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Business Oracle

Be Smart About Your Business

Nick Devine, founder of The Print Coach, lets us in on a simple way to be smart about your business and how Dragons' Den has shown us which areas of business need investigating

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Most business people could solve any other business challenge if they had certainty around their ability to attract ideal clients on a predictable and scalable basis, which is why following a plan is vital

The five step business plan

The internet is awash with courses, books, and software to help you create a business plan. Some of these tools can be extremely helpful if you are considering starting a brand new business. Most are not really effective when it comes to creating growth plans for an existing venture.

Television shows such as Dragons’ Den in the UK and Shark Tank in the US dramatise the idea of entrepreneurs standing in front of a panel of seasoned investors in an effort to raise funding for their business. When you watch enough episodes of Dragons’ Den you observe something that is consistent through every pitch Q and A. The dragons want to investigate two areas of the business: (A) the financials, and (B) customer development. The money does not exist unless you can get the customers.


When you watch enough episodes of Dragons’ Den you observe that the dragons want to investigate two areas of the business: (A) the financials, and (B) customer development
 


Customer development is the engine that drives every other part of the business. It is the ability to find, win, keep, and grow ideal clients at premium pricing. The five step business plan that is explained in this article is focused exclusively on customer development.

Customer development is the engine that drives every other part of the business


Most business people could solve any other business challenge if they had certainty around their ability to attract ideal clients on a predictable and scalable basis. This business plan framework will focus on the five customer development pillars.

1: Profit power

The purpose of this pillar is to maximise every profit opportunity in your business. This is where you answer questions such as:

  • How do we follow up on our estimates?
  • How do we deal with inbound enquiries so that we maximise the sales opportunity?
  • How are we using cross-selling, up-selling, and down-selling?
  • How are we training our people to deal with price objections?
  • Have we trained our people to understand the difference between gross profit and net profit? For example, if a business is making 10 percent net and the account manager gives a 10 percent discount, they have wiped out all of your profit on the deal.

2: Connected customers
 
There are two types of customers you can have in your business.

Transactional customers: These are the customers who are only interested in how low you can get your price. They will push you hard in terms of delivery and quality but they do not fully value what you offer them. You are often one of three different suppliers they are considering for different jobs.

Connected customers: These are the customers who value what you do and are willing and able to pay for it. They tend to view you as their single source of supply. They look to you for advice when they are considering new projects. They value the relationship they have with your business because it adds value to their company.

If you want to protect and grow your connected customers, you have to take specific actions to make that happen. Here are some action points to consider:

  • Have we segmented our customer base using 80/20 principles?
  • Have we clearly defined and documented the level of service we are providing to our top five to ten accounts?
  • Have we decided what actions we are going to take with the bottom 50 percent of our customers who typically contribute about 5 percent of gross revenue—and are often loss-making?
  • Have we built multiple relationships across different areas of the business in our top ten accounts?
  • Have we implemented a client appreciation system for our best accounts, incorporating ideas such as personal notecards and small, thoughtful random gifts?

3: Simple selling system

Everyone agrees that new business is the lifeblood of every company. If you do not have a predictable and scalable selling system, you can never have certainty about where your next new account is coming from.


If you do not have a predictable and scalable selling system, you can never have certainty about where your next new account is coming from



Here are some areas to consider:

  • Have we got an account management system in place to develop existing accounts into larger accounts?
  • How are we leveraging the power of referrals and testimonials in our company?
  • Have we defined our ideal client and are we working off a written list of companies that meet that profile?
  • Can we clearly articulate what our difference maker (USP) is when we are competing against price-cutting competitors?
  • Are we effectively using social selling, with a particular focus on Linked In?
  • Do we periodically run campaigns to reactivate lapsed customers?
  • Do we use a clearly defined sales process that anybody in our sales team could explain on an A4 sheet of paper?

4: Proactive sales management

Sales management can mean different things in different companies. In the printing industry it should include customer service/account management/estimating and new business sales. In summary, it incorporates anybody who has anything to do with bringing revenue in the door. As sales management is so important when it comes to generating revenue, it is critical that you have a well-defined proactive sales management system in place. Here are some things to consider:

  • Do we have an effective sales compensation system in place that clearly communicates the priorities of the business?
  • Do we have a system in place to effectively find, hire, train, and retain great people?
  • Are we using an effective sales pipeline system to manage our prospecting workflow?
  • Are we using an effective dashboard to proactively track the key numbers in our sales process?

5: Strategic acceleration

Strategic acceleration is your ability to align everybody in your business behind the most important goals in your business. It is a combination of business planning, goal setting, project management, and time management. Strategic acceleration informs your team members what needs to be done in the business, how it is going to get done, and when it needs to be done by. Here are some areas to consider:

Are we using a simple business plan with clearly defined objectives that everybody understands and is committed to? It is important to note that your financial forecast is not your business plan. Your business plan is the mechanism by which you achieve your financial forecast.

  • Is everybody working on a handful of clearly defined objectives during each 90-day cycle?
  • Have we trained everybody in our team to be more effective when it comes to how they use their time?
  • Are we using an effective communication/meeting rhythm to hold people accountable, solve re-occurring issues, and communicate updates?

Recommended action point

If you are trying to implement this business model by yourself, I would recommend that you focus on one area at a time. Pick one of the five customer development pillars that you think will have the biggest impact on your company, and focus on that first. Next, select three of the questions listed and answer them to your best ability.

Brainstorm with your team if necessary. Next, set a small target that is achievable within the next 90 days based on your implementation of the tactics you are going to use.

If you would like practical help you can request a free customer development strategy session with me. I am offering a number of free sessions to qualifying companies. You must apply within 28 days of the magazine publishing date. After the strategy session you will know how to apply the five step customer development system to your individual company situation, so you can sell more at higher margins.
 
To find out more, send an email to Nick@theprintcoach.com and put the words ‘Customer Development Strategy Session’ in the subject line.


Nick Devine is the founder of www.theprintcoach.com, helping print, packaging, and wide-format companies create predictable sales and profit growth
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