While nothing in business is magic, exactly, there are a few “magic formulas” that business owners need to master on the road to business growth. These formulas are aligned with the three parts of my BizCoach operating model, Profit + Process + People.
Formula #1 – Your Financial Formula (Profits)
As you gain a deeper understanding of your business and how you make money, you begin to put together your own personal financial formula.
It typically involves hitting a certain gross profit margin with the products or services that you sell. You have a target of what the profit gap should be. The second part of that formula is your overhead or fixed expenses. You know that to reach your profit number, your fixed expenses have to keep below a specific number or percentage.
Sales – variable expenses (typically direct labor or materials) – fixed expenses = profit
You have mastered formula number 1! Rather than feeling like your financials just happen to you, you have a sense of control and ability to make decisions to keep results on track.
Formula #2 – Your Marketing/Sales Formula (Marketing/Sales Process)
How do you get clients? You have thrown enough spaghetti against the wall to know that if you do X you will most likely receive Y in clients. That is primarily a function of your marketing budget or your sales calls. You are fairly confident that if you need revenue, you know the path of least resistance. Now you just need the energy to do it or the ability to motivate your team! (Check out the management tips here.)
Formula #3 – Your Production or Service Formula (Operational Process)
You know how to deliver a great product or service in a way that delights your customers and keeps them coming back. But at some point, you added employees, and now you want them to provide the same level of quality and customer service that you provide. Easier said than done.
With this formula you have to train, and teach, and train some more to make sure that your team is dedicated to delivering the same level of quality that you are. No easy feat. But once you do this, you have mastered formula #3.
Systems and SOPs, your playbook, mean your work is replicable.
Formula #4 – Your Hiring Formula (People)
If you are like most business owners, you have made a few hiring mistakes, but you have continued to tinker with your process and now have it more dialed in. You know what you are looking for. You know how to spot a team member or leader who will be a good fit for your company and is skilled in their role. Your list of questions, steps and processes have been perfected.
This is evidenced by low turnover rates, team satisfaction, and team members that own their work and can manage themselves.
So What Now?
The above all sounds quite simple in theory, but in actuality, you know this is tricky. So which formula have you perfected, and which one do you need help with?
Book a free 30 minute consultation. I’d love to help you pinpoint next steps in decoding your magic formulas.
