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Creating a Bigger Business Vision Part 2

Last week I talked about defining your business using Holistic Business Management. As a business owner, you get to define how you want your business to be. The more clear you are in that definition, the easier it will be to attract the kind of people you need to support you as employees, managers, advisers, partners and customers.

But how do you know that your business is working the way you want it to without doing everything yourself? That’s where metrics come in.

Suppose you’ve decided that you want 30% of your customers to refer you on a regular basis. You’ll need to have some way to insure that this is happening. One way is to make sure you know how your customers find out about you, so a procedure should be in place that requires sales people to ask how a customer found out about you. But what about the customers who refer other people who never show up?

You can develop a different type of metric that will give you the same information, plus lots of other useful information. By using a customer survey, particularly one based on your Net Promoter Score http://www.theultimatequestion.com/theultimatequestion/home.asp , you’ll be able to find out how many of your customers are likely to refer you to a friend or colleague.

So one of your metrics becomes “30% of all people who respond to the customer survey must measure a 9 or 10 for likely referral on an annual customer survey.”

Here’s where it gets tricky. That’s your metric. When you are a smaller company, you are probably the one who has to figure out how to do the survey, implement it and measure the results. However, when you hire a VP of Marketing and Sales, it’s up to them to do whatever it takes to give you the number you need.

And your life just got a whole lot easier!

Creating a Bigger Business Vision Part 1

Often an interesting thing happens when women entrepreneurs think about creating a bigger business vision. They freeze. They revert to old behaviors. The urge to control is stronger than ever.

The problem is the belief that as the business grows, the stress will grow, the business owner’s time will be more limited and their work/life balance will be gone forever. If you practice the principles of Holistic Business Management, this can be avoided.

What is Holistic Business Management? It’s a style of management that incorporates the best of current business practices with the best of what women bring to the table as business owners and managers.

In order to run your business holistically, you need to be clear about what’s important in your business. Over the last few weeks I’ve been blogging about money and different ways to look at your income and expenses within your business. It’s obvious that a certain income is important so a business can keep its doors open. However, what other financial aspects are important to you? For instance, gives 1% of its sales to environmental groups and supports the environment in many other ways. The giving is built into its model.

What’s important to you? Why did you build your business in the first place? Define what you want to have happen in your business. Think about financials, how you want your customers to be treated, and the culture and environment you want for your customers. How do you want to source your raw materials? Do you want to insure that only non-toxic products are used to clean your floors?

Be specific. Rather than saying “Prompt delivery of meals to a table,” say, “Delivery of meals to a table in 15 minutes or less.” The more specific you are, the easier it will be to develop metrics to run your business.

We’ll talk about metrics next week.

Help! Social Networking Has Taken Over My Business Life!

Last week, I talked about how to determine return on investment (ROI) for small business marketing activities. That’s somewhat easy when you’re looking at money you’ve spent vs. money that’s come in. But how do you determine the ROI of your time?

One of the most recommended marketing strategies over the last two to three years has been the use of social media and networking. This is a broad term that can include everything from blogging to creating a video for You Tube to tweeting on a regular basis. These activities can be real time eaters, particularly if you find it difficult to write or create stellar sound bites.

It also can be difficult to count the sales that actually come from these activities. If you ask most people where they’ve heard of you, you’re most likely get a vague answer of “the Internet,” if they found you through any of the social media channels.

Let’s assume that you are getting a substantial number of sales from the Internet. You have a sales page on your web site that converts your leads to sales. And, let’s say, that 10% of the people who visit your website (unique visitors) purchase a $25 item from you each month. You’re getting 1000 hits a month. So you’re earning $2,500 a month from your web site.

Once you’ve built your web site, your costs should be negligible. If you can increase the number of people showing up at your website, you should be able to increase your sales.

The next thing you’ll need to do is assign an hourly wage to your efforts. Let’s say $50 an hour is the minimum wage you want to pay yourself for your time. Spend two hours a week on social media, and you’ve spent about $400 per month.

You’ll need to make 16 more sales a month to break even. Remember, breaking even isn’t good enough. You’re really looking to get close to more than 100 sales a month to make the effort worth your investment.

Social media is a long term strategy. You’ll have to invest several months of time up front before you receive the results you want. Through a use of Google Analytics, analysis and careful record-keeping, you’ll be able to get an idea if your time investment is worth it!

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Creating a Bigger Business Vision Part 2

Creating a Bigger Business Vision Part 1