Business Growth Masterclass 16 – How to Calculate and Lower the cost of your Customers

How to Calculate and Lower the Cost of Your Customers

 

Hello there and welcome to the 16th instalment of my Business Growth Masterclass. The step by step guide to building the business you always wished you could have.

 

Today, we’re going to look at how to calculate the cost of your customer and a few techniques you can use to lower that cost and increase the profitability of each of your customers, both old and new.

 

As ever though, before we get our teeth into today’s material, lets just check on actions from the last Business Growth Masterclass:

 

Did you do your homework?

  • You have a system in place for measuring your conversion rate on a daily, weekly, monthly and by-campaign basis.
  • You have chosen two new strategies to implement for an increase in conversions, and are measuring the results.

Great. Homework done. Now let’s get started with today’s Business Growth Masterclass.

When you buy a product, you want to receive the most for your money. The same is true for customer acquisition.

customers

Generating leads and converting those leads into paying customers is a process that costs you money. You can attribute a piece of your marketing and sales costs to each of the customers that you successfully attract and convert.

Essentially, you buy customers for your business.

Let me repeat that: essentially, you buy customers for your business.

Please read this again and understand it on a very basic level. If I sent you to the store with £40 to buy a white t-shirt, you would be successful. Well you can do the same thing with GOOD clients (ones that pay, stay and refer). Do not be scared to go into the business of buying good clients. This one distinction can completely change the way you do business and your level of success.

So when you think of your customer as your most valuable asset, you’re absolutely right. They’re an investment in your business that you expect to see a return from.

As with any investment, you not only want to see a return, but you want to see the greatest return possible. In this case, you could try to reduce your marketing budget, or boost your profit margins, but the easiest way to minimise the cost of a customer and maximise your return is to increase the number of times each customer buys from you.

In the five-step process, this is called increasing the number of transactions in your business. Instead of constantly chasing down leads and buying new customers, your work is to keep the customers you have bought coming back to spend more money.

In this Business Growth Masterclass we will cover:

  • The financial impact of repeat business
  • How to figure out the average number of transactions of your business
  • How to calculate your average customer acquisition cost
  • The lifetime value of your customers
  • The 80/20 rule and letting some customers go
  • How you can lower the cost of your customers to boost profits

Increasing your repeat business is one of the easiest and most cost-effective ways to boost your bottom line.

Turning a single transaction customer into a repeat or lifetime customer is one of the simplest ways to boost your bottom line. It costs very little and is largely based on the experience you can create for the people who buy from you.

With a little bit of time and thought, you can turn single-transaction customers into loyal patrons, or even big fans of your business. This not only translates into returning customers, but also earns customers that refer you to their friends.

Financially, the more times a customer buys from you, the lower their acquisition cost becomes. You only have to buy customers once, so when that figure is spread over several transactions it goes down.

Here’s a chart of how a 10% increase and 30% increase in average number of transactions can impact your bottom line.

Starting Point 10% Increase 30% Increase
Leads 4,500 4,500 4,500
Conversion Rate 30% 30% 30%
Customers 1350 1350 1350
Transactions 1.3 1.43 (10% increase) 1.69 (30% increase)
Average Sales Value £140 £140 £140
Revenue £245,700 270,270 319,410
Margins 24% 24% 24%
Profit £58,968 £64,864.80 £76,658.40

What is the average number of transactions for your business?

If you have a system for managing customer accounts and tracking purchases, this next step will be really straightforward. If you have a computer-based point of sale system, your reporting functions may even be able to calculate this figure for you.

To figure out the average number of times each customer buys from you, you need to choose a time period (the last 12 months is a good starting point) and a sample of customer accounts with the number of times each has purchased from you. Take 50 at random, or all the customers starting with the letter “T” as an example to illustrate the point.

Then, add up the total number of transactions for each of the customers in your sample, and divide the total by the number of customers in your sample. This is your average number of transactions. For example, if I have a sample of 10 customers, my calculation might look something like this:

4 + 5 + 2 + 8 + 5 + 1 + 2 + 2 + 2 + 6 = 32 32 / 10 = 3.2 average number of transactions

If you don’t have an existing data source for this information, survey your customers or start your own tracking system to use over the course of a week or month. Note on your customers’ accounts when they purchased and what they purchased, or keep a tally at the cash register. If you can’t survey your customers or create a viable database, then just estimate the figure based on your observations over a week or over the history of your business.

Remember that the average number of transactions is going to be different for every business. Grocery stores will have far different figures than furniture stores, computer stores will have dramatically different numbers than coffee shops based on the frequency that people need those products or services.

What is the average customer acquisition cost for your business?

Do you know how much do you spend – on average – on each customer you acquire? To calculate this, simply divide the amount of money you spend per month (or per campaign) on lead generation by the total number of sales in that month (or campaign duration).

For example, if you spend an average of £5,000 each month on advertising, and you generate about 250 unique sales per month, your average customer acquisition cost is £20. Or, if you spent £10,000 on an ad campaign over three months, and generated 400 campaign-specific sales, your customer acquisition cost would be £25.

To evaluate this figure, look at it as a percentage of your average sale. Of the 250 unique sales in first example from the paragraph above, and say the average purchase was £75, £40 of which was margin. Subtract the customer acquisition cost from your margin, and you’ll have the average profit of each sale, in this case it’s £20.

What is the lifetime value of your customers?

Now, assuming your average customer acquisition cost is £20, let’s take a look at what would happen if you turned that customer into a lifetime customer. What value does that customer have to your business?

First let’s look at the value of a single transaction customer:

Customer Acquisition Cost £20
Number of transactions 1
Average value of each transaction £75
Average profit margin £40
Margin minus acquisition cost £20
Total value of customer £20

Then, assume that an average customer ‘lifetime’ with your business is about five years. Calculate as you did above, spreading the customer acquisition cost over the total number of transactions.

Customer Acquisition Cost £20
Number of transactions 15 (assuming 3 per year)
Average value of each transaction £75
Average profit margin £40
Margin minus acquisition cost £38.67 (£40 – [£20/15])
Total value of customer £580

Here’s a more in-depth look at cost of a single transaction customer, in comparison to a tripe transaction customer or a lifetime customer:

One Time Year Lifetime
Customer Acquisition Cost £20 £20 £20
Number of Transactions 1 3 15
Average Value of Each Transaction £75 £75 £75
Average Profit Margin on Each Transaction (excluding acquisition cost) £40 £40 £40
Actual profit per Transaction (profit margin – [customer acquisition cost / # of transactions]) £20 (£40 – £20) £33.33 (£40 – (£20/3)) £38.67 (£40 – (£20/15))
Lifetime Value of Customer (in profit)(actual profit per transaction x # of transactions) £20 £100 £580

Based on the chart above, you can see that the lifetime customer who purchased from you 15 times over five years brought your business £580 in profit, in comparison to the single transaction customer who brought your business £20 in profit.

Both customers cost you the same amount – £20 – but there is a £560 difference in return on investment! Repeat business – the average number of transactions per customer – makes a huge difference on your bottom line.

Give yourself permission to fire some of your customers.

Everyone has a group of customers they enjoy doing business with and are pleased to continually serve (our A-list). Likewise, we all also have a group of customers (our C-list) who are a pain to deal with. They may consistently complain, only take advantage of special offers or never spend much money after a bunch of hassle.

