Business Systems and Processes.

The Systems Thinker Blog

Business Improvement: Manage by the Numbers!

Ron Carroll

You now understand that systems are the solution to your business challenges. Good systems increase efficiency, accomplish objectives, and give customers what they want every single time. Your business accounting should be the master system that measures the effectiveness of all your business processes—the operations of your business.

Think of your business as you would the human body. The body is a complex organization that has an important job to do. It must perform with exactness and on tight schedules. To accomplish this, the body uses systems that work together—the circulatory system, respiratory system, digestive system, nervous system, and so forth. The brain manages all of these systems and works to keep the body healthy and functioning properly.

The brain of your business is the accounting system. It processes all of the data related to the activities of the business and provides owners with strategic information to drive profitability and growth. “Managing by the numbers” is the method successful owners and managers use to operate a business that is also healthy and functioning properly.

Manage by the Numbers

Discover the true value of accounting

In many small to mid-size businesses, accounting is seen as the system used for paying the bills, reconciling the bank, invoicing customers, or preparing a tax return. It should be much more. It should be the system for gathering business intelligence.

Renowned business authority Peter Drucker says, “You cannot manage what you cannot measure.” To which Michael Dell, of Dell Computers, adds, “Anything that can be measured can be improved.” Business accounting is the measuring and reporting arm of the business.

Accounting information reveals the strengths and weaknesses of a business operation (see SWOT Analysis). It tells the business owner what went wrong in the past and what can be done to improve in the future. Accounting systems reduce large quantities of complex data to simple and understandable information. This information contains the seeds of solutions for all business problems and is the basis for making mission-critical decisions.

Accounting systems bring all the resources of the business to bear on the creation of profit, the lifeblood of the business. When an accounting system is utilized properly it can make poor men rich. If ignored, it can make rich men poor. It is the most under-utilized tool of the average small-business owner. Even professional accountants do not always extract its full value.

Let’s take a closer look. Business activities generate numbers, regardless of whether the owner pays attention to them. These activities are the specific daily processes and systems that create sales, produce products, train employees, service customers, and so forth. Strong accounting systems organize the numbers to produce a wealth of relevant information for running the business. For example, business intelligence may tell owners and managers:

  • “The company must do $100,000 per month to break-even.”
  • “It takes an average of 52 days to collect accounts receivable.”
  • “The plant is running at 76% of its capacity.”
  • “Sales are up by 8% over last year.”
  • “Labor costs are running 2% higher than budgeted.”
  • “It costs an average of $400 per sales lead.”
  • And much more!

The steady flow of information creates a reservoir of knowledge from which business decisions can be made. Good decisions will save or earn the owner far more than the cost of acquiring the information. The accounting system may tell the owner to hire a salesman, and what the new break-even point will become. It may tell him to discontinue an unprofitable product line, buy a new piece of machinery or raise product prices, and by how much. He or she will benefit by knowing the optimum level of inventory to stock or what should be the expected result of more advertising.

Owners make the best decisions when information tells them the financial effect their decision will have on the business—before they ever spend a dime! The outcome of managing by the numbers is better management, control, profitability, and customer satisfaction.

Counting vs. Accountability

Many business owners mistakenly think the root of the word “accounting” is “counting.” They know their sales for the month, the bank balance, and how much money they owe vendors. Savvy business owners understand the root of “accounting” is not “counting,” but “accountability.” Each business system or process is accountable for a planned result.

Ask yourself:

  • “Is my lead generation system producing the expected number of sales leads?”
  • “Does our quality control system keep product returns at an acceptable level?”
  • “Is my employee incentive system boosting productivity?”

Effective accounting ensures that all business activities are working together to produce a profit. “Counting,” or bookkeeping, is an overhead expense of doing business. “Accounting” is an investment that pays big dividends. Don’t be without it!

Strategic information leads to financial control

To develop the perfect business requires a disciplined and systematic course of action. The business owner must understand where he is at, where he is going, and how he is going to get there. He uses strategic information and systems to achieve financial control. If managed and grown properly, the business will be profitable, reward stakeholders, and create financial and personal freedom for owners. Accounting plays a central role.

Managerial accounting is the art and science of managing by the numbers. Regardless of who does your accounting, you need it done. You need it done right. And you need it done right now!

One final point: Every business has one or two “key numbers” that drive its economic engine. If you have knowledge and control of these numbers, everything else falls into place. What are your key performance indicators? If you do not already have them identified, do so now, and get help if necessary. Attention to these key numbers will make all the difference to your success.

By the way, if “numbers” aren’t your thing, which describes most people, be humble. Hire a “numbers person.” If you get the right person, I promise it will be worth it!

The next major systems you must develop or refine are marketing and sales. A business will not exist for long if it does not have an effective system for getting customers in the door.

Step 5: Become an Obsessed Marketer
Download PDF ebook: 10 Easy Steps to Grow the Perfect Business

Business Improvement: Systemize Everything!

Ron Carroll

In the Zone, you are flooded with inspiration and ideas to improve your business. You have a vision of what the business is going to look like when it is “finished.” You have written down specific goals. You are now ready to take steps to grow the perfect business. This is where the real fun begins.

