You’re working hard. You know there are things you want to change. Try these steps to find some clear action points that will improve your business results.
1. Write down the things you most want to change
Back your instincts. If you’re not happy with any aspect of your business, write it down and don’t hold back. These are the things causing you to worry, so it is healthy to face up to them.
Start by addressing the issues that are easy to change, then think hard about the more strategic or fundamental changes you know need to happen. Before you act, talk them over with someone you can confide in.
It really helps to talk these issues out, which will help refine the steps required to get the outcome you want..
2. Look closely at your gross margin and think of ways to improve it.
Your gross margin is the percentage of income left after the cost of sales have been deducted from income.
Take your sales commission income, for example. An agent is paid 45% and you have 8% franchise fees; unrecovered property advertising and profile expenses come in at 11%; and agent consumables like phones, postage, printing and stationery come to 5%.
So, your total cost of sales (COS) is 45% + 8% + 11% + 5% = 69%.
Therefore, your gross margin = your income at 100% – COS 69% = 31% gross margin.
The two easiest places to improve the margin described above is by lowering the percentage of unrecovered advertising and agent consumables. If you can reduce these by 4%, your margin will increase to 35%. That’s smart business.
3. Get buy-in from your key people
A powerful way to get your team to commit to your vision is by including them in your planning process.
They will buy in to ideas that they participate in making. If your people can see you are genuinely listening to their contributions, they will feel empowered. A warning though: you can’t make decisions based on compromise in an attempt to make people happy.
Compromise is never the main reason any change should be made. Decisions should be made on what makes good business sense. So get people to engage, but still show leadership by setting out the big picture goals that you are determined to achieve. These goals provide the boundaries for all decision-making initiatives.
4. Complete one action a day that will help grow your business in the future.
As a leader, you can get bogged down in administration and trouble-shooting.
Surprises always come up. So in your calendar, set aside a time each day for you to make one phone call, write one letter, have one meeting or complete one action that will help you grow your business in the future. These meetings could be with a vendor, landlord, potential acquisition or merger business owner, a property developer, an agent that you would like to recruit, a key supplier, an accountant, a lawyer, a financial planner, a marketing expert, etc.
You will be amazed how a ‘growth hour’ each day can energise you, create opportunities you didn’t know about and better inform you about what is happening inside and outside your business. This hour allows you to be completely free and curious. But a warning: a trap for some people is they stop managing today’s business, while looking at the future. Striking the balance is the key for a successful business operator.
I hope you can take these points and find some improvements that not only help your peace of mind, but improve your ongoing business results. Quick wins are nice, but strategic wins are great!