Like a good business owner, I bet you treat every customer with respect, and give them the attention they need – even the C-list. Here is where the 80/20 rule applies: 80% of your revenue comes from 20% of your customers. That 20% of your customers is what we call your A-list.

The important point here is that while you’re busy trying to make your C-list customer happy, you’re missing the opportunity to give your A-list customer the level of service they deserve. Since the majority of your revenue comes from your A-list customers, that’s where you should be focusing your efforts.

So, give yourself permission to fire your C-list, and stop bending over backwards to address their concerns. Don’t let them rule your time. Spend your efforts making your A-list happy, and their purchases will more than make up the difference.

Let’s look at some strategies that will help you boost your repeat business, and your bottom line.

Customer Service

Everyone- even businesses with high customer service standards – can improve the service they provide to their customers. This phrase is used a lot, but it’s true: Under promise and over deliver.

If you’re looking for new ways to impress your customers with service, conduct a survey of your existing customers and ask them how you can enhance or streamline their experience dealing with your company.

When you establish standards of customer service, make sure they are:

Consistently implemented by everyone in your business. Every customer who walks through the door experiences the same level of service, and receive that same service every time they walk through the door.

Convenient for your customer. Make the purchase process seamless for your customer. Think of all the steps your customers has to take from driving or walking to the store until they leave with their purchase, and try to eliminate any inconvenient elements.

Driven by the needs and wants of the customer. Understand how your target market wants to be treated when they’re purchasing from you. What do they value most from the experience? High end linens, or fast service? One-on-one assistance, or ample space and time to browse?

Newsletters

Use newsletters to establish and maintain regular contact with your customers. This is an easy, time-effective and cost-effective customer retention strategy

You’ll spend an upcoming Business Growth Masterclass learning how to create and send effective newsletters, but the most important point to remember is that the newsletter (just like all other marketing materials) needs to be focused on the needs and interests of your target audience.

The most popular and environmentally friendly form of distribution is through email. This is highly cost effective, as some web-based programs start at just £10 per month, and can be customised to your business’ graphic standards.

Here is a list of the types of content you can include in your newsletter:

  • Expert advice or opinion
  • New product or service features
  • New offers or promotions
  • Company news
  • Customer surveys
  • “Missed you!” emails
  • Event or closed-door sale invitations

Added Value

Find ways to increase your customers’ perception of value so they feel that their money goes further at your business compared to the competition. Value added products or services not only add to your average Transaction value but create repeat customers by:

Making a great first impression. Providing a customer with more than they expected – something goes beyond meeting their needs – establishes a solid first impression of your business. They learn to associate the experience of shopping at your business with pleasant surprises, which is a huge draw for returning customers.

Giving them a reason to come back. The perception that your products or services have a higher value than the competition will convince your customers to purchase from you, and refer their friends. The addition of new value-added products or services will keep them coming back.

Here are some examples of added value:

  • Free shipping/delivery with minimum purchase
  • Premium product or service line
  • Bonus gift with minimum purchase
  • Complementary product packages
  • Guarantees or risk-free purchases

happy customer

Incentives and Customer Loyalty Programs

A common form of customer retention is to provide incentives to customers to entice them to come back and buy from you.

A systemised form of incentives is called a Customer Loyalty Programme – and I bet you’re part of several. Loyalty programs work because they provide a consistent visual reminder of your business through a card, key fob, rewards vouchers, or other such items, and give the customer a financial incentive to purchase from you instead of your competition.

These programs vary from simple cards to complex rewards structures, but they don’t have to be complicated or costly. Plus, once they’re in place, they’re super easy to maintain. Loyalty programs are also great market research tools because you can collect a wealth of information on the signup form, maintain a detailed database and monitor their purchase habits.

You’ll spend an entire Business Growth Masterclass learning how to set up a loyalty programme from start to finish, but here are the basic structures to give you an idea:

Loyalty Cards Provide a wallet size card and use a stamp or punch to track their purchases until they reach 10. When they reach the magic number, the next product or service is free.

Rewards Dollars Return a certain percentage of each purchase to the customer using coupons that can only be spent with you.

Rewards Points Award a certain percentage of each pound they spend to a points account. These points can be used to spend in-store, or on special items brought in for points-holders only.

Membership Amenities Produce membership cards, and give your members access to services, discounts or amenities that other customers do not have access to.

Remember, each of your customers is a valuable asset that you have purchased to grow your business.

Treat your customers like you would treat good friends, and offer them the perks and rewards they deserve for their loyalty. I find that this approach is also a lot more rewarding because I get to know my customers, and some of them actually become friends.

Of course, there will always be a few clients you’ll never please, so keep the 80/20 rule fresh in your mind. Don’t be afraid of firing the customers who drain your time and your resources. Your A-list will more than make up the difference in revenue.

In the next Business Masterclass, I’ll show you a ton of ways you can add value to your product or service, and boost the pound value of each and every sale.

As always, let me know if you have any questions.

You can  use the contact form below to discuss and get help with the topics covered in this, or any of the previous Business Growth Masterclasses.

Until next time, good luck!

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A Little Coaching Exercise for the New Year

Hi everybody,

 

Each year as we approach the close of one year and the beginning of another I go through an exercise with my coach which I find extremely beneficial and rewarding. I have asked if I can share it with my clients past and present, and other close contacts.

 

This is way beyond creating New Year resolutions and is much more about moving on to the future with renewed optimism and focus. I hope you have the chance to do it rather than just read it. It is important that you write down the answers rather than just think them through especially as it is a really enjoyable exercise to complete.

 

Step One

 

Look over the past year and:

A)   Make a list of all the wins, successes and breakthroughs in the past year. Look at all areas of your life. What do you want to celebrate and acknowledge?

B)   Make a list of all the losses, disappointments and breakdowns in the past year. What do you want to forgive yourself for and release?

C)   Bring this list to our session. We will discuss what it means to be “complete” with each item. Incompleteness holds us back from taking on the next exciting opportunity.

Step Two

 

Looking over the past year, what are the 5-7 lessons you have learned?

Choose the lessons that you want to carry over into the New Year.

What learning is there to deepen?

Some examples of learning:

q  I learned to windsurf, play bridge or speak Spanish

q  I learned that my mistakes do not mean I am a failure

q  I learned that more is possible for me than I ever imagined

 

As you review your goals and commitments for 2014, which areas do you want to maintain, bring into the New Year, revise, be complete with?

 

Step Three

 

Consider these questions as you prepare your vision for 1 year from now:

  • As you stand on one of the peaks looking forward, what future is calling?
  • What is the essence of what is next for you?
  • What do you want to achieve or accomplish?
  • What risks and challenges will you take on?
  • What more of you wants to be expressed — for example, self-love, self-compassion, self-value?
  • What self-lies (e.g., “I am not powerful.”) are you ready and willing to end?
  • What new level of abundance and success are you willing to embrace?

 

Imagine one year ahead, and write a list of all the wins, successes and breakthroughs for the coming year. What would you like to learn or accomplish by the end of the next year? Write this list as though it has already happened. Make it as long as you choose, and be sure to look at each area of your life.

Prioritise the list. Look at how each item fits with your values, make plans and set accountability for the next year.