As you look at your business through a microscope, you see it is made up of systems and subsystems. You realize that smooth-running systems create a smooth-running business. You conclude that your business will operate best when there is harmonious and orderly interaction between its vital systems. Business systems are the building blocks for creating the perfect business, one that runs itself efficiently and profitably. Let’s explore this further.

Smooth-running business systems

Systems are the solution to problems

All businesses have challenges that can create frustration for business owners and customers. A frustrating condition exists when there is a specific, recurring problem over which the business owner feels little or no control. Have you ever thought:

  • “My cash flow is stressing me out.”
  • “I can’t seem to hire good people.”
  • “Our quality needs improvement.”
  • “Employees are wasting time.”
  • “I don’t get enough sales leads.”
  • “Profits are down.”

These undesirable patterns can be eliminated by simply installing effective business systems. Systems are the logical and practical solutions to your business problems and they are just waiting to be discovered.

What exactly is a system? An effective system is a procedure, process, method, or course of action that produces a consistent and measurable result.

Every business has informal systems but that informality is the reason for much of the inefficiency and frustration. Pricing systems, hiring systems, lead generation systems, quality control systems, and every other loosey-goosey, informal system can change with the whims of people and will not consistently produce the desired outcome. When systems are set up properly and well documented, they remove all of the guesswork and deliver a specific, measurable result every time.

Effective systems also enable the business to run itself profitably without the hands-on involvement of the business owner.

Systems are the “Magic formula” for success

Businesses often struggle with profit margins when there is a continuous change in the delivery of products or services. Routine systems and procedures enhance profitability. Once the system is defined, money is made when ordinary people learn to do it fast and do it well. Generalized solutions, seat-of-the-pants operations, “human nature,” and everything left to chance is replaced with detailed procedures, performance standards, and accountability. Technology, as painful as it often is, can be a great ally.

The organization chart, which visually describes the structure, leadership, and relationships within the organization, is the most fundamental business system. All other systems fall somewhere within the specified job functions on this organizational chart. For example, a lead generation system would fall under the job function of “marketing.”

Good business systems increase efficiency, accomplish objectives, and give customers what they want every single time. They are the solution to frustrations, wasted resources, poor performance, and other business problems. While the right people are critical to an organization, a mature business has fully-developed systems and is systems-dependent rather than people-dependent. The time and cost to create a system are repaid many times over. Systems must be simple, in writing, and easily understood by operators to be effective.

Start creating systems today

Many systems are no more than a form or a checklist. Some are more complex. Systems are often modified and improved, but always provide the best-known way of getting the job done. Remember, all new systems require owners and employees to have the “will” to implement change and stick with the new method of doing things.

There are three stages to developing an effective system.

Stage 1 – Design the System. Identify from business information, personal frustration, or customer dissatisfaction the areas of the business that need improvement. Defining the problem and its causes will often point to the system solution. Describe what the new system will look like and what effect it will have on the organization. Estimate the costs and benefits of the new system and decide if you have the “will” (time, financial resources, and determination) to see the development process through to completion.

Stage 2 – Develop the System. Innovate new procedures, processes, or methods to solve problems and accomplish objectives. Innovations are the “best-known way of doing things” and should be simple, repeatable, and customer-driven. The completed system should contain all definitions, policies, detailed procedures, forms, management reports, and every component necessary for an employee to operate the system with exactness. For a business system to be effective, it must be documented!

Stage 3 – Deploy the System. Implement the documented system. Eliminate employee discretion, “the enemy of order, standardization and quality” (Theodore Levitt, Marketing For Business Growth). Perform the task or procedure the same way every time, or until innovation improves it. Measure the impact of each system innovation on your business and its effectiveness over time. Assign clear responsibility and accountability for the performance of the system.

This sounds like a lot of work. It is! But it is an essential process for growing the perfect business. Some systems will take hours, some days, and some weeks to implement. You’ll have a dozen or so critical systems and many small subsystems. Accounting and marketing are the two granddaddy systems that drive the business. If you spend regular time in the Zone, you will get the task accomplished sooner than you might imagine.

When you think about it, this is why you got into business in the first place — to build a business that you could sell, franchise, or hire someone to run for you. A business built on systems is the only way to do it. Each system in place is one more step toward a business that works profitably and leads you to financial and personal freedom.

Become a Systems Thinker. Step back and look at your business as a world of integrated systems. Identify weaknesses. Get in the Zone and start designing new or improved systems today! Once you begin Systems Thinking, ideas will flow into your mind 24/7. Have a notebook to write them down.

Take a look at your accounting system first. It plays a critical role in your business. Its importance cannot be overstated. Your next step is to get in control of the “numbers.”

Step 3: Manage by the Numbers
Download PDF ebook: 10 Easy Steps to Grow the Perfect Business

Business Improvement: Get Off the Treadmill and Into the “Zone”!

Ron Carroll

Your business will never give you what you want until you get off the phone, out of meetings, away from the office, and into a quiet “Zone” where illumination, inspiration, and imagination produce a panoramic view of new possibilities for innovation!

Work on your business in the Zone

When you get moving in the Zone, your business will progress at warp speed. You will begin to see your business as your “product.” You will “work on the business, not just in the business” (Michael Gerber, E-Myth Revisited).  In doing so, you will create a remarkable company—one that will help you achieve your life goals.

For a little time each day or week, you must leave all administrative tasks and daily routine behind, and even take a time-out from income-producing tasks. Instead, you will concentrate on the most important task of all—building permanent value into your business.

