The 3% Solution for Business Success ~ part one

Part One

We've long known that true financial independence only occurs for about 3% of the population. Similarly, I believe, that only 3% of all registered businesses ever achieve their potential greatness and success.

Some businesses let small issues take over while others become mired with a lack of focus. Some even let world economies dictate their prosperity. An elite group of entrepreneurs and business people chart their own path and create their own success. This group practices what we call "3%" behaviours. These behaviours separate them from the other businesses in their industry and create unparalleled success.

What are these 3% behaviours? What secrets do these successful businesses use?

Take Strategic Action

Have Solid Structure

Resolve Issues creatively

Eliminate Chaos

Embrace Opportunity

People, Product, Profit (focus on)

Elevate staff knowledge

Revise and review plans

Create momentum

Evaluate staff

Niche products or service

Take time to plan

These next few articles in BC Profit will reveal the top 5 behaviours and how to use them to your advantage.

Behaviour one: Take Strategic Action

While critical to success, this is the least common trait we have found amongst business owners. Most often, owners or managers find themselves constantly fighting to keep their heads above water when it comes to "things to do". Examples of tasks that seem to bury us are e-mail, telephone calls, unforeseen issues, internet searches, etc.

The reason we get buried in these tasks is that they are never ending. Just when we finish one email response another comes in. Strategic Action means doing things smarter by applying rules and protocols to how we do what we do.

As leaders we have to stop exercising reactive action and start utilizing strategic action.

One of the simplest ways to make the switch is to pre-plan what you are going to do each day, before the day starts. If you are not a list person and this is a new or unproven concept to you, start by planning a single day. If you are seasoned list person tackle three to five days.

How To: To make a list system work for you, apply some strategic logic to your list.  

Start by writing out a list of the key (bigger) tasks that need to be done. (Use a white board or flip chart)

Once you have the list, sort the items based on the following criteria:

1)      The Last Day Test

If I were to go on extended holidays tomorrow, what items on this list would HAVE to be done?

These are the items that must be at the top of the list and should be performed early in the day when you have the most energy and focus.

2)      The Financial Test

What items will yield me the greatest economic return of my time?

These items may be tied in importance to the Last Day items. They should be items that yield direct financial benefit such as proposals, invoicing, and customer follow up.

3)      The Hand-Off Test

What task could others do more economically than I could do it myself?

Entrepreneurs often get caught up in the old adage "no one can do it as well as I can". In fact, a good professional can often do it both as well and faster. This can save you time and money and allow you to focus on the top two category items (above).

To determine whether a hand-off is practical, follow this guideline:

Determine the value of your time to complete a task. This is not what you pay yourself, its what you client pays for each hour of your productive time and is reflected as follows:

Revenue per hour of my time, times the number of hours required to complete a task 

R x H = Time Value 

Using this equation, lets assume I am building my own website. I know that it takes me about 2.5 hours per page and I want to build 2 pages. The time value for me to build these two web pages is: 

Billable rate x hours = cost

150.00/hr x 5 hours = $750.00 

The hand-off comes when I either hand off the task to one of my staff who has web skills, or hire a contractor, for example:

Contractor rate x hours = cost

30.00 /hr x 5 hours = $150.00

In this scenario, the direct benefit of handing the task off and billing my clients for my productive time is $600.00 in net revenue.

Always consider the value of what you can do compared to the cost of others performing the same task and wherever feasible hand-off high cost, low yield tasks.

4)      The Real Value Test

What could be dropped with little or no consequence?  

Once you have sorted and valued your tasks, it's time to start looking at what you and/or your staff do each day with a critical eye. What tends to happen over time is that we take on new tasks, services or client protocols without looking at what we currently do, what has value to the customer, and what we could easily stop doing that nobody would notice.

I am not suggesting you finish this article and immediately set about cleaning house on all the things you think are low value. Instead, look strategically at lower value aspects of your business and then ask you clients what they need to be satisfied.

You will find advocates for every service you offer, so be strategic about which ones you drop. For example, if you have 500 clients and only 2 need a return envelope with their statement, I would go with the other 498 as the defining factor. Stuffing the envelope may seem like a low impact activity to your bottom line, however, when you look at it critically we find:

500 envelopes x 3 seconds per envelope + 54 cents per envelope = a cost of 270 for the postage, a cost of 15.00 per month for the envelopes and a cost of 15.00 per month for the time to stuff the envelope. The total cost per year is: 3600.00.

If you offer online, electronic or telephone payments this cost may not need to be incurred.

Regardless of your perceived value of an offered service, always ask your clients what they think of the change before you do it.

Then, before the change occurs advise your clients ahead of time. A good rule of thumb is to issue a change in service notice 3 moths prior, send a follow up 2 months prior, a final notice a few weeks prior, then drop the service.  

In the next issue, we look at how to take strategic action when it comes to competition in your marketplace or industry.