 

Step Four

 

Much like the Chinese tradition that gives names to each year, choose a name for this coming year. Use images, symbols or ideas to name the coming year. What image allows you to step more fully into what you want to be, and are already becoming? Find a name that stretches your imagination and moves you into greater possibility.

Examples: Year of Balance, Year of the Soaring Eagle, Year of the Wild Woman Set Free, Year of the Creative Genius, etc.

Step Five

 

Finally, consider where we are in our relationship:

  • What do you want more of, less of, the same of?
  • In what ways might this relationship and our work better serve you?

 

Please try PRINTING IT OFF and DOING IT… it may not be as artistic or colourful as a Greetings card but I guarantee the positive attitude, actions and focus will last for a whole year.

Have some great time off and a prosperous new year.

Cheers for now,

 

David T Preston

Business and Executive Coach

Business Growth Masterclass Sesssion 7: How to Identify Your Target Market

Hello there friends, and welcome to the seventh installment in my series “The Business Growth Masterclass”.

I’ve called this session:

How to Identify Your Target Market

But first, as usual, lets recap the homework set in the last installment of the Business Growth Masterclass.:

After the last session, “Managing Your Time To Make More Profit”:

  • You know what your time is worth on an hourly basis.
  • You know what time(s) of day you are most productive.
  • You have five strategies for improved personal time management.

 Yes? Brilliant! Now let’s get on with this months material.

Determining your target market is your first job as a business owner

This Masterclass officially marks the beginning of using Step One of the five-step process, (see November’s Masterclass) which shows you to how to bring a high number of qualified leads into your business.

Qualified leads are the group of people who are most likely to buy from you – they have a current need, problem or desire that your offering will solve or serve. These people are your target market, or ideal customers. Qualified leads are generally easier to convert into customers, so a high number of qualified leads mean a high conversion rate and, of course, more sales.

A great example of this going wrong… you own a hot dog and burger business and are standing outside a large conference venue, waiting for the lunch-break so you can take advantage of a huge rush of people in a short period of time (a great way to do business) to give away small hotdogs to generate customers for your business down the road. You have prepared all your toppings, flyers with simple directions, arranged for staff to handle the rush and stocked up to the gunnels to ensure you do not miss a single prospect. The group comes out and you manage 25 free hot dogs given away when you were expecting 500.

What went wrong? You did not realise the conference attendees were members of a health and wellness group comprising of 95% vegetarians!

This wouldn’t happen to me I hear you say, but the same kind of mistake COULD be made by any business owner – in fact, a lot of the businesses I work with have made just this mistake, but in the context of their own marketplace. The morale of the story; if you are talking to the wrong audience it doesn’t matter how good your offer is – you are wasting your time. Talking to your target market is absolutely CRITICAL to successful marketing.

So, your first job as a business owner is to work out who your target market is, and how the people in it think and behave.

In this Masterclass we will cover:

  • How your target market influences your marketing choices
  • A step-by-step process for identifying your target market
  • Types of target markets
  • Examples of target markets
  • Market research strategies

Generating qualified leads will make it easy to boost your conversion rate, because your prospects will already want or need your service.

A target market is simply a group of people with something in common – things like age, gender, opinion, interest, or location, – who will purchase a particular product or service. Your market can be broad or specific in scope, and it is unique to each business or industry.

Knowledge and understanding of your target market is crucial to the viability of your business. You have to know if there is enough demand for your product, or enough interest and need for your service. You have to know how to communicate with your customers, and understand their thoughts and behaviours.

Without a comprehensive understanding of your target market, you can’t make smart choices about your introductory offers, marketing strategy, pricing structure, and product or service mix. It’s kind of like driving a car with a blindfold on – you’d be headed for disaster.

In addition to being essential to confirm assumptions and understand purchase motivations, market research is something you will need to get into the habit of doing on a regular basis to monitor trends and stay ahead of the competition. Identifying your target market is not always easy, but I promise it will pay off in spades, so stay committed to your efforts as you work through this Masterclass.

Let’s start with an easy, step-by-step process to identify your target market.

You probably already have an idea of who your target market is – or who you want it to be. Start by describing who you think your target market is in two or three sentences on a sheet of paper.

As you work through this process, you may find that you were correct in your assumptions, or not. Either way, this Masterclass will uncover invaluable information about your audience.

When you set out to identify your target market, you need to find the group of people that has these four characteristics:

  • They have a particular need, want or desire.
  • They have the financial ability to purchase your solution to their need, want or desire.
  • They have the power to decide to purchase your product or service.
  • They have access to your business, through a physical location, Internet or catalogue

First, take a look at what your product or service offering is to your potential customers.

To find the group of people with the characteristics listed above, you first need to answer the following questions about your product or service:

1. What is the need, want or desire that my product or services fulfils?

 Does your offering primarily fulfil a desire, or serve a need or cater to a want? What is that desire/need/want?
2. What does my product or service cost?
 Do you offer a high-end product, or low-cost alternative? Do you sell large items, like a kitchen appliance, or small items, like household cleaning products?
3. Who makes the decision to purchase my product or service (who has the power or authority)?
 For example, if you provide a product or service for children, their parents are the people who make the decision to make a purchase.
4. How are my products or services accessed?
 Does your ideal customer need to live in the same town or region as your business? Or can they access your products online, or through a catalogue?

Demographics 

Now let’s look at the demographic characteristics of the people that need, can afford, locate and decide to purchase your offering. Some of the information in this table may be less important than others (like ethnicity or religion) depending on your product or service and the market you are trying to attract.

Age In general terms, what is the age range that my product or service caters to? Kids? Teens? Adults? Seniors?
Income How much do they have to make to afford my product? Is this single or double household income? Low? Medium? High?
Gender Does my product or service appeal to men, women, or both?
Generation What is the generation of my customers? Based on the age range I identified, are they baby boomers? GenX? GenY? Where do they stand in the overall family life cycle?
Nationality Is nationality relevant to my product or service?
Ethnicity Is ethnicity relevant to my product or service?
Marital Status Are my customers married? Single? Divorced?
Family Size Does my product or service cater to large or small families? Is family size relevant?
Occupation or Industry Does my product or service appeal to people in a certain occupation, or industry?
Religion Is religion relevant to my product or service?
Language Is language relevant to my product or service?
Education What level of education do my primary customers have? High school? University?

Psychographics

Now lets look at your target market’s psychographics. Psychographics are the qualitative characteristics of your target audience, like personality, values, attitudes, interests, or lifestyle. These characteristics can give you a lot of insight into how to best interact and communicate with your target market.

Lifestyle What kind of lifestyle group does your audience fall into? Are they conservative or trendy, travelers or soccer moms? Are they thrifty or extravagant?
Values + Beliefs What are their values and beliefs? Would you consider them environmentalists or safety conscious?
Attitude What kind of attitude do they have? Are they positive or negative? Open or critical? Easily led or opinionated?
Motivation Are your customers opinion leaders or followers? Do they tell others what products they need, or do they need others to tell them what is trendy and what works?
Activities + Interests What do they do in their spare time? What are their hobbies and interests?
Social Class What social class does your audience belong to? Lower, middle or upper? How much extra money do they have to spend on luxury items?

So, now that you’ve gathered all this information, what does it tell you about your ideal customers?