Miracles Will Happen

In the Zone, you will be at the highest state of human performance and productivity. Something almost miraculous happens with your mind and emotions. You become energized. You function on a higher plane of clarity, creativity, and competence. You are more sensitive, insightful, and intuitive. You better understand the people, relationships, and circumstances around you.

In the Zone, you will hunger for knowledge and read books written by business authorities, seeking all truth that can deepen your understanding and broaden your vision. You will think about your customers, employees, and business processes. You will “dream the impossible dream” and map out the path to its fulfillment. These essential activities are more than just good management practices. In the Zone, they become the catalyst for all business improvement and transformation.

Solutions Become Clear

In the Zone, you immediately come face to face with the brutal facts of why your organization isn’t all it can be. You will see specific things you can do now to solve business problems, improve business processes, fuel growth, and plan for the future. You will discover how to leverage your passion to become the obvious best choice of your target customers.

In the Zone, you will be open to a flood of brilliant ideas. You will set priorities and concentrate single-mindedly on one thing at a time, producing an abundance of innovative solutions in a very short period. Your desire to take action on these new ideas will become urgent. Your energy will escalate as you achieve mission-critical goals and objectives. You will thrill as things seem to fall into place like never before.

In the Zone, you will be at the height of your effectiveness and value to the business. You will bring a revitalized spirit to your organization. Your employees will catch on fire. Your customers will take notice. The more time you spend in the Zone, the faster your company will reach optimum performance levels, and you will achieve a culture of excellence.

Get Started Today

Remember, your constant burn of physical and emotional energy at the business leaves little energy for the mental and creative tasks required to work on the business. Get away now. Find a quiet place, perhaps at home, with a computer, and behind a closed door. The best time to enter the Zone is early morning when all energy levels are up and when inspiration and creativity seem to flow. Spend two hours if you can. You will likely start with some time constraints. Don’t worry. Your time in the Zone will increase as your business transforms. You will eventually want to spend at least 25% of your working-time in this magical place.

Begin by eliminating some of the personal constraints you bring to the business. Then identify one or two or your greatest business challenges or frustrations. Study any financial data or information you have. Write down what you want the desired results to be. Read a book or two from Amazon.com about marketing, customer service, employee motivation—whatever your challenge is. Ponder and brainstorm potential solutions. Talk to other experts or your valued employees.

Once you identify a specific purpose, ideas will flow 24/7; get a notebook to write them down. Then begin to create a process, procedure or system that will eliminate the problem. When you get that system done, start on the next challenge (constraint). Keep going and you will be amazed at what happens. You and your business will go through a remarkable change.

I have been working in the Zone now for a number of years. It is where I do my best thinking; it is where the Box Theory™ Way emerged.

When my adult children call home, they often ask, “Dad, are you in the Zone?” If I say “Yes,” they say, “OK, I’ll talk to you later.” I usually reply, “That’s alright, go ahead.” Of course, I love my children, and they are more important than anything I am doing, but I must admit, it takes a bit of effort to get my head back in the Zone again.

Please trust me. The Zone is a special place where extraordinary things happen. The sooner you discover it, the sooner you will reap the innumerable benefits! And the best place to start is by creating your business blueprint.

Step 2: Blueprint Your Business!
Download PDF ebook: 10 Easy Steps to Grow the Perfect Business

*Check out a few things you can do while working on your business “In The Zone”.

Hats Off to Successful Entrepreneurs, and Those Who Dared to Try!

Ron Carroll

Not long ago a friend of mine in the teaching profession said, “I think I am going to quit teaching and start a business.”

“What kind of business,” I inquired.

“Oh, I’m not sure yet. I just want to make a lot of money and have more free time,” he responded.

“Yeah, right,” I thought.

I wish it were that easy!  Every day, I watch small-business owners (including myself) engage in entrepreneurial games in the most challenging vocational arena. It takes the heart of an Olympic champion, the courage of a Mount Everest climber, and the determination of Rocky Balboa to survive even a few rounds as a small-business owner.

Rocky Balboa

Photo by Canburack

Dream vs. Reality

We all start with a similar dream. We want to be independent and perhaps make more money than we could earn by working a job for someone else. We have some special talent or product that we think others will beat down our door to get. Against our spouse’s good judgment, we sometimes risk everything to “go for the gold.”

Eventually, we discover—like those who have gone before—that owning a business is the ultimate “reality show.” We hope it will be Joe Millionaire, but it is often more like Fear Factor or Survivor, where we can fall or get booted out at any time.

The moment we begin our enterprise, unrelenting forces start into motion to drive us out of business. We face cost increases, customers who don’t pay their bills, government red tape, problem employees, competition, lack of sales, cash flow nightmares, constant demand for new and better products, and a myriad of other challenges.

I won’t even talk about that elusive thing called “profit.” When we do make some, it is often hard to know exactly where it is. Profit has a way of ending up as inventory collecting dust on a shelf, or in a growing accounts receivable balance, or as a new piece of equipment. If it does happen to be plentiful, Uncle Sam will be at our doorstep to collect about half of it. One thing is certain; profit has a hard time making it into the pockets of owners and stakeholders.

