s a 10% return on your investment. If your ROI is 100%, you’ve doubled your initial investment – pot

of gold! But, just like preparing for a party, the usefulness of ROI extends far beyond money. It’s a crying shame

to see how many business owners do not calculate their Return on Invested Time, and if they were to analyse

the return vs. the cost of their time and sanity, I’m guessing most activities (like a party that no one shows up to)

would not be worth it.

Leadsx

Conversion Rate=

New Customersx

Avg $ SpendX

# of customer Transactions=

Turnoverx

Margins=

Profit

4,000x

25%= 1000x$100X2=

$200,000x

25%=

$50,000

4,400x

27.5%= 1210x$110X2.2=

$292,820x

27.5%=

$85,525 That’s more than a 10% increase!

If you increase Leads, Conversion Rate, Avg $ Spend, # of Transactions and Margins by

10%, you’ll find more than a 10% increase in your profits. Remember, the 5 Ways to Increase Your Profit equation

works every time!

The sales & profit equation

So a good point to remember is that when you’re growing your business, the return on every investment is always directly related to how much the investment costs. The more you spend, the lower your return. Also, every estimate of return is speculative – meaning nothing in this world is a sure bet, so always take into account the risk of something going wrong before making an investment, no matter how high the potential ROI might be.

The most important factor in growing your business is understanding yourself! Every day you will be presented with an opportunity (or more) to add value to your business. This means that you don’t have to embark on a massive project every day of the week, or work 24/7, just to burn out. Rather, invest your time, manage it efficiently and effectively: be productive in the hours you invest in your business. Most importantly, if you do something every day on the five essential and universal factors of a successful business, you will continue to see your business grow without much effort.

Well, that’s a snapshot of what it takes to grow a business. Running, let alone growing, your business can be a challenge. Some days are diamonds, and some days are so terrible that you wish you never got into it in the first place.

Be innovative, be modern, change, try different techniques and think of new ideas to keep going. Your persistence will eventually pay off.

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This four page lift-out does not take into account any person’s or business’ particular objectives, needs or financial situation. This information was prepared as an information service and without assuming a duty of care. It contains general information only. Before you proceed with buying a business you should seek the advice and guidance of competent business broker, legal and accounting professionals.

If your business doesn’t:

• create value for others...it’s a hobby.

• attract attention...it’s a flop.

• sell the value it creates...it’s a not-for-

profit.

• deliver what it promises...it’s a scam.

• bring in enough money to keep

operating...it will inevitably close.

Words from the wise:

5. Money Ensure that you are banking enough money to continue growing and making your efforts worthwhile.

To sustain growth in a business, you will be fundamentally relying on two additional factors; people and systems. One needs to drive the other. Essentially, every business is created by people and only grows, expands or survives by benefiting others in some way.

As a business owner, you must understand how people think and behave, while systems on the other hand, are the invisible structures that bind a business and its people together. By identifying and understanding the core processes that can be reliably duplicated in your business, it is possible that you will apply the power of leverage through people and systems. But don’t be mistaken… managing yourself, others and setting up systems to run the business requires constant perseverance and attention.

1. Create a cash-flow budget - manage your revenues and expenses proactively.

2. Know the sensitivities in your cash flow - volumes, cost of goods sold or overheads will have the most impact.

3. Manage the credit you extend to your customers - consider discounts for early payments.

4. Keep your payables up-to-date - use an ageing schedule to show how much you owe to whom etc.

5. Reduce expenses - look for ways to cut back.

6. Use credit effectively - Line of Credit can be used to meet short term needs.

7. Use surplus cash flow - assess how much money you need set aside for emergencies.

Finally, you are running your own business and you should be proud of

what you have achieved. You are part of a global community of lively,

creative, dynamic, spirited and inspirational men and women who are

providing genuine opportunity for others. What amazing industry and

opportunity! Get Zooming and…GROW your business.