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10 Danger Signs for Business – Part 1

danger We’ve heard that diagnosing a medical condition early greatly increases the chances of successful treatment. The same is true for our businesses – we want to spot the minor issues so they don’t become major problems.

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Cash to a business is like blood to our bodies. It has to continue flowing or we won’t survive. As a small business owner, the bottom line is that you can’t run out of cash. So you have to know how to diagnose and treat the source of the ailment before it spreads. With that in mind, here are ten signs that your business may be heading for trouble:

#1 – Lost market share

Your sales may be growing, but your share of the market may be falling. Are they up because you’ve increased prices? Is the growth of your sales keeping pace with the growth of the markets you serve?

Market share is precious – among other things, it provides leverage to raise prices as your costs increase. As competitors enter your market, you have to work even harder to maintain (and hopefully increase) your share.

#2 – Declining customer counts

Your sales may be holding steady, but fewer and fewer people are making purchases. Your remaining customers are spending more, possibly because of price increases. There’s nothing wrong with that, but you have to find a way to attract new customers because a certain amount of customer attrition is natural.

We don’t want our customers to leave because they’re unhappy. But you can’t make everyone happy all the time so even that will happen. We’ll also have customers move away, pass away, grow out of our product or service, and the like.

#3 – Low repeat and referral business

Many businesses actually lose money to get a customer for the first-time. If they break-even, they’re very happy. It’s the follow-up purchases that make a difference to our bottom line.

A healthy percentage of repeat and referral business also shows that your product or service is still meeting the needs of a core base of people. And these people are the ones who will refer other people to you, which is much less expensive than depending totally on advertising to grow your business.

#4 – Declining sales

Right now, a lot of businesses are experiencing this. It may have nothing to do with you – it may be your industry that is experiencing trouble. So you have to ask yourself … is this a long-term trend or is it cyclical? That’s the first thing you have to determine.

Next, ask yourself, will my industry recover? Some industries were facing challenges even before this recession. It’s only accelerating the long-term trend. Other industries will do just fine coming out of it. You have to know which one applies to you.

Once you’re satisfied that your industry will survive, you have to look at your own business. A lot of shake-out is happening even in healthy industries. Isolate whether it’s a problem with your business or the industry as a whole to know your best strategy.

#5 – Disproportionate sales to a small group of customers

Picture this extreme situation – all of your sales come from one customer. You’re totally at the mercy of that customer. It’s like being an employee without the safeguards that go with employment!

Generally speaking, if more than ten percent of your sales are to one customer, you may face trouble at some point. Five percent is even better. Bigg customers are great. But serving a bigg number of customers leads to bigg success.

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Thank you for reading our post today. Join us next time when we talk about five more early warning signs of trouble ahead in your business. Until then, here’s to your bigg success!

 

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00348-031109.mp3

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Are You Afraid of Success?

afraid We won’t name names. However, we’ve all seen it – usually with a celebrity – a person who is on the verge of bigg success, but then they go through a meltdown.

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We wonder what could have caused it. Usually, it’s a very individual thing but there are some common reasons:

#1 – Self-doubt
You’re not sure that you can handle bigg success. You worry about what you don’t know. You dwell on what you don’t have (a common worry is not having the right degree). You tell yourself all the reasons why you don’t deserve this level of success, even though you’re so close to it.

#2 – Fear of loss
If you become more successful than your friends, what will they think? Will they still be your friends? Will they be jealous of your success? You know the answer to these questions already. What kind of friend wouldn’t be thrilled with your bigg success?

#3 – Fear of embarrassment
This fear is a carry-over from childhood – that adolescent fear of standing out from the group. You’re afraid of what people will think if they see you fail. Which leads us to …

#4 – Fear of failure
You may think that it’s better to have never experienced bigg success, than to have it and then lose it. Somehow it’s better to never get there. But why do you assume it will be fleeting?

The net result is that we talk ourselves out of succeeding bigg. We accept that it’s better to be part of the crowd than to blaze our own trail. We feel more comfortable. It seems less risky. But we’re wrong!