You’ve done enough research now to create a picture of who you think your ideal customer is. Being as specific as you can, write a 1-2 sentence statement about your target market.

For example:

  • My target customer is a successful young professional; a middle-class man aged 20 to 35, who is single, makes more than £10,000 per year, and is physically fit. He is university educated, and has an active interest in economics and politics.
  • My target market is affluent new mothers; married women with children under five years old, between the ages of 25 and 45, and have a household income of at least £50,000 annually. She is the trend and opinion follower, and her purchase motivations are driven by her peer group.

Now that you’ve made some educated assumptions about who your target market is, you’ll have to use some market research strategies to confirm them.

Market research is the study of a particular group of consumers – or markets. It is one of the most valuable activities you will work on as a business owner, since it keeps you connected and informed about your customers thoughts, motivations and behaviours. Market research also minimises risk and assumption-based decision making, which will improve the success rate of everything you do for your business.

When you begin your market research, you need to start out with a clear question that you want answered. Otherwise, you’ll quickly get off track and fail to end up with the information you really need. Think about questions like:

  • Am I right about my target audience assumptions?
  • Is my target audience interested in my new product or service?
  • I need more information about my target audience’s purchase motivations
  • What new trends are my target audience following?
  • What recent economic developments have impacted my target market?
  • How can I improve my customer service?
  • Has my target market changed in the past year?

Market research needs to be conducted regularly – regardless of how long you have been in business, or how well you know your target market. Trends shift, and environments are impacted by economic and political factors beyond your control.

There are two main types of market research – primary and secondary – and three main areas of market research – consumer, competitor, and environment.

Here’s a really helpful chart to use to organise information when you’re conducting your market research. This will help you conduct research that is comprehensive and cost effective.

PRIMARY
(First-hand information gathered from your customers or about your customers. i.e., customer surveys, observations about the competition, etc.)
SECONDARY
(Second-hand data or research that has been completed by or for someone else, but can be applied to your objectives.)
CUSTOMER
(Demographic, behavioural, psychographic and geographic characteristics.)
> info right from the source
> can be time consuming and costly – but most valuable
> most current
> most specific
> statistics
> trade journals
> public surveys by larger companies
> government publications and surveys
COMPETITION
(Marketing, product and consumer observations you can make or gather from your competition.)
> what works, what doesn’t
> adding value to existing offering (to give yourself an edge
> types of products that consumers are interested in
> types of lead generation strategies your competition uses, and the types of potential customers that you currently see
ENVIRONMENT
(Social, economic and political trends that may impact your business or your customers thoughts and behaviours.)
> newspapers
> trade journals
> consumer reports

Strategies for cost-effective secondary market research

Demographic Research (Customer)
Basic demographic research is something you won’t have to conduct yourself. Every town or region will have demographic information available online, or in town halls, libraries and business centres. National and regional statistical information is also available online or through government agencies.

Online and Consumer Research (Customer and Environment)
Primary market research can be expensive, so secondary research on general consumer behaviour and purchase data can be extremely useful for small businesses. Some information will be available online, while other information (usually free) will be available at your local chamber of commerce and business centres.

Primary market research strategies you shouldn’t miss.

Ground Research (Customer or Competition)
Spend some time in your local area at different times of the day observing and talking to the people who live, work, or spend time there. What do you notice about the area? How well is it taken care of? Why do people spend time here? Is anything missing? Get a sense of their age, gender, clothing and any other features.

Competing Businesses (Competition)
If you have direct competitors in the same local area, spend some time being “their” customer and making observations about their business. How do they advertise? What market are they targeting? Is there a niche market that is being missed?

Surveys (Customer or Competition)
Surveys are the most popular way to gather first hand information from your existing and potential customers. Take your time to administer them carefully and thoughtfully – surveys can get complex and variables can be high.

  • Keep your questionnaire short and focused on getting at the information you need to answer your market research question. This will encourage a higher response rate.
  • Remember that your information will only be as good as the people you ask for it. Try to get as broad a cross section as possible. Depending on your market research question, you may not want to limit it to your existing customers.
  • Choose a survey method – telephone, web or paper-based – and understand the pros and cons of each. Research some survey templates, and spend more time than you think you need to on crafting your survey.
  • Include basic demographic questions on your survey so you can cross reference responses with factors like age, income, sex, and profession.

Website Analysis (Customer)
Use a website tracking system like Google Analytics to monitor how visitors to your website behave and use the information available. These programs will allow you to see how many people visit your site, where they are from, what pages they are looking at and how long they spend on your site.

Customer Loyalty and Purchase Data (Customer)
Your point of sale system (if you have one) – depending on the level of features it offers – may also be able to run reports on customer purchase patterns and trends. If you have a customer loyalty program, you can keep track of purchase information in each customer’s file or account. The type of information you’ll need to keep track of here is behavioural: brand loyalty, product or service usage, purchase frequency, and readiness to buy.

Focus Groups (Customer)
Assemble groups of six to 12 people and ask them general and specific questions about their thoughts, opinions and habits as related to your marketing question. Be sure to assemble a cross section of people that is representative of your target market.

When you’ve completed your market research, analyse what you’ve learnt. Go back to your original question, and critique the outcome.

How has your market research supported the question(s) you set out to answer? Were your original assumptions confirmed or refuted?

  • Does my target market exist in my geographic area?
  • Does my target market actually want what I’m selling?
  • How does my target market want to purchase from me?
  • Is my target market interested in my new product or service?
  • How does my target market want me to communicate with them?
  • Is my target market large enough in my local area to support my business?
  • Are there areas of my research I could dig into for more information?

You may discover some hard facts to face about your business. Perhaps there is not a large enough market base in your area to support your business. Maybe you’ve spent a few hundred or thousands of pounds going after the wrong type of customers. This is all okay – don’t get despondent – it’s all valuable information that you can work with to make better decisions about your marketing strategies and product or service offerings in the future.

If you have flexibility in your product or service, you may be able to find ways to enhance your offerings and extend your target market to include more people, or a larger share of the marketplace.

Your market research is ongoing – each time you talk to a customer, supplier or sales rep, you’re gathering information about your clientele, and thus conducting market research. Consider keeping a log at the point of sale for staff to use to record customer comments and complaints. Review the log for customer returns, and reasons for returns, to get valuable feedback on your offering.

Remember, audiences, trends, products and services change, so stay ahead of the curve and keep on top of your market.

Plan to make market research a regular part of your business, and schedule time and money for primary research at least once a year. This is the only way to stay ahead of the competition when it comes to trends and environmental changes beyond your control.

If you would like some help with the ideas introduced in this Masterclass, or to discuss any other aspect of your business growth strategy, use the following form to get in touch:

The next few Masterclasses are about applying the information you have learned about your target market to refine your marketing strategies. You’ve clearly identified who your target market is, and how those people think and behave, so your next task is to determine what to say and how to reach them.

In the next Masterclass, we’re going to look at your marketing message and see how clearly you’re communicating with your audience. The strength of your marketing message is the backbone of your marketing materials, and a huge factor in the success of your lead generation strategies.

Business Growth Masterclass – Session 6. Managing your time to make more profit

 Welcome to the sixth instalment in my blog series The Business Growth Masterclass.

