If you are reading this, then you obviously want a better business. You are interested in doing what it takes to grow both personally and professionally so that you can achieve the results you want in your life and business. ActionCOACH has helped hundreds of thousands of business owners all over the world achieve not only greater profits, but a better life through our proven system of business growth. What I am going to do is give you every bit of our system, just to reward your time in reading this magazine.
ActionCOACH trains you on several different formulas, all of which create the life and business that you want. We have The 6 Steps, The 5 Ways, The 4 Ways and BE, DO, HAVE. Within these four formulas are the keys to unlocking your potential as a business owner and achieving the life that you’ve always wanted. So here’s how it all works.The left side of this chart (figure 1) represents the path of every business owner as an entrepreneur through her or his life and whom you need to be to progress. We start out being employed by someone else. We then get struck by an entrepreneurial feeling, moving us into the self-employed category. As your business grows, you start to hire people, and you become a manager. You start leaving the manager stage when your business starts to run without your daily input. When that happens you truly become a business owner.
The next stage is to become an investor. You start to invest the profits from your business in other ventures, which could be stocks, real estate, or other businesses. You become a true entrepreneur when you start adopting the thoughts and ideas of others, as well as your own, and you create industries or innovate industries to become a key player. All of these steps require you to become a better person, your BE. Your business will never outgrow you, you must keep learning and growing to achieve the next level.
The bottom axis represents the steps of your business along the entrepreneurial lifetime. This axis highlights everything that you must DO to achieve a better business. Where you are on this axis is a direct reflection of the actions you take every day.
The primary step every business must achieve mastery, or control over money, product/service delivery, destination, and time. When those four areas are solid, you move onto the Niche part of your business.
This “niche” part is where you start to look at how you are better and different than all of your competitors and differentiate yourself in the marketplace. You accomplish differentiation through Unique Selling Propositions and Guarantees, both of which typically fall into the marketing and sales portion of your business. The best (and big!) way to know you have achieved this is when you are no longer competing by price. In other words, the cost of your good or service has become a very small part of why people purchase from you.
The next stage of a business life cycle is that of Leverage. This step is all about putting systems in place for your business that allow it to run smoothly without owner input. Systems are the key for every business to become self-sufficient because they help the owner to leverage her or his time. Simply put: Do the work once; get paid from it over the long term. Sounds great, doesn’t it?
Once the business has systems in place, it is about getting the right team members are in place to keep it running smoothly. With the right team in place, it is time to hire a general manager. Your business is running smoothly, growing consistently and is creating the cash flow that you will need in the investor stage.
As an investor, you are now all about gaining your large monthly profit-based income to work for you by creating more money. You start to purchase other businesses, rental properties, stocks and other investments that put your money to work. Investing is about using your money to create more money.
The results stage is where you start to enjoy the fruits of all your labor. You ensure a huge financial legacy for your family. You can take those dream trips you’ve always wanted. Most important, you have the freedom to do what you want to do. At the results stage, money is abundant, and you will always have enough.
Now that you understand the basics of the business and investor life cycle let’s look at how it plays out for the owner. What do they want to have and how much money will they make?
Between Niche and Leverage is where you start to get exponential profit increases. Around that time frame is when your business is running efficiently, and most of the work you’ve done starts to pay off.
Now that you’ve seen how the life cycle and steps work, and the return that you’ve achieved along the journey, you are probably wondering how to achieve the next step in your business. A proven process exists for doing just that, and it is used successfully in businesses all around the world.
I am talking about The 5 Ways and The 4 Ways. The 5 Ways is a formula that allows you to achieve a 61.7% increase in your profits, and The 4 Ways are about systematizing your business to run without you.
The 5 Ways
In a nutshell, here is the formula:
Leads x Conversion Rate = Customers
Customers x # of Transactions x
Avg. $ Sale = Revenue
Revenue x Net Margins = Profits
If you want to see a dramatic increase in your profits, start tracking your 5 Ways today. Get a solid count on the number of leads your business receives during an average day, and then figure out how many of them bought from you. Those two numbers give you your conversion rate. Then you can determine your number of Customers for the formula. To get more customers, you must focus your energy on Lead Generation, or marketing, and on your Conversion Rate or sales process.
The next step is to track how many transactions they have with your business, and what they spend on average per transaction. If you want to increase your revenues, focus on getting your customers to buy more each time they show up, and convincing them to come back more often. These two areas also fall into your sales and marketing parts of your business.
The fifth area is your Net Margins, or how much is left after you’ve covered all your expenses. Most business owners make a mistake here by not including a salary for themselves. You are time as the owner has a cost and needs to be considered when looking at your Net Margins.
There are three categories to improve for better margins. They are efficiency, budgeting, and costs per unit sold, which are functions of management.
I’ve seen all of The 5 Ways work in businesses in which I’ve worked and even in my own business. Your focus on each of these five areas will exponentially increase both your profits, and the amount of cash available to your business.
The 4 Ways
There are only four categories to look at when it is time to systemize your business and leverage your time as the owner. They are People and Education; Systems and Technology; Delivery and Distribution; and Accounting, Testing, and Measuring.
People and Education allow you to develop training programs and hiring processes that attract, retain, and train your employees to be the best. Employees are a must if you want to leverage your time and ability to make money. Once you have employees, it is your job to ensure that they are growing and achieving more each day improving turnover and helping your company grow.
Systems and Technology address what sort of technology and systems are already out there that can allow you to leverage your time and money. It could be more cloud-based systems or communication systems. It could be in developing a mobile app, or creating a better work system. All sorts of possibilities exist in this category.
Delivery and Distribution involves how you are delivering your products and service out to your clients and customers. One area that I’ve worked on to improve in my own business is getting my client to meet on the phone, instead of in-person gatherings. Phone meetings save both of us huge amounts of travel time and increase my capacity to take on even more clients.
Another example of improving product delivery is Amazon. The e-commerce giant is now offering same-day delivery in certain markets and wants to deliver goods via drones. Be inventive when it comes to improving your product and service delivery.
The fourth area is in Accounting, Testing and Measuring; basically, how are you receiving and understanding the numbers in your business. By testing and measuring everything you do, you can assess if it has positive or negative impact on your business. With that data, you can make decisions faster on what to get rid of in your company, and what to keep doing. Look at how you can automatically track and account for things. Tracking could involve getting some additional phone numbers to track different parts of your advertising, or creating different offers to see where leads originate. Again, it is all about automating the accounting and tracking in your business, and then having that information flow through to you in usable formats.
As the owner of your business, your job now is to look at each of these areas, so you can start to see the potential and growth of your business. You are probably also wondering how long this process takes. As with many things in life, the answer to that question depends entirely on how much time and energy you put into achieving the next steps. I do know, based on client results, that if you commit 4 hours to 6 hours of work on this per month, you’ll have reached the Results stage in 4 years to 6 years.
Think of that: Just 50 hours to 60 hours of work on your business each year, and you can dramatically change your lifestyle and the results you see. That is the power of working within this proven system for growth. Be encouraged! Get to work on your business and achieve all the untapped potential within your business.
About the Author
Andrew Van Horn is best summed up in one word: Abundance. Abundance simply means having enough time and money to do the things that you want to do. As an ActionCOACH Business Coach Andrew helps owners all over the area in building a business that creates abundance for the owner that can be passed down for generations. He loves helping businesses grow into their full potential because a growing business creates jobs and money that can bring about positive change in the area. His goal is to help 1,000 businesses in the next five years achieve abundance.