How to conquer your fear of bigg success

#1 – Self-talk is so important.

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marylynnAs a first-time entrepreneur, fear has crept in on occasion. I’ve been lucky to have George around. He’s helped me understand that negative self-talk isn’t going to help you succeed. You have to turn it around.

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georgeEven as an experienced business owner, I still have to battle that little voice that impedes bigg success. You just have to constantly keep telling yourself why you will do it.

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Think of all the things you’ve done right to get this far. Remind yourself of the obstacles that you faced and how you overcame them. Focus on the things that have already gone your way.

#2 – You don’t have to get it perfect; you just have to keep going.
It certainly hasn’t been perfect up to this point, has it? So why would it have to be perfect from here on out? Enjoy the journey. Enjoy the growth you’re experiencing.

Every time we reach another plateau, we celebrate our victory. Then we look back and realize the victory had already occurred. We grew. We learned so much. That’s the real joy of bigg success!

#3 – Success comes one level at a time.
Sure you have to keep your eye on that ultimate goal. But you get there one step at a time. You only have to take the next step.

You’ve learned enough to know how to do that. Perhaps more importantly, you’ve already learned how to find out anything you don’t already know.

#4 – Surround yourself with people who have made it.
We can’t possibly over-emphasize this point. Develop a support network of mentors and coaches. People who were once where you are now, but are now where you want to be.

Don’t be afraid to take those little steps that lead to bigg success!

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Evidence shows that more and more of us are running two businesses simultaneously. Next time, we’ll get some tips from an expert who’s doing just that. Until then, here’s to your bigg success!

 

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Are You a Victim of Your Own Success?

stress You’ve made it! You’ve arrived! You’ve reached that next level of success! You’ve achieved your dream!

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But you’re swamped. Now, you have a seemingly endless list of things-to-do. And it all just keeps coming. Minute after minute, day after day, week after week. It’s sheer chaos.

You find yourself busier than ever. You’re more successful than ever. But are you happier than ever?

It seems that you’re a victim of your own success – too much to do, too many clients, too many constituents. So what can you do about it?

Congratulate yourself

Take a deep breath and a little pause. Enjoy it for a bit!

Get away from it all for a day

We know … you’re too busy. But here’s the thing – you’re too busy not to get away because, on your day away, you’re going to contemplate. What’s most important? What’s least important?

After you’ve thought about those two things:

Hire an assistant, outsource, partner, joint venture … you get the idea

Delegate – in some way, shape or form – those things that aren’t most important.

You might be asking, “Can I afford to hire someone?” But you’re asking the wrong question. The question really is, “Can I afford not to?”

Because the most important things – the people who are most important for you to spend time with, the projects that only you can and should do – will get pushed aside by the less important things if you don’t take this step.

Set the expectations for the people in your life

You need to establish boundaries for all your people. You may set certain times when you’re available to employees, vendors, and even customers. We think customers can’t be trained, but even they can. 

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georgeIn one of my early businesses, my second biggest customer was constantly calling with demands for immediate service. Finally, I presented them with an option – they could work within our time frame for the price we negotiated or I could offer them quicker turnaround for a higher price. They chose the better price!

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Finding your model

Now you’re only working on the most important things and you’ve communicated your boundaries to the most important people in your life. You’re ready to do those things you do in the most efficient way possible.

So let’s look for a model. Think about a manufacturer’s assembly line with products coming down it. What are your products?

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marylynnFor us, it is shows to produce. Articles to write. E-mails to return. People to reach out to. Products to create. Services to deliver.

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Your production cycle may flow over an hour, a day, a week, or a month. Think about all of the important things you do – that’s your product – and engineer your processes to move that product down the line in the most efficient manner possible.

Engineer your processes

What is the best way to do it? Think about it logically. Step back and look at it again. Walk yourself through the whole process, step-by-step as it exists today. Now, start looking for ways to save little bits of time.

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georgeOne of the guest speakers for my class became a billionaire by turning his little business into a Fortune 500 company. One of his secrets was finding ways to get more done with the same people. For example, they discovered a way to change how they labeled packages for shipment. It saved them 55 seconds. That’s time they could spend on something else!