I’ve called this session:

Managing Your Time to Make More Profit

But first, as usual, lets recap the homework set in the last installment of the Business Growth Masterclass.:

Checkpoint:

  • Your workspace is organised for productivity and minimises distractions.
  • You have cleaned out and cleared out areas in your office or business where old stock or surplus office supplies are kept.
  • You have begun to organise your paper and electronic filing into systems, with the help of your staff.

All done? Fantastic! Now let’s get on with this months material.

Small business owners too often confuse being busy with being successful. They’re not the same thing!

In this session we will cover:

  • How you should treat time like money
  • How to calculate what your time is worth
  • The five biggest culprits of time theft
  • Where your time goes in your existing schedule
  • Strategies to allow you to take control of your schedule

If time were money, how would you manage yours?

Time is far more precious than money. There are a finite number of days that you will spend on this earth, while money is something you can usually get more of.

If you are 35 years old with a life expectancy of 75… you have already spent 12,775 days on Earth and have 480 months left to fulfill your life destiny. If you plan to retire at the age of 50 you have 180 months to make enough money to retire (have you thought about how much money you will need to sustain your lifestyle in retirement?) and in those months 1,440 days are weekends… so you have 3600 workdays to make it all happen. What are you waiting for… time to stop confusing being busy with being successful!

The fact is that many business owners actually manage their money as though it is more precious than their time. They started the business to choose their own hours, spend more time with their family, and be their own boss. But, somewhere along the way the only goals that mattered became the financial ones. Or, the only item worth measuring and managing was money.

Your time will never be managed for you – you have to make a decision to choose to spend your time wisely. To take ownership of your own schedule, and use the power you have to change what isn’t working. I’ll share a few tools to get you started, but first let’s take a look at what your time is worth first, to attach time to money.

Your time has a price tag, and sometimes it’s much lower than you think.

Here’s a really simple exercise to determine what your time is worth based on your annual income and the number of working hours in a year.

Target annual income

A.

Working days in a year

B. 235

Working hours in a day

C. 7.5

Working hours in a year

D. 1,645

A / D = YOUR HOURLY WORTH

E.

It’s unrealistic to assume that each of the 1,645 hours in a year is a productive one. Various studies have put actual productivity at anywhere between 25 minutes and four hours per day. That’s a lot of room for improvement!

Now, this calculation doesn’t factor in overtime hours, taxes, or expenses. If you work as a consultant for an hourly rate, it doesn’t factor in the cost for you to provide your services. The point is, this is your hourly worth in the best-case scenario.

When you start thinking about time management, the goal is to get more done in less time, and thus increase your hourly worth (among other benefits, of course!).

There are five major things that drain your time. But don’t worry, it’s really easy to fix the leaks.

Email
Your email is a consistent distraction. With the mail programme running all the time, emails can distract you as they arrive. Or, you’ll find yourself checking for new messages every 15, 10 or five minutes. Writing, reading and responding to emails can easily monopolise your time, because they seem like an ever urgent and important task.

Mobile Phone and/or Personal Organiser
Your mobile phone has most likely given you increased freedom from your workplace, but mobile devices seem to have also taken away your freedom to choose when you work. You can work outside of the office, but this often means you also work evenings and weekends when spending time with your family and friends.

Open Door Policies
While you want to be open and accessible to your staff, sometimes you can make yourself too accessible. Open door policies have the potential to create a daily mass of employees lined up at your door seeking immediate answers for non-emergency issues.

Meetings
Unstructured, unnecessary, run-on meetings can gobble up hours for no reason at all. Especially as a business owner, your presence may be requested at a variety of meetings, but it’s not always required. Days spent in back to back meetings often mean that your workday starts at five or six instead of nine.

You
Since effective time management is a choice, everyone is guilty of letting themselves sabotage their ability to work productively and efficiently at all times. It’s easy for business owners to avoid separating business hours from leisure time and let the two run together. We all have distractions that we fall into from time to time.

“It takes the human mind 15 minutes to properly focus… if you get interrupted every 7 minutes… you have a huge problem!”
Karl Bryan, CEO, Author, International Speaker

Now you need to take some time to figure out where your time actually goes, so you can see what leaks need to be repaired.

I have some worksheets you can use to assist you as you complete this personal time management research exercise, or you can make one up for yourself.

You’re going to take a good long look at how you spend your time so you can paint a clear picture of your current situation. Once you understand your own personal habits and patterns, you can start making changes that will have the greatest impact on your own schedule. You’ll learn how to be a better time manager.

1. Complete a Time Audit for three working days in a row.

Use a Time Log  to record how you spend your time in detail for three working days (it is a bit of a bind…s  don’t try to get it perfect as that will just stop it from happening… but just do it. And remember ‘the more you defend your excuses… they more they own you!’).

Be honest with yourself, and be as specific as possible. If you notice something about what you’re doing, or which distractions have the greatest negative impact, log these notes as well. The more information you can record, the better.

2. Take a look at your time records, and categorise the different ways you spend your time.

Use different colored markers or highlighters to shade the blocks of time you spent on various activities. You can create your own categories, or use the ones below:

  • Travel
  • Eating, including preparation
  • Personal Errands
  • Exercise
  • Watching TV
  • Sleeping, including naps
  • Personal computer use
  • Being with family / friends
  • Internal meetings
  • Emailing (checking, reading, returning messages)
  • External meetings
  • Telephone, (checking and returning messages)
  • Administrative work
  • Client work
  • Non-client, non-administrative work

3. Based on the categories you created, go through each of your days and decide if you have spent enough, too much, or too little time on each main task.

Based on your observations, answer the following questions:

  1. What patterns do you notice about how you spend your time during the day? When are you at your most productive? Least productive? Most or least interrupted?
  2. Write down the four highest priorities in your life right now. Does your timesheet reflect these priorities? (Show me your schedule and I will show you your priorities!)
  3. If you have more time, what would you do?
  4. If you had less time, what wouldn’t you do?
  5. Could you remove the items in question four and add the items in question three? Why or why not?
  6. Is procrastination a problem for you? How much?

Here are a series of effective strategies for improving your time management skills, and for doing more in less time.

The strategies described below will help you take charge of your schedule and use your time in a more effective manner. Grab your pad of paper and start by choosing five or six strategies to try, take some notes as you read through and decide which you will try first.

Remember this is an individual process – everyone works differently – so if you have to try a few different things to get some meaningful results, that’s okay/normal!

Prioritise your tasks

> You can’t do everything, so you need to decide what is most deserving of your time.
> Choose what needs to be completed now, what can be completed later, and what can be delegated to someone else.
> Focus on your top three priorities at any one time, and consistently revise your list so that the highest priority items are always on top, and the lowest priority items are always at the bottom.

Delegate

> You can’t do everything, so you need to decide what you absolutely need to do, and what others can finish for you.
> You also need to accept that while it may seem “faster” for you to complete a task initially, spending the time to teach someone to complete the task will save you hours later on.
> Delegation is a vital skill that you need to refine, practice and master as a manager.

Focus on your skills

> If you have a good understanding of your own strengths and weaknesses, you can use this to your advantage.
> An effective way to manage your time is to only do the things that you know you are good at, or required for, and delegate or outsource the areas where you are not so strong.

Say no

> Learn how to say no, and you will reclaim dozens of hours every week.
> It’s so easy to say yes to something in the moment, and later feel overwhelmed when that task is added to your to do list. You may feel pressure to say yes to everything as a business owner, but you do have a choice.