Now if this doesn’t describe your business, and things are going pretty well right now, just wait! Changing business cycles guarantee that you too will one day have these character-building experiences. And hopefully, you have set aside a little of that profit to get you through.

Sustaining a small business over the years requires great expertise and discipline. To use a few clichés, you must “wear many hats,” “juggle a lot of balls,” and “keep on smiling,” even when you feel like punching a hole in the wall. By the way, if you have a college education, it probably doesn’t help much because you likely didn’t graduate in accounting, marketing, human resource, or computer technology. But now, you must be informed and competent in all of these areas. You’re amazing! See, your mother was right.

I will tell you this. Some of the greatest people I know perform miracles daily to deliver quality products and services to their customers. There are a lot of negative things said about business (and some are true) but from my point of view, you are heroes and your efforts help us all to have the best quality of life in the world. I take off my hat to you!

Lead with Passion and Humility

In the following articles, I will be discussing, “10 Easy Steps to Grow the Perfect Business.” Effective and persistent leadership is required to carry out these steps. You are the person who must provide the vision and drive to make your business successful. You can do it! And these ten steps will get you firmly on the road to success.

In his book Good to Great, Jim Collins describes what makes good companies great. He says that the best leaders—what he calls level 5 leaders—have a “paradoxical mix of personal humility and professional will. They are ambitious, to be sure, but ambitious first and foremost for the company, not themselves. They are fanatically driven, infected with an incurable need to produce sustained results. They are resolved to do whatever it takes to make the company great, no matter how big or hard the decisions. They attribute success to factors other than themselves. However, when things go poorly, they look in the mirror and take full responsibility.”

The life-work you chose is to grow a remarkable and financially prosperous business! You can do it in 10 Easy Steps, so let’s get started.

Step 1: Get Off the Treadmill and Into the “Zone”!
Download PDF ebook: 10 Easy Steps to Grow the Perfect Business

Improve Your Business Systems: 7 Ways Naming Gives Power!

Ron Carroll

In the “Harry Potter” series, no witch or wizard dared to speak the name of evil Lord Voldemort. Why? Speaking his name gives him power.

Likewise, give a lamb or calf a name, and it becomes a pet. Give a group of ballplayers a name and they become a team. Give a good movie or piece of music a name and it will be remembered by millions of people through generations of time.

Naming something gives it identity, purpose, and importance. Naming gives it POWER!

The Value of a Name

In business, the name of a company, product, or even a web page URL can create great financial value. Some names become brands so powerful they take on a life of their own, such as the Hershey bar, Kleenex, Xerox copies, and the iPhone.

In the accounting business of my former life, I “productized” an accounting service with a registered trademark name—the Profit Acceleration System®. Giving an imaginative, compelling, and unforgettable name to a business service immediately elevates its perceived value.

Name Your Business Systems

In the typical small and midsize business, there is a lot of hustle-and-bustle as people scurry around getting work done. They are engaged in a variety of business activities that have grown out of a need to accomplish essential tasks—marketing and sales, customer service, hiring, order fulfillment, and so forth.

However, as you become a Systems Thinker, you begin to see your business activities as interrelated systems and subsystems—the essential building blocks of your business. Each business system has a specific purpose and is of greater or lesser importance to the goals of your organization. (Your lead generation system is probably more important than your custodial system.) In addition, each system or process is either performing as expected or not producing the desired results.

The simple point: W. Edwards Deming (Total Quality Management) remarked, “If you can’t describe a process, you don’t know anything about it.” Giving a name to a business system or process is the first step to describing it.

Naming Gives Power

The moment you see your business activities as specific systems—AND THE MOMENT YOU NAME THEM—they become more powerful.  Here’s why.

Name Tag for Business System

Once you name a system, you can:

  1. Distinguish it as a unique business function with a specific identity and purpose.
  2. Give it an owner, someone who is accountable for its results.
  3. Create a team around it that takes delight in its achievements.
  4. Measure it to determine if it is producing as expected.
  5. Improve it by removing bottlenecks and weak links.
  6. Celebrate its success with recognition and rewards.
  7. Value it as a true business asset.

What are Your Core Business Systems?

Do you and your employees recognize your important business systems by name? For example, do you talk about how you can improve your Sales-Lead Follow-up System, your New-Customer Intake or Onboarding System, or your Employee Incentive System? Have you even thought about these types of activities as business systems?

Does everyone in your company know which business systems they are part of or responsible for? Do they know every day how well their systems are performing, and what they might do to improve?

If your people aren’t connected to the performance of named business systems or processes, I guarantee you are not tapping into the potential power and profit these systems can generate.

So, go put a name on each of your core business systems. This simple act will raise consciousness, elevate performance, and give you a better-run company.

And Remember: “Names have power” (Rick Riordan, “The Lightning Thief”).

Work ON the Business: 7 Tips to Do It Right!

Ron Carroll

Years ago, I was struck by a statement that had a great impact on me. In fact, it changed my entire approach to business, and ultimately became one of the driving forces behind my current Box Theory™ methodology and software.

Michael Gerber, author of “E-Myth Revisited,” said, “Business owners must spend time working on the business, not just in the business.”

 Running a business

Working on a business—or running a business—is an entirely different task than working a “job” within the business.

Shortly after hearing this profound statement, two young fellows walked into my office and wanted to teach me about time management. Among other things, they said the best use of my time as a business owner was creating value in my company. The second-best use of my time was building relationships and creating sales opportunities.