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So if you find yourself a victim of your own success, start with effectiveness – make sure you’re doing the right things. Then work on efficiency – doing those things the right way.

Doing the right things the right way … before you know it, you’ll be an even bigger success without being victimized by it!

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Get the tips and tools you need to be a BIGG success!
Subscribe to the Bigg Success Weekly – it’s FREE!

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Next time, we ask, “Are you afraid of success?” Until then, here’s to your bigg success!

 

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Moving Beyond Personal Productivity

One More Thing to Add to Your Schedule

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If You Want to Increase Your Profit, Don’t Put Your Customers First

Some professors at Harvard developed a concept over ten years ago called  The Service Profit Chain. This concept is designed to increase your profits year after year.


The Service – Profit Chain

Employee satisfaction leads to customer satisfaction. Satisfied customers lead to revenue growth. Revenue growth leads to profit growth.

Reinvest a portion of those profits into things that will make your employees even more satisfied, and the chain never breaks.

So your profit keeps going up year after year!

Employee satisfaction
It starts with satisfying your employees. Many business owners focus on satisfying their customers first, but that’s putting the cart before the horse!

If you don’t have satisfied employees, you won’t be able to satisfy your customers. Work from the inside out, because your product or service is built around those who create or deliver it.

So if you want to increase your profits, find out what will make your employees happy!

Happy employees stick around
It’s expensive to find and train new people. New people cost you money until they get through the learning curve. They cost you money because your established employees have to help train them, so they aren’t as productive as they would be if they weren’t faced with that burden.

They know what they’re doing. They know your customers personally – their likes and dislikes. They have relationships with your customers, and most people do business with people they like.

Your employees are golden! So seek first to satisfy your employees.

3 things satisfied customers do
Satisfied customers buy more, they buy more often, and they tell others.

Look at those three again – isn’t that a great way to increase sales?

You don’t have to spend a boat-load of money chasing new customers. You focus on making your employees happy so they make your customers happy.

If you do that, your sales will grow. If you just keep your costs under control, your profits will grow. Reinvest a portion of those profits to find even more ways to satisfy your employees, and your profits will grow year-after-year.

Our bigg quote today is a paraphrase of a Walt Disney quote:

“If I treat my employees the way I want my employees to treat my customers,
I’ll never have to worry about how my employees treat my customers.”

Take care of your employees and watch your business turn into a magic kingdom!

Next time, we’ll discuss what to do if you made a commitment you no longer feel you can honor. Until then, here’s to your bigg success!

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*We are Amazon affiliates. If you purchase the book we linked to in this article, we’ll receive a small portion of the sale.

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Growth: The Good, the Bad, and the Ugly

By Bigg Success Staff
03-26-08

Bigg Success in Business

growth 

When business owners talk about growth, they usually talk about sales growth. While it is important to look at the growth of the top-line, it’s even more important that the bottom-line increases.

Sales growth doesn’t necessarily lead to profit growth. The reason is that sales growth may be "good", "bad", or even “ugly”. 

Good growth

"Good" growth can be defined as an increase in sales that also increases profits. You really want to see profits rising at a higher rate than the percentage increase in sales. That shows that you’re controlling your costs well and achieving economies of scale.

Bad growth
"Bad" growth happens when an increase in sales leads to a decrease in profits. How can that be?  If it costs more to produce each additional sale, profits will decline.

Seems obvious, doesn't it?  However, in practice, a lot of managers get so focused on making sales that they fail to consider the costs of those sales. You have to determine whether your organization just isn’t controlling costs well at this new level or if you’re reaching diseconomies of scale.

Ugly growth
"Ugly" growth is growth at a rate that exceeds the financial resources of the business.  It may even be "good" growth, but the financial resources of the business may be depleted before that becomes apparent. Growth consumes capital, because assets such as your receivables and your inventories have to increase to support that growth.

Growing sales is the only way to grow profits in the long run.  So you should concentrate on growing sales – the right way. Keep profit margins at the top of your mind, but remember that all of your bills are paid with dollars!

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