Keep a strict schedule

> Create and keep a strict schedule for yourself that supports your productivity, and minimises distractions.
> Include personal and work time in your schedule
> Schedule time for things like closed-door work, work planning, email and phone responses, internal and external meetings, “me time”, family and exercise.

Make decisions

> As a successful business owner, you will need to learn to make good decisions quickly and efficiently, without wasting time with deliberations.
> You can only make the best decision with the information you have, in the time frame you have to make it. No one expects you to be able to see the future – be decisive, make some mistakes, and learn from them.

Manage interruptions

> Establish which hours of the day you are most productive, and set those hours aside for yourself to finish important tasks, uninterrupted.
> Schedule open door hours, and closed-door hours.
> Schedule windows of time for reading and replying to emails, and for answering and replying to phone calls.

Manage interruptions Avoid duplicating efforts

> Take note of how many tasks are completed more than once, or by more people than necessary.
> Establish clear communication systems and procedures to minimise this, and make sure all your employees have a clear understanding of their roles and responsibilities.
> Use tools like checklists, meeting minutes and individual task assignments to minimise mis-communication and duplication in tasks.

Stop procrastinating

> If you are a seasoned procrastinator, the idea of “just stopping” is usually much easier in principle than in practice.
> The best way to overcome procrastination is to use your willpower to stop. Refining this skill will help to prevent you from procrastinating in the future.
> Try working in blocks of focused time, with breaks or rewards at the end, and break down big tasks into small manageable ones.

Effective time management is just a formal way of saying that you make good choices about how you spend your valuable time.

It really just boils down to making choices, and setting up a structure that enables you to succeed. You have to try a few different strategies and structures to see what works best for you.

Remember that time management is a personal investigation that will look different for everyone. Some people can work in the middle of a loud, crowded room, and others need absolute silence to function at a high level. Respect your own needs.

If you would like some help with the ideas introduced in this Masterclass, or to discuss any other aspect of your business growth strategy, use the following form to get in touch:

Next time, we’re going to dive into investigating what your qualified leads look like, and how you can go about getting more of them into your business.

Until then, be successful.

Business Growth Masterclass – Session 5

 Welcome to the fifth installment in my blog series The Business Growth Masterclass.

I’ve called this session:

How to Optimise Your Office for Success

But first, as usual, lets recap the homework set in the last installment of the Business Growth Masterclass.:

  • You have written down at least 18 SMART goals for yourself – nine personal goals, and nine business goals.
  • You’ve posted your goals in a visible location for yourself and your staff.

You’ve done that? Brilliant. Now lets get on with this month’s Masterclass

When you organise your work environment, you optimise your surroundings for productivity and increase your ability to work effectively.

The steps in this Masterclass will help you streamline your office, get rid of clutter and maximise your workspace for productivity. Chances are, the actions you take today to organise your office will also save you considerable amounts of money.

A disorganised office costs more to run. Supplies, tools and equipment go missing because nothing is organised or put away properly. Those things have to be replaced to get the job done, and twice as much money has been spent in the end. Plus, you spend valuable time searching for missing items, files or paperwork.

In fact, some studies have revealed that the average senior business leader spends nearly four weeks each year navigating through messy or cluttered desks, looking for lost information. Does that sound like productive time to you?

In this E-Class we will cover:

  • The psychological impacts of a clean and organised workspace
  • The financial benefits of an organised workspace
  • How to audit your work environment
  • How to implement small changes in your office that will increase productivity
  • Making sure that your office is equipped with productivity tools

If I haven’t convinced you yet, read these benefits of taking the time to create an organised and well-structured office.

> Better communication. An organised office environment encourages better internal communication. With a central area for staff communication, it is easier to share sales news, track targets, and plan and monitor projects.

> A manageable budget. Organised spaces will allow you to quickly see what you have, what you need, and when you might need more. This supports the creation and sustaining of budgets, especially for supplies and equipment.

> Increased work ethic and morale. When you and your staff take care of your surroundings, it makes the workplace a more pleasant place. Taking care shows that you value your work and the people who work for you.

> Better time management. Simply put, you spend less time looking for things and more time actually working. An organised office will complement and support your time management strategies.

So, get started by walking through this step-by-step workplace audit, and making necessary improvements as you go.

Complete the following steps by literally walking around your office with a notepad and making observations. This is intended to be a positive exercise, so try not to get overwhelmed. Small changes are the best changes to start with.

If your office is already pretty organised, complete the audit anyway and identify any opportunities that exist to improve you and your team’s work environment.

Start with your own office.

Since this is where you’re likely to need to be the most productive, it make sense to start making some changes here. Make some observations about your office as it is now, using the following questions.

  • What can be found on your desk?
  • Where are your current files located?
  • Where are your old or inactive files?
  • How many personal items are visible?
  • What is on the walls?
  • Where are your office supplies?
  • How much paper is on your desk?
  • How many files, binders or books are on your desk?
  • Where is your in tray and out tray located, and how much is piled in them?

Based on your notes and the suggestions and guidelines below, identify opportunities for improvement. Would your office benefit from a better layout? A better filing system? A smaller desktop monitor? A paper shredder?

Clear your desk of everything but your computer, your filofax (that’s if you still use one!), your current files, your inbox and your telephone. Depending on the size of your desk, you may wish to put your current files or inbox on top of a filing cabinet within arm’s reach to maximise desk space. Anything you don’t need on a regular basis should be stored out of arm’s reach.

Choose one central system for managing your notes, tasks, to-do lists, brainstorming and scheduling. If you have a filofax, use it. If you prefer electronic systems, use those. Having too many binders and notepads and calendars gets confusing.

Make a habit of tidying your desk at the beginning and end of each day. Keep loose papers pinned to your to-do list, or have clear and organised folders. Use drawer organisers to keep your stationery drawer clean and easily accessible.

Organise your loose paper, inbox and action items in a file sorter or stack of paper trays. Use categories like to-do, to review, waiting response, on-hold and to file.

Put your phone on the left if you’re right handed, and on the right if you’re left handed, so you have the appropriate hand free to take notes when you’re on a call. Keep a notepad or post-its by the phone to record messages and conversation notes.

Personal items can be distracting when they’re in your primary line of vision, and encourage daydreaming. Photos and memorabilia have a place in your office, but relocate any items that are in direct sight.

Move on to the common areas of your business.

This is a list of the areas that you may find in your business. If your business has other areas, add them to the list. Most businesses will have the top five areas listed.

  • Office supplies storage*
  • Team communication center*
  • Point of sale or reception area*
  • Printing and photocopying*
  • Staff room or kitchen*
  • Employee and management offices
  • Equipment storage
  • Product stock storage
  • Hallways
  • Shipping and receiving area
  • Financial paperwork and accounting

Move through each of the areas and answer the following questions, as applicable.

  • What is the distance between your office and areas you frequently use, like the printer or photocopier?
  • How much loose paper is found around the business?
  • What is hung up on the walls?
  • Where is the central communication point?
  • How is the team communication center organised? Is it up to date?
  • How much old stock are you storing?
  • How are your office supplies organised?
  • Are boxes and shelves labeled?
  • Do your staff members have organization systems for their own desks?
  • How many files are used on a daily or weekly basis?
  • Where are old or outdated files kept?