The epiphany: Working on the business to create value for stakeholders, customers, and employees is the most important and best use of a business owner’s time.

I soon devoted an hour a day improving my company’s operations. This eventually increased to four hours a day—and everything just got better. I got off the treadmill and became a “business engineer”—one who plans, constructs, or shrewdly manages an enterprise” (Online Dictionary).

I was transformed by this new thinking, and so was my company.

Running a Business

Here are a few things I’ve learned over the years about how to get the best results when working on the business.

  1. Get Clarity of Purpose: Make sure you and all employees understand your mission, vision, strategy, and goals so that everyone is pushing in the same direction (easily accomplished with Box Theory™ Software). Working on the business means becoming clear about who you are, where you are going, and how you are going to get there.
  2. Find Time for Learning: Spend some time every day in The Zone reading and learning, becoming an industry expert, considering feedback from customers and employees, and pondering your key performance indicators (KPI’s). “There is no substitute for knowledge” (W. Edwards Deming, Total Quality Management). Working on the business means pursuing the knowledge and skills that give you an edge and keep your company on top.
  3. Never Stop Improving: Continuous Improvement of business operations is the primary responsibility of business owners and managers. Hold a regular business improvement workshop that focuses on developing better people, products, processes, and policies. Tap into a wealth of employee ideas. Small improvements over time will produce significant financial benefits. Working on the business means creating a culture of learning and improvement—a culture of excellence—where people love coming to work and perform at their best, even when you’re not around.
  4. Increase Value to Customers: Innovate to make your products and services easier, better, faster, and cheaper than the competition. WOW your customers and turn them into evangelists for your company. “See how much you can give for a dollar, instead of how little he can give for a dollar” (Henry Ford). Working on the business means figuring out how to provide so much value that you become the obvious choice of your target customer.
  5. Elevate Your Employees: First, hire the right people. Then encourage learning and growth by asking them to take on new or greater responsibilities. Seek their help with important tasks and goals. Offer your people opportunities to acquire new skills—perhaps attend a paid seminar. Challenge them to stretch their performance levels. And be sure to recognize and reward achievement! Remember: If your business isn’t learning, you’ll fall behind, and a business learns as its people learn. Working on the business means lifting people and deriving the maximum value from their increasing talents and experience.
  6. Take Cost Out of Your Business: Profit is the life-blood of your enterprise. Find ways to reduce ever-rising costs and preserve your margins, while maintaining the value given to customers. The secret to lowering costs is to make your products, services, and business processes better, faster, and cheaper. And keep in mind the important principle of sales equivalency. Working on the business means applying pig-headed determination to get rid of the waste and inefficiency that increase operational costs.
  7. Create High-Performance Business Systems and Processes: Your entire organization is made up of systems and processes. You can accomplish the six objectives above by creating good business systems that consistently get desired results. There is no other way. The primary purpose of those business systems is to differentiate your company in the marketplace and to help you excel at finding and keeping customers. Working on the business means spending time designing, developing, overseeing, monitoring, and evaluating all the systems and processes that make your organization run smoothly, create value, and generate profit.

Work On the Business More and In the Business Less

So, if you want to run a successful business, the above strategies will get you on the right track. As your company grows, you will spend more time working on your business and less time doing the pick and shovel labor in the business.

And that’s when it starts to get fun!

The mission and purpose of Box Theory™ is to help business owners and managers work on their business in an intelligent and systematic way. It replaces guesswork with proven principles and methods that get results. With the Box Theory™ Way, you know every day exactly what you can do to improve. With each new successful business system or process, the task gets easier and your rate of progress accelerates.

I know the challenge small-business owners have in finding extra time to work on their business. Changing my work pattern to accommodate the process of business improvement was one of the hardest things I’ve had to do in my business career. Now, all I can say is, “I’M GLAD I DID IT”… AND YOU CAN DO IT TOO!

Marketing Systems: Eight Rules of Customer Acquisition!

Ron Carroll

In the Deep Space Nine episodes of the American television series, Star Trek, we become acquainted with an extraterrestrial race known as the Ferengi. These shrewd and uber-capitalist traders are obsessed with profit and will use any means to get a financial advantage over others.

Ferengi Quark - Profit Rules

The Ferengi business philosophy is contained in a set of guiding principles known as “The Rules of Acquisition.” Some of their more benign rules include:

  • #13 – Anything worth doing is worth doing for money.
  • #80 – If it works, sell it. If it works well, sell it for more. If it doesn’t work, quadruple the price and sell it as an antique.
  • #84 – A friend is not a friend if he asks for a discount.
  • #107 – A warranty is valid only if they can find you.
  • #124 – Friendship is temporary, profit is forever.
  • #126 – A lie isn’t a lie, it’s just the truth seen from a different point of view.
  • #141 – Only fools pay retail.
  • #155 – What’s mine is mine, and what’s yours is mine too.
  • #187 – Borrow on a handshake; lend in writing.
  • #208 – Give someone a fish, you feed him for one day. Teach him how to fish, and you lose a steady customer.

Quark, the memorable Ferengi bartender, after attending the funeral of a friend, remarked, “They gave him the highest tribute you can give to a person; he was a good customer.”