Again, based on your notes and the suggestions and guidelines below, identify opportunities for improvement.

Put doors on shelving so cluttered spaces are not visible. Label boxes, containers and shelves so everyone knows what goes where.

Create a consistent filing system. Provide enough shelving and filing cabinets to store files in a systemised fashion. Ensure your system keeps files out of the way and out of sight when not in use, but maintains easy accessibility.

Return or sell unused stock and overflow office supplies, like stationery. Locate other unused items that you can potentially sell or donate to create more space. Consider renting out unused portions of your office to independent consultants or small businesses.

Ensure each staff member has access to the organizational materials they need to keep their offices neat. Provide stacking trays or file sorters, and suggest systems that may help them. Remember that you can’t control their work environment, but you can provide the support they need to stay organised.

Minimise the distance between your office and the areas you frequently use (like the printer or photocopier). Locate your office so you have a clear line of sight between you and the most productive area of your business.

Finally, make sure your business has the tools you need to run an effective, cohesive operation.

  • team communication center for all team members to review on a daily basis for important information about sales achievements, targets and company news.
  • whiteboard in the team communication center or the boardroom to use for brainstorming, diagramming, project planning, marketing planning or any other strategic use. This is an excellent tool for both internal and external meetings.
  • sales board in your team communication center (a private location from clients) that is customised to your business. Use thin black tape to create columns and rows to chart sales on a weekly or monthly basis, or to compare based on weekly, quarterly or yearly targets.
  • 12-month marketing planner to keep your eyes focused on the big picture. This is where you schedule campaigns and plan promotions. Use dry-erase marker so you can make changes easily, and use color-coding for easy visibility.

At the end of your audit, you’ll likely end up with a lot of paper you don’t know what to do with, but can’t throw away. Use these effective strategies for managing paper, filing and other information commonly used by everyone in your organization.

System

Steps

Create a filing system and colour code it Group vendor files (accounts payable) and assign a color
Group client files (accounts receivable) and assign a color
Group project or product files and assign a color
Sort each filing category by date or alphabetically by name Sort vendor or supplier files by name
Sort client files by client number or name
Sort project files by project number or name
Keep tax-related documents together File all receipts, donations and other tax related information in the same filing cabinet
Make copies of documents you need to file in more than one place
Create a binder of master lists for regularly accessed information Office passwords
Financial accounts
Goals
Birthdays
Vendor contact information
Use a bound notebook Keep track of phone calls and messages
Put the date on each page
Eliminate loose notepaper
Create a business card management system Throw away old business cards
Organise cards by last name or company name in a binder or rolodex
Enter the information in a data management program, then throw away the cards
Get rid of magazines and other reading material Throw away industry magazines and newspapers
Keep relevant articles of interest
Sort them into files, if necessary

A clean and organised office is easy to sustain once it is in place.Once you make some initial improvements and set up systems to manage your data and organise your supplies, the hard part is over.

Remember to be patient with yourself. Depending on the state of your work environment, this may be a project that takes a little while. Take your time, and follow the steps in this Masterclass, and you’ll get the job done.

Next time we’re going to hone in on time management skills with Business Growth Masterclass 6. Looking forward to it!

For more information on the office organising process described above, or to discuss any other aspect of your business growth strategy, use the following form to get in touch:

Can Just Changing The Way You Think Really Help Grow Your Business?

Most business owners today aren’t happy with the amount of revenue their business is generating. They’re working longer hours, applying greater effort, spending more for marketing and receiving lower revenue. So what’s going on?

What you need to know…

If you’re not happy with your business’s current results, it’s important to remember that those results are in direct proportion to the actions you’ve been taking? If you want different results, then you MUST take different actions.

So if that’s all that’s required, why don’t business owners just do that? The answer may shock you. They can’t stop repeating their past patterns of behavior. Their past patterns have become ingrained into their subconscious mind and have established themselves as habits.

Have you ever listened to art experts accurately identify a recently discovered painting as belonging to a specific artist such as Rembrandt? How can they tell who painted that picture? Patterns… that’s how. Even though the painting may look completely different than all the others that artist painted, his or her patterns, sometimes referred to as their “style,” continuously comes through with each and every painting.

Why you need to know this…

The exact same thing happens to business owners as well. All of us have been mentally conditioned to perform our daily activities in a certain way. These activities have become habits through constant and daily repetition. The problem is that the majority of these habits… more than 80% of them… are non-productive.

Imagine what would happen to your revenue if you could reduce that 80% down to 60%. Do you realize that you would DOUBLE your income? Do you know how easy it is to reduce that 80% down to 60%… or even down to 40%… which doubles revenue again? Exciting, isn’t it?

If you have past patterns of behaviour which are acting as a barrier to the growth of your business and lifestyle and you are interested in finding out how to develop new behaviours, talk to your coach. They have the skills and experience to help you make the necessary change.

And remember, to quote the famous quality guru W Edwards Deming said – “It is not necessary to change. Survival is not mandatory.

Business Growth Masterclass – Session 4

Welcome to the fourth installment in my blog series The Business Growth Masterclass.

I’ve called this session:

How to Create, Manage and Achieve Your Goals

But first, lets just have a recap of the homework set in the last installment of the Business Growth Masterclass.

  • You understand the importance of committing goals to paper.
  • You have identified the areas of your business where you need to set goals.
  • You practice using autosuggestion and visualization regularly – or at least before important meetings, presentations and sales calls.

Well done. Now lets move on and dive into this months installment of the Business Growth Masterclass.

I didn’t plan this when I started publishing the Business Growth Masterclass, but it’s seems very timely that, at the time of year when everyone is making New Years Resolutions and setting out what they would like to achieve/have or be in 2013, that this installment of the Business Masterclass deals with the crucial subject of goal setting. It is a documented fact that people who set goals and write them down, and use them as a basic and fundamental part of the way they do things, tend to achieve much greater things than those people who don’t.

Also, there’s no point in setting goals unless they’re SMART, because SMART goals have the highest probability of being achieved.

In this session you’re going to take some time to set a series of personal and business goals that will act as milestones as you work towards achieving your business vision.

Many people set goals, but not everyone reaches their goals. Too often, goals are too vague, or too broad. “I’m going to be a millionaire,” “I’m going to be the best parent ever,” or “My business is going to make much more money this year.” They’re big, bold abstract statements that are great for dreaming and visioning, but don’t stand a chance of being achieved in a meaningful or tangible way.

Today, you’re going to work through a step-by-step process for setting goals that you WILL achieve. How? You’re going to learn how to set SMART goals, and get some tools to help you stay on track.

In this E-Class we will cover:

  • The SMART goal setting principle
  • Examples of SMART goals
  • When to review and revise goals
  • A step-by-step goal setting process

SMART goals are Specific, Measurable, Achievable, Realistic, and Time Bound goals.

SPECIFIC goals that describe details and articulate aims are easier to achieve than vague or broad statements.

Ambiguous or incomplete goals will only assist you in achieving ambiguous or incomplete results. Your goals need to be as detailed as possible so that you will achieve the specific results you are looking for.

A specific goal can be easily understood by anyone who reads it; your intention and desired results are clearly detailed and described, and the actions you will take to achieve it have been planned.