We all love good customers. They are the life-blood of our business. And we could all use more of them (no Ferengi pun intended).

However, the harsh reality is this: “Every sale has five basic obstacles: no need, no money, no hurry, no desire, no trust” (Zig Ziglar). At any given time, only about 10% of people are open to the idea of buying your product or service, and just 3% are ready to purchase. So, you have to have great marketing and sales systems to find and win over those few prospects.

Here are eight of Ron’s Rules for Customer Acquisition:

# 7 – Know well your most probable customer.  Know who they are, where they are, what they buy, and why they buy. How can your products or services take away their pain or fears? How can you improve their business and/or personal life? Do you know exactly what they want and expect from your company? Ask them if necessary.

#11 – Focus only on your target market. Your target market is the only market that matters to you. Seek to become remarkable and to dominate it! Don’t try to be all things to all people. Concentrate selling activities on the market segment that has the highest probability of purchasing your product or service. Position your offering with laser precision so that you are clearly the best option they have.

#14 – Differentiate your company. What is your unique selling proposition or competitive advantage? Can you set yourself apart with any of the following: exclusive products, features, or benefits; exceptional quality or performance; innovative solutions or technology; extraordinary service; distinctive sales, marketing, or advertising methods; special pricing; extra-fast distribution or delivery; “killer customer care”; strong guarantee or warranty, or perhaps financing or leasing. Find some way to “stand out like a purple cow in a field of brown cows” (Seth Godin).

#19 – Send the right message.  Communicate a clear, powerful message that shows why you are unbeatable. There is great power in specifics. Quantify, compare, or demonstrate your advantage or claims. Avoid the mindless fluff. Jim Rohn describes a three-step process to be a master communicator. “First, have something good to say. Second, say it well. And third, say it often.” Focus on the customer’s emotional needs and wants (benefits) and use logic (features) to support it. Discover the essential message that resonates with your potential customers. In a noisy world, your ideal customers will hear your call.

#21 – Advance the relationship by building trust.  When working with possible buyers, be yourself—interested, curious, and engaged. Have a real dialog, and seek the best solution for your customers. Deliver on your promise, and consistently. Show integrity and professionalism. In short, follow the Golden Rule to treat others as you would like to be treated. Furthermore, be especially attentive during the initial window of opportunity—low pressure and strong follow-up. And don’t be afraid to ask for the sale if it is in the customer’s best interest.

#24 – Meet the four basic customer demands.  Whatever your business, customers always seek four things: quality, speed, value, and a pleasurable buying experience. Make sure they get it or risk losing them to your competition. “The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed” (Henry Ford).

#28 – Make an offer they can’t refuse.  When your prospect has heard your persuasive message and is ready to buy, make an offer so compelling he or she would be crazy to buy from anyone else. The simple formula is given by Rick Shefren, online marketing authority, “Create an irresistible offer. Present it to a thirsty crowd. Sell them a second glass” (The Irresistible Offer pdf).

#30 – Become a passionate Ferengi marketer. You must have the “pig-headed determination” to be a successful marketer. Create good marketing systems and commit the necessary time, effort, and financial resources over a sustained period of time. Be patient. The momentum will build. Consistency equates with familiarity. Familiarity equates with confidence. Confidence equates with sales.

If you follow the above tips and incorporate them into your business processes, you will attract and acquire more and more customers. Thinking as a Ferengi, “Enough… is never enough” (Rule #97).

How to Become the “Best Deal” for Your Target Customer!

Ron Carroll

Within our free-enterprise system, we are all looking for the same thing—the “best deal.” When we buy goods, services, and even when we hire employees, we want to get the greatest value we can for the time, effort, and money spent.

It should be no surprise that our customers and employees are also looking for the best deal from us! However, the best deal may not be what you think.

Becoming the best deal

What is the Best Deal?

Many people equate the “best deal” with the “best price.” Business owners are often committed to having the “lowest price in town.” Many of these owners also struggle to survive because their operating profit margins are too low. What they fail to realize is that customers looking for the best deal are not necessarily insisting on the lowest price.

Customers reward companies that serve them best and allow the others to fail. It is how the customer feels about your business as a whole that matters most. Everything about your business—advertising, cleanliness, return merchandise policy, courtesy and knowledge of employees, product selection, price, location, delivery time, and so forth—is what they are choosing. Your entire business is your product, and it must shine throughout. When it does, YOU become the “best deal!”

High Value is Better than Low Price

Sometimes pricing does play a role in helping companies become the best value to their customers. Legitimate price advantages do happen. I am acquainted with a landscaper who is the owner of a local rock quarry. He has a significant price advantage over other landscapers who must transport boulders a greater distance.

However, the cry, “We have the lowest price,” is often a sign of weakness. Translated, it usually means the business has not invested in marketing, quality people, killer customer care, and other expenses incurred by well-run companies. Remember, everything about your company is what makes it the best deal—OR NOT.

When I grab a quick lunch during the day, I sometimes go to a sandwich shop that is close to my office. I can get in and out quickly. The prices are relatively low, and no tip is required. At that moment, the sandwich shop is the best deal for me.

On the weekend, I take my wife out to dinner at a steak-house restaurant. I will pay three or four times as much for a meal there as I did at the sandwich shop. This popular uptown restaurant has a nice ambiance, provides an unrushed full-course meal, and I am able to court the love of my life. At that moment, the steak-house restaurant is the best deal in town, not the low-end sandwich shop.

On our wedding anniversary, I took my wife to an exclusive restaurant in Salt Lake City. I paid an outrageous price, but it was a night she will never forget. Of the three restaurants, this one provided the greatest value of all: a lifetime memory.

So, the best deal, in this case, is not related to pricing. Instead, it is the highest perceived value based on my current need. At each restaurant, I wear the hat of a different customer with different expectations, and I have a different definition of what is the best deal.

Be the Best in Your Target Market

Since no business can serve everyone well, it is important to define your target customer and then provide real, quantifiable, and compelling reasons to buy from you. You want your target customers to see you as the best choice available to them. If you own the exclusive dinner restaurant, you don’t care about the guy who wants a cheap chicken sandwich. No other customer matters except your target customer!

Remember, if your competitors offer greater value than you, customers will buy from them. And don’t think you can make up for the value deficit by trying to “out-sell, out-trick, out-technique, out-cold call, out-persist, and out-luck all your competitors” (Rick Harshaw, Monopolize Your Marketplace). Today’s consumers know value when they see it. You simply must be the best in your target market. Period!

Innovation Can Set You Apart

You become the best by constantly innovating. Innovation is the process of figuring out how to offer more value than your competitors. Innovation is not doing something cool that your competitors also do. It is not just giving your customers what they have come to expect as the norm, or offering a gee-whiz promotion from time-to-time.

Innovation is not necessarily a new invention or business concept. It may just be as simple as outrageous customer care (COSTCO), or delivery times that amaze (FedEx), or an exceptional warranty (Hyundai).

Your value may simply be the result of well-crafted business systems and processes—the distinct and remarkable way you do things from end-to-end. By the way, when your people, products, and processes work together in a unique and memorable way to make you the best deal, you have a brand.

Ask yourself one simple question: If I were a customer of my business, what would compel me to buy from me instead of my competitors? If you don’t know the answer to this question, your business is probably underperforming. Get in the Zone today and figure out your unique selling advantage.

Become Remarkable

Because there is a cost to becoming the best, the customer actually pays a premium for the privilege of doing business with remarkable companies. However, customers must think this is OK because they keep coming back.

Remember, your business as a whole is what makes you the best choice. It’s the little things that count.

Be clean.
Be prompt.
Be consistent.
Be courteous.
Be knowledgeable.
Be dependable.
Be responsive.
Be innovative,
Be systemized.
Be remarkable.

And you will be the BEST DEAL!

Better Than a Suggestion Box: Tap into a Wealth of Employee Ideas!

Ron Carroll

“You are surrounded by simple, obvious solutions that can dramatically increase your income, power, influence, and success. The problem is, you just don’t see them” (Jay Abraham, marketing consultant).

Let’s talk about a simple strategy that will help you harvest an abundant crop of new ideas that are sure to motivate employees, give customers a better buying experience, and increase financial results.

Business Improvement Ideas

An Untapped Asset

Though perhaps unnoticed, the people around you possess a wealth of experience, talent, insight, and creative ideas that are just waiting for the right opportunity to be shared.

Sadly, many useful and innovative thoughts that could improve your company are never expressed. Why? You don’t have a business system to tap into the collective intelligence of workers who are intimately involved with your daily operations; this includes the “average” folks that rarely speak up.

Everyone in your organization is potentially a problem-solver and an innovator. If you have an idea-rich culture of continuous learning and improvement, your employees are always thinking: “How can I do this easier, faster, better, or less expensively.” 

Researcher Alan Robinson says, “ideas are ‘free’ and employees will gladly make improvements as part of their job if the environment you create is right.”

So what kind of system can you create to harness the knowledge, imagination, and renewable energy of your employees?

The Outdated Suggestion Box

Some companies have tried a “suggestion box.” Employees write ideas or recommendations on a form and put them in a labeled drop-box. Managers read the suggestions (sometimes) and implement the ones they think will work. However, suggestion boxes typically aren’t very effective. They allow anonymity leading to frivolous suggestions or mean-spirited remarks. They focus on problems but not necessarily solutions, and the solutions offered are not always feasible. Employees often propose more work for other people who are already busy, and thus no action is taken. Finally, this old-style system usually doesn’t reward successful implementation and sustained results stemming from the suggestion.

There is a better way!

Employee Improvements

 (Photo: Bright Ideas Campaign)

Ideas for Improvement

Here are some ideas to implement a business system that will solicit real improvement ideas, generate enthusiasm from employees, and save or earn your company thousands of dollars over the coming year.

  1. To begin, let’s get rid of the suggestion box and replace it with a filing system by worker name. After all, we expect every person to submit many suggestions—often small ones—over the course of a year.  It’s also a good idea to review the employee’s file of suggested improvements during performance evaluations or other interviews.
  2. Next, give the system a new name—something that emphasizes solutions instead of merely suggestions. You could call it the “business improvement program” or the “employee ideas-for-improvement program.” If those sound a little lame, have a brainstorming session or contest to name the system. Let me know what you come up with.
  3. The person with a new idea for a solution or improvement completes a brief form (get a sample form in The Zone) and hand-delivers it to their supervisor or someone who could provide the time and resources needed. Good ideas might help with customer satisfaction, cost savings, productivity, process improvement, revenue generation, and so forth. A brief plan to implement the proposal is also included. The merits of the idea are discussed, and an action plan generated.
  4. Ideally, the submitter of the new solution should be responsible for its implementation. Ownership increases the likelihood of success. Active participation by the submitter removes one of the major complaints with the old suggestion box: “I gave the company a good idea, but they didn’t do anything with it.” Lack of action kills the motivation of any improvement program.
  5. Always thank employees for their time, effort, and feedback. Positive reinforcement will keep the good ideas flowing. Create a reward system for people whose ideas are successfully implemented. Frequent acknowledgment of the many small improvements is more effective than occasional recognition of a few big ones. Consider giving a vacation day, tickets to a sporting event, or a gift card. When others see that good ideas are rewarded and appreciated, they will join in. If appropriate, give financial compensation, partial when the solution is first implemented and the rest over time with proven results. The reward system helps the submitter maintain ownership and a vested interest in assuring that the new solution is understood, accepted, and practiced by everyone.
  6. If you want to create a little healthy competition, do something visible like posting a chart that shows the number of ideas submitted by each person, team, or department. Be creative. Recognize winning ideas in your weekly Business Improvement Workshop. Celebrate achievements with perhaps a pizza party.
  7. Maintain a simple log of new ideas presented, the person’s name, and date implemented. This helps the supervisor know what is going on at a glance and allows for a frequent review of progress. Again, talk it up at your Business Improvement Workshop.

Never Stop Improving

Get connected with your knowledgeable, imaginative, inspired, resourceful, eager-to-contribute employees who are quietly working in their cubical or on a production line. Capitalize on this great hidden treasure you are already paying for.

Every little improvement—hundreds a year— will make your business better and better, until one day, you have a smooth-running, people-pleasing, money-making system!

P.S. – Get the “Business Improvement Suggestion Form” in The Zone.

Lift Your Employee Performance by Adding the Fun Factor!

Ron Carroll

The combination of great people and great systems produce great companies. When you add the elements of fun and competition, when you turn your business into a game and keep score, when you show your employees how they can “win,” you will discover the grand secret to developing a truly remarkable company. 

Do Your Employees Have Fun?

Volkswagen has a website, www.thefuntheory.com, dedicated to the idea that something as simple as “fun” can change people’s behavior for the better. They invited folks from around the world to submit their proposal for solving everyday problems by adding the element of fun.

The winner of the contest, Kevin Richardson, USA, asked the question, “Can we get more people to obey the speed limit by making it fun to do.” The idea was so good that Volkswagen and the Swedish National Society for Road Safety actually made this innovative idea a reality in Stockholm, Sweden.

A camera was set up on a section of road where people habitually speed. Every car going by is photographed and the speed recorded—24,857 cars in three days. Every speeding person is sent a citation and assessed a fine. The money from fines goes in a general pot. Every driver who obeys the law is also photographed and entered into a lottery with the chance of winning the big payoff. This fun reduced the average speed by 22% and largely solved the speeding problem.

 

Camera Speed Lottery

 

The “Speed Camera Lottery” and several other behavior-changing and problem-solving “systems” are shown on Volkswagen’s website. You can view these brief but thought-provoking videos at www.thefuntheory.com . For example, see how you can make it fun for people to throw trash in a bin rather than on the ground, or take the stairs instead of the escalator for better health. The fun-factor gets amazing results!

 

Piano stairs

(The piano keys on the stairs play notes when walked on.)

 

AND YOU CAN DO THE SAME THING WITH YOUR BUSINESS SYSTEMS!

One of the great challenges I have in helping people become Systems Thinkers is that they confuse systems with procedures.  FUN is one of the elements you can use to turn a boring procedure into an amazingly effective and highly productive business system. I’ve seen system productivity double by adding this one element.

FUN – An Organizational Strategy?

Ann Bruce and James Pepitone write in their book, Motivating Employees, “Top organizations such as Southwest Airlines, Ben & Jerry’s, Starbucks, Disney, Nordstrom, Wal-Mart and Microsoft use fun as an organizational strategy. These leaders have realized that when employees are having fun, they just perform better.”

Team competition, bettering your personal best, financial incentives, victory celebrations, company recognition, pizza Fridays, summer picnics, and dozens of other things tied to performance can help to create a culture of fun and excellence.

Remember: People usually work harder at play than they work at work! When an organization promotes fun, employees seem to have more energy, self-esteem, enthusiasm, team spirit, and positive attitudes. This translates to higher productivity, greater creativity, and better customer service.

Now go elevate your business systems and have some fun!

Related Articles:
The WOW Factor: Six Ways to Supercharge Your Business Systems! (Part 1)
The WOW Factor: Six More Ways to Supercharge Your Business Systems! (Part 2)
Turn Dust-Gathering Procedures into Business Systems that Wow!
Business Systems vs. the Misunderstood Operations Manual
Does Your Business Have a Double McTwist 1260?

Just Retired
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It's time for me to focus on other things. Many hours and dollars have gone into my software and written materials over the last fourteen years. Now it's time to give back. This is not a gimmick. There is nothing to buy. I give it all to you for free. If you use the software and apply the principles, you can create a remarkable company. See Below. Have fun!

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Michael Gerber

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W. Edwards Deming

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