Ambiguous

Specific

I should lose weight. I will lose 10 pounds in the next two months (that’s 2.5lbs per week) by eating more fruits and vegetables and exercising three times a week.
I will work harder this year. I will increase my sales figures by 20% in the next six months by scripting and practicing my closing strategies.

MEASURABLE goals are the only kind of goals that you can actually achieve.

Your goals need to be measurable so you can assess your progress, manage your progress, and know when you have achieved your desired outcome. You can use standard measurements like time, numbers, money and distance.

When goals are measurable, they can be broken down and easily managed in smaller pieces. You can create an action plan and plot the steps towards achieving the goal. You can track your progress and revise your action plan if you need to.

Non-Measureable

Measureable

I will make more money this year. I will increase my profits by 15% this year by increasing my prices (and value I offer) by 5% each 6 months and selling my audio interviews on ebay.
I will start running this spring. I will learn to run a half marathon this spring by joining a running training group.

ACHIEVABLE goals have a better chance of being realized because they are grounded in feasibility.

You need to set goals that challenge and stretch you, but you also need to avoid setting goals that are far beyond the reach of your circumstances and skill level. It’s great to think big, and dream big, but too many people set goals that are simply beyond their capabilities and wind up disappointed. Goals that are not achievable will only demotivate and disempower you.

On the flip side, setting goals that are too easy to achieve will not help you grow as a person and as a professional. You need to strike the right balance between challenge and reality.

Unrealistic

Achieveable

I will climb Mount Everest this year. I will begin a one year training programme today, and climb to base camp in 9 months from now.
I will earn a million pounds. A million pounds is £2,739.73 per day, and £9,230.77 per week. I will earn 1 million pounds in the next 365 days starting today.

This is the part where you look at the reasoning behind your goal. It’s great to set goals in all areas of your life, but for the most part your goals will collectively achieve a common vision. The goal’s action plan can be reasonably integrated into your life, with a realistic amount of effort.REALISTIC – or relevant – goals make sense and can be integrated into your life and overall business strategy

Goals that are not realistic or relevant don’t appear to have a logical place in your life or overall business strategy, and can serve to derail you. You want to make sure that all of your efforts are working in a single, focused direction or you may run the risk of going in too many directions, spinning your wheels and never achieving your vision.

Irrelevant

Realistic

I will become a better Monopoly player, and win 25% more games. I will spend more time with my family this year by staying at home one night each weekend.
I will become a NASA astronaut. I will start my own on-line business, to compliment my existing business and add another stream, of income, by my birthday.

“To plan it, is to dream it… to schedule it, is to make it REAL. Attach a written timeline!”TIME-BOUND goals give you a frame of reference and keep you motivated.

Karl Bryan, CEO, Author, International Speaker

Just like any task without a deadline is easy to push off your desk or down your to-do list, a goal without a timeframe will never be achieved. Goals that are not attached to a timeframe are merely dreams or lose intentions.

You need to make sure that the timeframe you set for your goal is realistic and achievable – not too short or too long – and reflects any elements or factors beyond your control that may influence the timing of the outcome. This will keep you motivated and focused, and allow you to check in on and track your progress.

Loose

Time Bound

I will join a gym and start an exercise program. I will join a gym by the end of this month and start a regular weekly exercise program.
I will start a new marketing program. I will invest £750 on an online product by the end of this month, and start selling it online by my birthday this year.

Once you’ve come up with some goals for your personal and professional life, work through our test to see if they are SMART goals.The SMART Goal Test

When you’re creating your goal statements, put them through the following test:

Specific

How detailed is this goal?
Can it be more detailed?
Can I be more specific with what I wish to accomplish?

Measurable

Can I measure my results over time, distance, money or quantity?
How will I measure the results?
How often will I measure the results?

Achievable

Is it possible for me to reach this outcome?
Do I have what I need to reach this outcome?
Will I be able to achieve this goal in the short-term or long-term?

Relevant

Is this goal consistent with my values and overall vision for my life?
Is this goal a priority for me to focus on right now?
Is this a primary or secondary goal?

Time Bound

Have I set a time frame for this goal?
Is it a reasonable time frame?
Is it a manageable time frame?

Here are some examples of SMART goals compared to other goals.

Other Goal

SMART Goal

I want to write a book.

I will write a book on internet marketing that is at least 150 pages long, and have the first draft completed by January 23rd. I’ll commit to writing at least three pages each day (I understand that wealth creation is created before 9am and after 5pm – during the day I earn a living) until I finish.

I want to be really wealthy.

I will double my income to £200,000 within 18 months by starting an internet marketing business.

I want to become a millionaire in four months.

I will become a millionaire within three years by starting my own small business marketing company and positioning myself as an expert public speaker with engagements worldwide. I will supplement that income by creating a source of passive income.

I am going to do my taxes.

I am going to finish my taxes by Friday, and I’ll achieve this by spending two hours on them each night until then

Goals, like everything in business, have the potential to grow, change and evolve based on circumstances beyond our control. Depending on the length of the goal – daily, weekly, monthly or yearly – you’ll want to set up a schedule for reviewing and potentially revising your goals.You need to review and revise your goals on a regular basis so they have room to grown and change with you.

Build this review period into your goal setting process – schedule times to review your goals and take stock of your progress. Here’s a guideline:

Goal Timeframe

Frequency of Review

One Week

Daily

Two Weeks

Weekly

One Month

Weekly

Three Months

Monthly

Six Months

Monthly

One Year

Quarterly

Five Years

Yearly

10 Years

Yearly

Now it’s time to working through the goal setting process and create a few SMART goals of your own.

(Note: If you prefer, I can let you have a series of pre-set spreadsheets to help you with this. Use the form at the end of this post to claim your own personalised spreadsheets).

Have a go at working through the following steps to creating 18 SMART personal and business goals.

TIP: This is a great exercise to have your employees and management work through.

1. Establish Your Personal Values
Since you’ve already worked through a business visioning process, use the same process to work through a personal visioning process. When you’ve completed this, combine your business and personal visions and set your goals in one place.

2. Take a Personal Inventory
Using the information you discovered in the previous Personal Values exercise, carry out a Personal Inventory to think big about your future and your success. What are you dreams for yourself and for your business?

3. Set SMART Goals
Using the SMART principle described in this blog, plus the personal and business visions that you have just created, write down three personal and three business goals for each of the following time frames: 6 months, 12 months, 5 years. Remember that these goals should support your personal or your business vision.

4. Create an Action Plan for Each Goal
Now, for each of the 18 goals, create an action plan. This will include steps to take, potential obstacles to overcome, milestones to note, and other information that will help you as you work to achieve the goal.

5. Display Your Goals
Put your goals in a visible place where you can see and be reminded of them on a regular basis. You may wish to place business goals in your place of work, and personal goals on your desk or at your computer.

You’ve now completed the only envisioning and goal-setting process you will ever need to be successful. Congratulations!

I hope you’re getting really excited about the future potential of your business, and the power you have in you to achieve the vision and goals you have set while you’ve been taking part in the Business Growth Masterclass.

The next couple of installments will lay down further groundwork for your success, and then we will dive into the marketing strategies that are really going to transform your vision into reality.

For more information on the goal setting process described above, or to discuss any other aspect of your business growth strategy, use the following form to get in touch: